Forum Moderators: martinibuster
As a real time example, Monday is often the best day of the week for my sites but February 28 was the worst Monday income and EPC day in ages. But our traffic was near record levels. Similar situation last Sat too with dismal EPC and revenue.
I have also noticed an all time high record number of PSA's. But had 'good' targeted ads on many sites for a long time but recently the same sites have far more PSA'S than normal.
After a noticable decline from Jan 28 thru about mid-Feb there was a fairly nice improvement for a while (about mid-month) but lately its back off the cliff again!
Anyone else notice this dubious long term (since 2003) and also short term trend (starting about Jan 28 2005), especially past several days? Any ideas why this happens? Has G possibly reduced its payout percentage? Does G perhaps have less advertisors which may be why there are so many PSA ads?
Could this be related to allowing 3 ad units on each page (and more and more of us doing that) vs the past where there was a limit of 1? Has that caused a double whammy of a reduced ad inventory and also caused lower bid prices, resulting in a significant increase in PSA's?
Of course, as a long time (well satisfied and very happy with G) publisher we are extremely worried about this trend. Nothing we do as far as making our websites better, good products/services, content targeting, getting improved traffic and good ad layouts/colors, seems to stop the ongoing decline. Any feedback would be appreciated.
As a publisher, my ONLY obligation is to PUBLISH and display the ads. What people do after they click over to the site is not in any way reflective of my content and I should not be rewarded nor punished financially beyond the terms of the agreement (the cost of the click).
This goes back to an ages old newspaper argument (I used to run a chain of newespapers). There are a number of scenarios, and all of these are in the parlance of nespaper display ads:
1. The advertiser gets a poor return on his ad spend. This can be caused by a variety of factors, including poor ad copy, design, poor placement, an unappealing offer ($1 off a $100 item).
2. The advertiser gets people in his store but the either don't buy or use a coupon once or just buy the discounted advertised special and never return.
3. The advertiser is overwhemled with responses but is still unhappy. This actually happened to me once when a club ran a coupon for free admission. It was so popular that the club lost money at the door - almost everyone showed up with a coupon. Obviously, the ad worked, but the advertiser didn't have a clue about advertising, because he never advertised again. Can you say "DUH!"
The point of this is that the publisher has no control over the actions of consumers. Our job is to get people to places - in this instance, other web sites. If the sites are poorly maintained or their shopping cart is broken or the ad was misleading (Does google check the veracity of their advertisers' offers? I doubt it), that should not affect our revenue.
And that example they used, Site review of camera GOOD; site about cameras BAD - shows just how totally clueless they are about this. When somebody with advertising savvy shows up in this marketplace, they are going to take a major hit to their bottom line. I suggest taking a long term short position on Google stock to make up for the revenue loss caused by "smart pricing." It's going to kill the bottom line for publishers and Google as well.
advertisers don't seem to realize is that they are only paying for TARGETED TRAFFIC... at most... COLD leads not HOT or QUALIFIED leads. Adsense is merely a way to filter out internet traffic to those that are relevant to what you are advertising. It is up to the advertisers landing page to convert the traffic.
AS a publisher, my job is to get people to click the ads using relevant content. Once the guy clicks the ad, my job is done. My job is not to help convert the traffic. IF my job were to convert the traffic, why would I be willing to accept only pennies as commission? Affiliate programs pay much more than pennies for leads and sales.
AS a publisher, my job is to get people to click the ads using relevant content. Once the guy clicks the ad, my job is done. My job is not to help convert the traffic. IF my job were to convert the traffic, why would I be willing to accept only pennies as commission? Affiliate programs pay much more than pennies for leads and sales.
As a very active advertiser, I agree with you.
Adsense is merely a way to filter out internet traffic to those that are relevant to what you are advertising.
IMHO, this is why a content site click ought to be more valuable to the advertisers than one from the SERPs. That is, if we lived in a perfect world with no scammers, shady sites, etc. *Sigh*
As a very active advertiser, I agree with you.
@icedowel, yes in a perfect world... content sites should be more valuable to advertisers. But, in the REAL world.. many advertisers don't even have content sites option turned on. They see the SERPS as more valuable.. is this totally the fault of scraper sites? Or do (SOME) advertisers need to be educated?
Wonder if someone is listening here?
many advertisers don't even have content sites option turned on. They see the SERPS as more valuable.. is this totally the fault of scraper sites? Or do (SOME) advertisers need to be educated?
It's some of both, but the educating is a lot tougher now that many ads are as likely to turn up on scraper sites as on targeted enthusiast, b2b, or other special-interest sites.
Obviously these "scraper sites" are very profitable for Google. Google has shareholders to appease by earning higher and higher profits so they allow the poor quality sites to stay in the program. In an effort to at least appear to be doing something for the advertisers they hatched up the "smart pricing" scheme.
Short-term the shareholders will love it. Long-term they'll pay a price.
Perhaps yahoo and/or msn will force their hand.
The only reason that makes sense why Google hasn't implemented this is because more advertiser control would ultimately eliminate many of the very sites that receive "low-quality" complaints on this forum.
Not necessarily. Google could continue to offer a "run-of-network" base product that would include everything from content sites to scraper sites to gmail and DomainPark, with advertisers having no control over where their ads appeared. Advertisers who have decent ROI with scraper sites (and who aren't picky about the company their brands keep) could go on taking potluck.
Advertisers who required greater control could pay a little more for a slice-and-dice product (the equivalent of customized mailing lists) or for what some forum members have called an "AdSense Gold" tier of editorially approved sites. If Google didn't want to administer such variants itself, it could outsource the task to third-party brokers and agencies via the AdWords/AdSense API.
Some of you have discussed that G should in fact give control of the ads. As I stated in an earlier post I am a bit reluctant to reveal my information right now in much detail but I will give you a big clue, here it is: G has already given many publishers who control zillions of impressions fabulous control over their ads.
I do not believe that is at all related to what europeforvistors and a few others are referring to as far as so called adsense gold is concerned, whatever that may be. What I refer to is the fact that many publishers have amazing control over the keywords and ad targeting. It appears to be a limited number select group based on both known and an unknown criteria, appearing to consist of a combination of both high and lower traffic publishers.
This is so amazing you would fall over in shock (unless already sitting down) if you knew about it in detail. In fact, the control a number of publishers have is so powerful that I am actually quite surprised the supply/demand issue for good keyword ads and good EPC is not much worse than it is.
One reason this is not publicized is that it's quite possible G has asked the publishers who enjoy the great control to not talk about it (though I am not certain that is the case, it's just an educated guess based on so much of adsense being seemingly cloaked in secrecy and mystery).
Google, like all successful businesses, needs to prop up the value of its bread-and-butter product: high paying adwords. In this context, the largest risk to Google is a collapse in the value of these adwords. In order to prop up the price of these adwords it is necessary to maintain an artificial scarcity, by preventing a glut of AdSense publishers from flooding the market with inventory.
Google can never allow (unless forced to by competition) advertisers to directly bid on specific sites in the content network, because this would create a free market where publishers could expand inventory and drive down the price of the higher paying adwords. Such a price collapse would spill over into Google's other markets, for example driving down the adwords bidding on search pages.
SmartPricing, therefore, is a mechanism to control this limiting of inventory, and prevent a free market from taking hold, by establishing multi-tiered pricing, and in effect using an algorithm to determine which publishers to allow into the full-pricing tier.
Google must decide very carefully which publishers to allow into this full-price tier, because in effect, these publishers are competing for adwords dollars against Google's own sponsored links on search pages. Google must therefore ensure that the content network doesn't provide a significantly better value for advertisers than sponsored links on search pages. If it did, it would be disobeying the cardinal rule of new product introductions by large corporations: Never introduce a new product which cannibalizes an existing product line.
Perhaps all of this secrecy, lack of transparency, etc. on Google's part regarding payout percentages and how SmartPricing and conversion metrics affect EPC is part of a concerted effort to inhibit the free flow of information in the adwords/adsense market. This, in turn, makes the market more inefficient, and inefficient markets are much more lucrative for market-makers than efficient ones.
I will wager that Adsense's days in its current form are numbered. Why? Because it's an inefficient market. Markets are efficient to the extent that they are able to provide full disclosure of all relevant information to both buyer and seller, and facilitate the transaction with minimal transaction costs. Google's role as a broker is tainted by the fact that it has a major interest in propping up the value of its keywords, and is therefore threatened by a marketplace in which keyword values would freely float.
I imagine ad brokering systems of the future being more ebay-like, offering full transparency in:
(1) publisher reputation
(2) advertiser reputation
(3) bidding history for each site
(4) site keywords claimed by publisher
(5) ads only run by mutual agreement between advertiser and publisher
(6) offering a full API so that 1, 2, 3, and 4 can be searched by your own custom software, and 5 can be agreed to either manually, or using automated tools.
This is a threat to Google on two major fronts:
(1) As markets become more transparent, they become more efficient. As markets become more efficient, the value-add by brokers decreases, and the role of market-maker becomes increasingly commodified.
(2) Google wants to be able to leverage its massive collection of data centers and advanced software development tools such as the MapReduce framework to allow it to "out-algorithm" the competition. If publishers and advertisers are finding each other directly, rather than being matched by a relevancy algorithm, the computational needs of the ad brokerage process scales down from Google-grade to Ebay or Amazon-grade, lowering the barrier-of-entry for other ad brokerage competitors. It also chips away at Google's central premise that algorithms are more efficient than human beings in evaluating relevancy.
I think the bigger picture here is that Google and the other major web players do not want to see a collapse of the web advertising market as occurred at the end of the last dot com boom. To these ends, expect a concerted effort to prop up advertising rates by restricting supply and artificially controlling prices.
- Publishers need a middleman to aggregate their AdSense impressions with those of other publishers for all of their different subtopics.
- Advertisers need a middleman to find and deliver impressions and clicks from targeted pages on many different sites.
In a targeted ad network like AdSense, the middleman isn't just a broker; the middleman is creating new revenue opportunities for advertisers and publishers by matching ads from many advertisers to pages on many Web sites.
Google has $$$Billions riding on adsense and adwords, and I really can't say I blame them for secrecy, etc., because they have a money-maker and want to keep it that way. I imagine that if and when Yahoo comes along (and there's been news leaking out that MSN is running pilot programs in Europe on a similar plan), things will have to change for Google, and probably for the worse.
On the other hand, I distincly remember when Yahoo had a daily average of 2 - 2.5 million auctions running, while eBay had about 4.5 to 6 at the same time. I believe it was 2000? I used to publish what I called "The Wednesday Report" which tracked auction sites.
It was interesting. It was a horse race back then. Yahoo auctions were free, and lower quality, but a lot of people were rooting for them. What happened?
Yahoo didn't listen to their customers, who knew they had to begin charging, and decidedly wanted just Final Value Fees (after the sale). Yahoo went and instituted insertion AND FVFs.
Result: Auction volume declined by 90% in one month and over time they just about gave up on it. The rumor is that they don't even have a product manager on it any more.
That's the US. They still do well in select asian markets where they were the first mover.
Why do I digress? Because Yahoo may not, in fact, enter this market at all. Getting into a war with G over publishers and advertisers may not be considered wise to some of their top execs. Yahoo is a more of content site, after all, as they gave up the lead in the search business to G a few years ago. These guys are careful, but G has a lock right now, not unlike what ebay had back in the day.
So, we may be "stuck" with Adsense as an only option for quite some time, IMHO. Best to make the best of it, I suppose.
I attempted to look at my own ups and downs over 18 month period , amongst other things I looked in detail at Channel data and attempted to decide if one channel with poor targetting could affect all channels ( My channels are 1 channel per site )
I had a site ( channel )with very very poor targetting with bad ctr and poor CPM , during the whole time that site had adsense on my overall targetting on all sites appeared slightly downgraded and ctr / CPM was low.
4 weeks ago I stopped all adsense on that site and since my targetting / CTR / CPM has improved 100%
I suppose what I should do is put adsense back on the offending site to prove the cause / effect but as its working well currently unwilling to test
I also think that multiple add blocks could cause a similar effect
site in question was mid size traffic 12,000 adsense impressions per day
just some of my own observations and no proof just gut feel
steve
I experienced a similar result when I removed the second ad block from a site 3 weeks ago.
I removed it because the ecpm of the second ad block was insulting low - given that my direct advertisers happily pay 3-4 times the money.
Surprise! the numbers of the remaining adblock improved across the board and even overal (adsense) revenue improved.
Less is more?
- Publishers need a middleman to aggregate their AdSense impressions with those of other publishers for all of their different subtopics.- Advertisers need a middleman to find and deliver impressions and clicks from targeted pages on many different sites.
A middleman is certainly necessary, however the problem as I see it is that Google is taking advantage of its status as first mover and principal middleman in this business by purposefully creating an inefficient adwords/adsense marketplace in order to maximize transaction costs and prop up keyword price levels for its search business.
To help define the meaning of efficient marketplace, consider the paragon of market efficiency: the stock market.
In the stock market,
* The transaction cost, i.e. the bid/ask spread is typically far less than 1%.
* The transaction only occurs at the intersection of the buyer and seller's price ranges.
* The realtime bid/ask, the transaction cost, and all historical price information is publically available.
* The marketplace is governed by a neutral party, i.e. a stock exchange, which in turn allows participation by competing brokers.
* All information is equally available to both buyers and sellers. In fact, it is a felony to trade based on information which is not publically available.
* Freedom of speech is permitted, i.e. one can publicly criticise any aspect of market operation, and can seek redress against wrongdoing through either the courts or the appropriate regulatory agencies.
In the adwords/adsense market,
* The transaction cost, i.e. the markup between what a publisher receives and what an advertiser pays is estimated to be 40% to 60% in the best case. No one even knows the worst-case markup, such as a content page which is penalized by the undisclosed smart pricing algorithm.
* Publishers have no way of setting a minimum asking price on their ad inventory. Since Google's proprietary algorithms determine (a) the asking price on the ad inventory, and (b) the smart-pricing discount, Google is essentially replacing a free market, where the transaction represents the convergence of the seller's asking price and the buyer's bid, with an artificial, price-controlled market where Google's algorithms determine the transaction price.
* The realtime bid/ask, the transaction cost, and historical price information is Google proprietary.
* The marketplace itself is proprietary, and the market-maker itself is not a neutral party to the transaction.
* Freedom of speech is allowed only to the extent that it complies with Google's TOS.
Now of course Google is a private company, and has every right to create a marketplace which maximizes the benefits to its own shareholders.
My hope is that longer term, the web advertising market will begin to look more like the stock market, as publishers and advertisers realize their mutual interest in pushing for both transparency and neutrality by market makers.
One way this can start is by creating neutral ad exchanges which then accept publishers, advertisers, and middlemen as members, similar to the differentiation between stock exchanges and brokers.
The ad exchange would be a real-time bid/ask marketplace where ad space on specific URLs would be offered up for bidding. The ad exchange would be operated by a neutral party, funded by member fees, and would play a role in dispute resolution and buyer/seller/aggregator reputation tracking.
While the exchange would allow an advertiser to directly bid for an ad rectangle on a URL, most advertisers would work instead with aggregators who would compete against each other to compile the best collection of URLs to deliver targeted leads for various market segments and keywords. Those aggregators could then offer their programs in the same bid/ask auction-style marketplace. So for example, an aggregator could do their own market research to determine the best URLs to deliver targeted leads for widgets. They could then offer their aggregation package in the ad exchange, indexed by relevant keywords. Their aggregation package would then build up its own official reputation, similar to the track record of a mutual fund. So an advertiser who sells widgets could choose aggregators based on their track record, and could do a side-by-side performance comparison of aggregators who use human research vs. automated relevancy algorithms.
The strength of this system is that it is free-market driven and extremely resistant to price fixing and anti-competitive behavior by any party. Such an exchange would open up the marketplace to competition among aggregators, where players such as Google would have to compete against human aggregators for maximum honing of page relevancy and ad targeting. For example, if one broker uses an automated relevancy engine to provide aggregation intelligence, but the system falls flat on its face with poor targeting, it will lose out to the human aggregators who use more efficient methods, since each will be bidding on the same inventory. Publishers win because they get full-value for their content. Advertisers win because they have full control: they can either bid directly on a URL, or they can go through an aggregator, and they can choose from any number of aggregators in a competitive marketplace.
