AdSense -- Can you bank on it?

[peterinwa]

I started my site as a hobby about four years ago and it did well. Comes up #1 at Google searching for a popular keyword so I get a lot of traffic (for a hobby).

Then late April I tried AdSense and I'm making really good money. Can't believe it. More than I ever made at a job.

I'm curious if anyone has any thoughts about the future of AdSense. Of course if it went away and my site was still popular I could try something else. But right now AdSense is all I know.

Remember video cassettes... before DVDs? Who knows what the future holds for AdSense, much less the Internet.

Thanks for any thoughts,

Peter

[figment88]

While I think you'll always be able to make wsomething form it, I believe that relying on Adsense is a difficult proposition:

1) There is no real competition. Google can do whatever they want and the majority of publishers will grin and take it. After Google IPO'as they will have continual pressure to make quarterly numbers, Adsense publishers will appear as an easy way to make-up shortfalls.

2) Adsense revenues are largely based on ignorance. While I am sure there are some highly competive industries where everyone has their bids will pegged to ROI, for the most part I find advertisers to do really stupid things. I see bids that must produce negative ROI, ad copy that misleads, etc. etc. I can only think that overtime bids for content will decrease.

edit forgot 3
3) inventory seems to be expanding much quicker than demand.

[edited by: figment88 at 12:24 am (utc) on Aug. 11, 2004]

[Rodney]

This thread here should give you a good read. It discusses the same thing:

[webmasterworld.com...]

[alika]

No business model can provide the assurance that it will be positively sustaining year in and year out. There are just too many factors beyond anyone's control. Google may change the mechanics of Adsense; better competitors may arrive on the scene; etc.

Particularly when you are talking about an advertising revenue model such as Adsense. Advertising -- in any form -- is extremely susceptible to the ups and downs of the economy. Advertising budgets are commonly the first items cut during recessions. Heaven forbid if there's another 9/11 -- the last time it happened, money dried up for a few months on the Internet.

Then of course there's the text ad saturation, should it ever happen. Banner advertising should be a cautionary tale for all of us -- in the late 90s, people were getting paid $100+/CPM for banner ads only to drop to $1/CPM or even less a few years later.

The key is to control the factors within your reach: diversify your revenue source making sure that you have a viable alternative to Adsense. At this point, simpy maximize your revenue potential from Adsense - and always have a backup plan.

[chrisnrae]

If it were me, I would use the revenue to diversify as suggested above and to build a solid nest egg. Nothing on the Internet is "secure" - it is still in it's early years. Spread your wings wide and you'll always be able to fly high.

[europeforvisitors]

inventory seems to be expanding much quicker than demand.

Like most generalities, that statement may or may not be true in specific cases. The inventory of available pages for some topics may be growing, but it may be static or even decreasing for others.

What's more, inventory may vary on any given day. For example, the supply of pages that will display ads for "Vistula River cruises" is likely to be limited most of the time, but if the WASHINGTON POST Travel Section features Vistula River cruises next Sunday, the number of impressions will jump dramatically for a short time. Vinnies-vistula-river-cruises-reviews.com may notice a drop in revenues that day when the WASHINGTON POST's Web site exhausts the budgets for Vistula River cruise advertisers by half past noon.

Long-term, it's hard to make accurate predictions of AdSense bidding trends, because supply and demand will be affected by things such as:

1) Whether Google makes the accommodations necessary to reach mainstream advertisers and advertising agencies, who spend many billions of dollars a year. (Google has already taken a baby step with "image ads"; higher quality standards and more advertiser controls will also be needed to reach the larger advertising market.)

2) Whether Google is willing and/or able to enforce its policies against "made for AdSense" sites.

3) Whether Google is able to keep "AdSense spam" from dominating its SERPs as heavily SEO'd affiliate and e-commerce sites have done.

Finally, bids may not be the only factor in determining what a publisher earns. We have no way of knowing what Google's AdSense payout formula is or what it will be in the future. It's unlikely to be as simple as a straight percentage split. Conversion rate, monthly revenues, and/or the inventory supply-to-demand ratio in the publisher's category might come into play.

[zulufox]

You cannot count on it at all, simply because it is NEVER advisable to put your egg in one basket.

If I were you:

Invest the money back into the site and diversify your income, then whatever happens to your site's adsense, you will have a AWESOME SITE (or even better. sites) and will be able to earn a decent amount from it, adsense or no adsense.

[blue_eagle]

Thats what I am doing actually, spending some adsense money on my other services to improve. Just in case adsense dream ends.

[tebrino]

I was very pleased with Google Adsense. Good ads, targeting, payment (much more than my day job), until they disabled my account without any warning or real reason. Fortunately, Google was not my only income.
My advice is to have several sources of income, since Google could disable your account for any reason (or no reason at all) and keep your money. You can write them hundreds of mails and get no reponse at all.

[ari11210]

What other sources of revenue would you recommend? What has worked for you?

Thanks

[trillianjedi]

Check out what's available on CJ by way of affilliate marketing.

And start diversifying as soon as you can.

TJ

[Freedom]

While it's always good to diversify, I remember a recent topic in the search engine news sources was the shortage of search engine advertising space. Even with competition, I think there is room for growth here.

Your biggest fear with adsense should be getting kicked out of the program through no fault of your own. There have been too many threads here about people that kicked out for invalid clicks (claiming they knew nothing) for much of it not to be true.

I have gone so far to protect myself in this regard that I don't tell any of my friends or family my websites using Google AdSense. Knowing them, they'd start clicking on ads thinking they were helping me out when in fact they would be cutting my throat.

[loanuniverse]

Peter:

I say enjoy it while it lasts. It could be 6 months or it could be 10 years.

[wonderboy]

Nope!

[bhartzer]

If you're going to continue to make any money as an affiliate you must "Diversify Diversify Diversify". Don't put all your eggs in one basket. Have a lot of sites.

Control a lot of traffic and you'll be able to funnel that traffic to whatever affiliate program that is the latest craze.

Right now the latest craze appears to be Adsense. Someone always comes up with something better, they always do--and if you control a lot of traffic you'll be able to deal with the next big thing.