Forum Moderators: martinibuster
For example, let's say that Overture finally gets its act together and releases an identical product to Adsense. You put in a block of code on your page, it matches ads and you get a split of revenue.
Unless I'm wrong, almost every publisher in Adsense is going to sign up for it. Then we're all going to run tests. Some pages with Adsense and then others with OvertureSense. Whichever system gives the overall higher CPM gets to stay, the other gets the boot.
So, it's in the ad network's best interest to give publishers as high a commission as possible - in other words, they're going to have to keep decreasing their cut to make sure that the CPMs being paid out to publishers is higher than the competition; or else they'll lose all their ad inventory and can't make as much money from advertisers.
On the other hand, the advertisers are going to be looking better prices as well. Eventually, I think both Overture and Adsense will have enough ad inventory to satisfy the hungriest advertiser. Think about it, if both Adsense and Overture can offer an advertiser an unlimited number of impressions, it's going to come down to price. Who can offer click-throughs at a cheaper price? Whoever can provide the lower price will get the business.
Once again, it's the ad network who'll have to lower margins to bet the competitors' prices. This is going to be good for advertisers.
I think this is one of the main reasons why Google hasn't announced their commission percentages. They need to keep the whole process fluid so they can continually provide a higher CPM to publishers while remaining competitive to advertisers.
I'm interested to see how this all plays out once the competitors get organized. I'm sure we'll see all the pay/click search engines and large affiliate programs eventually offering some kind of content-matching service like Adsense. And we publishers are going to finally get some rewards from all this competition.
Don't bet on anything. If there are just two big players in the market that's not "perfect" from an economics point of view. So don't count on the competition being the same as if there were 100 major players all competing for the same thing.
First, with the EPC issue. That figure is just about the same as handing their AdSense business model to the competition. That figure is probably the most valuable one to Google, and while people may speculate on what it is, publishers just aren't certain what it is.
Speaking purely hypothetical - if Google AdSense had an EPC for publishers of 50% the CPC, this would give Overture, or any other competitor, a bargaining point. They could then use that figure against AdSense by trying to woo away AdSense publishers with "Google only pays 50%, we'll pay you 60% to display our ads."
Then that puts Google into the defence. It would only take a matter of hours before Google started receiving "XyzSense will pay me 60% - if you match it I'll stay with AdSense." Then would Google have to match it for all publishers? What if XyzSense then upped it to 65%? It could quickly turn into a competitive one-up-manship.
As for them slowly dropping the EPC, it is bound to happen. But I don't believe we'll notice anything change until after the competitors launch and after Google is known as the leader for contextual-based advertising. At this stage of the game, I think Google would be willing to take less of their own $ share in order to secure the dominance we are currently seeing. And that dominance in this market is good for the IPO, whenever it may happen.
And Google has the advantage of being first. There are probably many people with AdSense who will just be too lazy to switch the code on all those pages - particularly those hobby sites that don't use SSI or templates. And people know Google pays, and they have a huge brand backing. It is pretty much guaranteed that all of those hobby site owners have heard of Google. But would they have heard of Overture? Unless they are advertising with PPC themselves, likely not.
The same goes with stats. If it wasn't for that confidentiality term about the stats, this forum could easily become a free for all with people stating their specific stats so everyone else can compare. And when competitors are launched, it would become a field day for "My stats with AdSense are ____ and my stats with XyzSense are _____" People could very quickly compare and see what would be most beneficial. But with the confidentiality term, you are not permitted to.
All in all, for contextual advertising, Google is tops. Unless reports start filtering through about significant earnings increases for publishers or they offer something fairly significant that Google cannot, I just can't see a mass exodus from Google to any competitor. Time will also tell - we have been hearing plenty about "up and coming" competitors, but Google now has a four month head start and the competitors are no where to be seen.
That figure is probably the most valuable one to Google
Unlikely. It can be calculated to a fair degree of accuracy with a focused site using Adsense on only one page, especially if it's a page that is designed to attract a certain ad the Adwords' cost of which is known.
True, it will give you the share/split for that particular ad on a particular day for a particular sharing formula Google happens to be using at that time. So ... it's not a fixed figure that they are trying to protect. It's a fluid thing and "percentages" could change all the time based on a million different factors. The explanation would probably be too complex for most webmasters so Google's main reason behind not disclosing maybe that they can't be bothered explaining it. It may be so they don't get a constant bombardment of emails from webmasters each time a penny goes astray, and they don't have to provide those webmasters with detailed calculations each time one gets paranoid.
Even if Google did make a very clear X percent promise other factors will prevent the direct comparison and the type of bargaining you suggest. The volume of advertisers behind Adsense/Adsonar, the size of their wallets, the campaigns they may or may not be running, quality of ad matching (broad matching/narrow matching/completely unrelated matching) and a lot of other factors will affect the payouts. It cannot be summarised as a simple percentage. Would you prefer Google's 60% promise for a keyword that they don't have any advertisers for... or 10% of a competitor's price for the same keyword that they have a lot of advertisers for? And how will you know the number of advertisers, the words they are spending on and the extent of that ad spend behind each of the players?
As for them slowly dropping the EPC, it is bound to happen. But I don't believe we'll notice anything change until after the competitors launch and after Google is known as the leader for contextual-based advertising
We've already noticed the change: [webmasterworld.com...]
And it's downwards.
There are probably many people with AdSense who will just be too lazy to switch the code on all those pages - particularly those hobby sites that don't use SSI or templates
