Forum Moderators: martinibuster
the notes also pointed out that strong competition was squeezing margins for its AdSense syndication network.In a statement filed Tuesday afternoon with the Securities and Exchange Commission, Google said the notes "were not created for financial planning purposes, and should not be regarded as financial guidance."
[edited by: martinibuster at 5:41 am (utc) on Mar. 8, 2006]
bad things usually run downhill
While this would be good for businesses that advertise online, publishers could see their earnings fall.
Revenues are how much they sell the ads for. A major component of the cost is what they pay the publishers.
If revenues are holding (or increasing) and other expenses are holding, then the only way margins would thin is if Google is paying publishers more.
Big if, there are other expenses other than paying the publishers, it is always possible that these costs are going up and eating into the margins.
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I kind of doubt that AdSense margins have actually gotten smaller, although it's possible they are facing tougher negotiations when dealing with premium publishers.
With the new competition, don't you think that Google would try and keep its existing ad base with higher earnings? Simply put, its the only way Google will keep people like us from running to the competition.
It isn't that simple, due to different bids on different keywords on different networks, geotargeting, where publishers are located, etc. One publisher might make more from AdSense while another might make more from YPN or MSN with the same traffic.
It's good for publishers... If the competitors can't thier ads on the producing websites they won't have anything to sell to thier advertisers.
It's not the same thing. We're the TV networks, and Google represents the advertisers.Umm, no.
We're the producers, Google is the TV network (paying us for showing commercials), and the advertisers are the sponsors.
And the question remains. When the middleman feels the heat, which of the outermen benefit? Both of them?
Transient price waves may come and go quickly but the overall tide is rising for the forseeable future.
Rejoice publishers! :)
I agree, this "should" be good for publishers.
Of course you can squeeze the "middleman" too much and he will die. But, I don't think G is even close to that today.....so squeeze away ;)
The statement further included that... the company would execute well on its core ads projects to exceed the $9.5 billion target (and backfill any AdSense partner loss) and drive advertiser satisfaction....These statements were termed as speaker notes prepared early in the fourth quarter of 2005 for an internal product strategy presentation... In addition, the statement with respect to AdSense margins did not reflect Google's current expectations, the company stated.
AND if my websites are good for google they will be good for the competitors.
Again, it isn't that simple. Where is your audience located? Where are your advertisers located? Does the competitor have enough advertisers for the keywords that an adbot detects on your pages?
Consider YPN:
Some AdSense publishers have reported great results; others have expressed disappointment. And others haven't been able to enroll in YPN because they're in countries that YPN doesn't yet serve.
In a mistaken disclosure to investors, Google accidentally advised that it's profit margins from it's AdSense program were getting squeezed.
What does that mean? Don't you see it guys? Google is going to squeze more money OUT of Adsense publishers, meaning: you were paid $.70 or every $1 advertisers spent on Adwords; now, you will be paid $.30 for every $1 advertiser spends on Adwords.
It's the only way for Google to keep it's stock high!
>It's the only way for Google to keep it's stock high!
No! If they reduce the payout % I will know. My conversion rate is 100% consistent, I can see their pay rate by using their own tools, so if my payments drop it has to mean that they have cut my %.
If they do that I will ditch them! And will never return because they acted dishonestly, even if they try to correct it later.
Google isn't the best converter today, but it is a good "filler". If it wants to screw with the % payout it will lose my business forever! I would rather help smaller enterprises that appreciate the possible growth!
Even if it means a lower initial income for me.
"Squeezed" means Google's profit margin will get smaller.
I agree. I see this as Google standing by their publishers to keep them from bolting to the competition, even if they have to squeeze their margins.
If that's true, it's good to be valued. :)
To reiterate. G can't raise ad rates either, because that will drive advertisers to places like Y!. This is how G gets squeezed. Like I said it will still be highly profitable, but they are the broker that will be squeezed between buyers and sellers with multiple choices for someone to buy and sell ads and adspace.
At the end of the day they are an adbroker with some fancy technology to take costly human labor out of the equation. So they are generally more efficient than their competitors... for the time being. All they do is connect buyers (advertisers) with sellers (publishers).
Pretty straight forward really.
negotiations when dealing with premium publishers.
Most premium publishers which I know have web sites not optimal for AdSense.
For example sites from big paper newspapers. There is a news about something and AdSense tries to bring ads matching the news.
All this newspapers which are premium publishers, easy to see by different ad sizes have in common:
Ads not optimal placed
No filter applied, Ebay tries to sell everything including the Vatican.
No AdLinks
So I think this premium publishers have a terrible eCPM. But usual when I look on the advertising price lists, this sort of site are by my oppinion complete over paid for showing banners and pop ups.
So I can imagine, that there is a price competition on this market.
But I can not imagine a competition at specialised web sites with high eCPM.
Umm, no.
We're the producers, Google is the TV network (paying us for showing commercials), and the advertisers are the sponsors.
Google is only the mediator. You could as well decide not to use Google's services and instead negotiate directly with potential advertisers.
The next arguement would be the reach and effectiveness of the different ad networks would also need to be considered by publishers, and I would expect that the ad networks will also reveal more details about this as well, which will also benefit publishers.
Thanks,
SpaceTaxi
