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If you are blocking for competitors, or companies whose ethics you do not agree with, there is not a problem with using the filter - that is what it was intended for.
The problem with the filter is not only are you filtering a specific ad, but you are theoretically blocking hundreds of other ads associated with that advertiser's URL - ads that could be completely relevant and pay well. Advertisers aren't just running that single ad you just blocked on an Adwords account - most run hundreds or thousands of unique ads. So while you could believe that you are blocking a single irrelevant ad from appearing on your site, it actually goes well beyond that. You could also be blocking thousands of other ads that are not only completely targeted and relevant to your site, but that could also be the top paying ads for those keywords among the advertisers who have turned content targeting on in their Adwords account. In short, by blocking that single URL, you could have cost yourself a larger piece of the AdSense pie.
Here is a sample case study to explain what happens a little better:
Jane sees an ad for "green spotted widgets" on her site. She thinks, well, my site is on widgets, but green spotted widgets aren't really that profitable a keyword phrase, so I am going to block that one, in hopes of showing better targeted and higher paying ads. So Jane goes and enters the URL of the ad for "green spotted widgets". A few hours later, that pesky "green spotted widgets" ad disappears. Good? Not neccessarily.
Her CTR drops. Her EPC/CPM drops. Her earnings drop. She comes to the AdSense forum asking if people are noticing a drop in earnings lately. She is earning less and concludes that AdSense must be to blame. After all, it is AdSense who decides what ads to show.
If she is paying attention to the ads appearing on her site, she may notice that suddenly, ads for many of the top paying "widget" keyword phrases - "purple striped widgets"; "orange polkadot widgets" and "blue pinstripe widgets" - not to mention the highly coveted "widget" ads - have also vanished from her site. She writes it off as being fluctuations in ad inventory that is beyond her control. Or perhaps AdSense is mistargeting her ads and thinks her pages are actually about something else - when in actuality they are showing less relevant or themed ads because all the relevant ones are blocked.
But not once does she think about the impact of the URL filter. In actuality, the drop could be attributed to any of those URLs she recently added to her filter list to block those green striped widgets - because the advertiser is also advertising all the profitible and targeted widgets as well.
Unfortunately, she doesn't put two and two together, and will continue to suffer with a lower CTR/EPC and earnings.
A similar case study could be John who blocked an ad geo-targeted to his specific area. The advertiser could have set up individual ads to geotarget every specific area in the US, while still paying high bids for those ads. And they could also have other high paying non-geotargeted ads as well. But as we have seen, blocking one geo-targeted ad can have a much larger impact on reducing the availability of relevant and high paying ads for your account.
What can you do to see if your filter list is actually hurting your bottom line?
First, take your filter list and paste it into a text file and save it. Then go and delete the entire thing out of your filter URL list in your account. Yes, the entire thing. You can go add selected URLs back into it, but ONLY the ones you are using to block competitors or unethical companies.
After a few hours, you should begin to see some new ads show up on your site (you can use the AdSense ad viewing tool if you are outside of the geotargeted area the majority of your audience is in, since the tool also takes into account the filter list). Try and resist the knee jerk reaction to automatically go and put those "irrelevant" ad URLs back into the filter, because that one URL could also be responsible for higher paying ads that appear on your site.
Don't forget AdSense is in it to make money too - they are going to show the highest paying ads available for the keywords it has selected for each individual page. The more the advertiser pays, the more both you and AdSense earn. It doesn't benefit them to show the ads worth the least amount of money, so blocking ads because you think they pay too low is a mistake (especially since again, you could be blocking all their highly targeted and high paying ads from your site as well.)
Watch your stats over the next several days - preferably over weekdays and over a non-holiday week, since other factors (such as advertisers lowering bids for weekends and holidays, or pausing campaigns all together) can have an impact that is not related to your filter list at all.
Hopefully, you should see your earnings increase with the reduction of URLs on your filter list.
If you saw a dip that can't be attributed to anything else, start adding URLs back to your filter list, starting with the URLs you believe to be so unrelevant that there is no way that advertiser could be advertising anything that is targeted to your site. And keep watching your CTR, CPM and earnings to see if you hit a balance where you have filtered the ones that really do need to be filtered, while leaving the ones that could be showing those profitable ads.
Hopefully, some of you will be able to reduce the number of URLs on your filter list, while getting more profitable ads to appear and earning even more money :)
And yes, I do practice what I preach ;) I only have 9 sites on my filter list - 7 sites are either my own or direct competitors, 2 are advertisers who are showing relevant themed ads, but their target market is not the same as mine :)
I filled that puppy up so fast it wasn't even funny.
I also cut my income just as fast. Apparently my visitors didn't find those off target ads as far off target as I did.
Away went the filtered list.
Now I just have 1 url blocked. It's for hair restoration, on my classic car site :)
Although some ads are low paying, publishers must realize that it could also be because these ads regularly get high CTR and the advertiser has tweaked it to such a level where cost (CPC) is kept low. The budget for this advertiser however remains the same so the publisher has the potential to earn the same amount or more from this low CPC advertiser as compared to a high payer but with miserable CTR.
As harbs said, advertisers tweak their ads for better ROI and CTR - what works well for one ad targeting one keyword phrase may not work well on a similar keyword phrase advertising the same thing, another reason for unique ads.
But I'm going to have a go at removing all my filters and see what happens. Frankly I can't beleive my visitors want to see tacky ads about "13 things they really need to know about Widgets"
Reading between the lines Google needs "good" Publishers badly and they are seeing the good publishers use the filters a lot becuase those publishers want to maintain the standards on their sites.
I'll report back
[edited by: Roomy at 11:01 pm (utc) on Aug. 21, 2004]
# Did your CTR go up? - No, it went down.
# Did your CPM go up? - No, it went down.
# And most importantly, did your bottom line increase? No, just the opposite.
I removed all those added URLs. I keep a couple of direct competitors blocked, and also block one distributer who thinks that those webmasters who visit my site consider stay-awake drugs a legitimate resource.
My CTR, CPM and earnings went back up immediately to "normal" levels.
I occasionally block ads that I consider past the limit of good taste. I usually remove these URLs from the filter in a month or two, because they don't tend to reappear under the same URL. If you want to block a specific ad, use the full URL, rather than the entire domain name. Only list the whole domain if you find a repeat offender.
For example, I have a graphic design related page. I do -not- want web design or web hosting ads displayed, only graphic design/art related. It is a nightmare to have to go and filter out all these cheesy web hosting pitches and keep my page on topic. How much simpler it would be to simply forbid the word 'web design'.
This is just one example, and it's not to say i'm not happy with the Adsense targetting; it is a great thing. It just seems to be a bit silly to base this ad filtering function on URL's. Just like spam email, the domain and sender names will always change, it's the content which doesn't stray much and can be ID'ed and filtered.
I still kept some in thereone competes with something I'm selling directly. Several others are for borderline illegal (heckfull-on illegal as far as I am concerned) services that I specifically warn against on one of my sites. Yet another is an ad for a product that I most emphatically do not recommend. So those will always remain blocked. But I had a few others that don't have to be blocked. So I unblocked them.
Earnings are unusually high for today, so far. CTR and impressions are about as expected, but earnings are definitely up. Coincidence? I have no idea. I will wait and see and report back later.
I would have though that if this thread is representative of *normal* AdSense users, then it'll be high on their To-Do list now this IPO stuff is out of the way.
I've removed them yesterday as an experiment. So far I see a huge increase in ctr but not in earnings or effective CPM. They seem to be down rather than up. (The higher ctr may be due to other causes).