Forum Moderators: martinibuster
I track these AdSense ads through a separate channel. The channel has an excellent CTR of almost 20% on the average. I also found the average payout per click to be around $0.50. So the eCPM is almost $100. I suppose the visitors see the widgets on my site, and 20% of them who can't find what they are looking for, proceed to get them from the sites in the ads.
So, in effect, I now get back at least $2 for each $1 that I invest in this experiment (I say "at least", because today, for example, I have an amazing 400% ROI). This is in addition to the uncalculated benefit of some of those visitors surfing to others parts of my site or bookmarking it (in fact, from Google Analytics I see that these are some of the best visitors, viewing more pages than any other group and coming back most often).
I'm not sure how this all makes sense, but probably I'm "buying" a "bargain" targetted visitor from Google, that, 1/5th of the time I can "resell" to somebody else for 10 times the price, even after Google takes it's AdSense share.
I think that the AdWords --> AdSense connection is very much misunderstood right now and needs further investigation. All webmasters should try experimenting with AdWords and see if it makes a profit for them. I would imagine this technique could work even better if you use high-paying keywords (which I don't unfortunatelly).
What I found was that over time, my ROI was decreasing to the point where I wasn't making money doing it.
Whether it was a smart pricing type thing or not, I don't know, but I'm pretty sure the clicks I got from Adwords visitors started being discounted.
May not happen to you, but keep an eye on it.
I still found, however, that the payouts from Adsense were at least as much as the amount I was spending on Adwords so, in essence , it is free traffic.
I don't know how Google feels about "Adwords to Adsense" arbitrage , but it does work on more expensive terms.
I think the major issue is ROI - I've noticed as well that you'll get a brief surge for a period of time, but over the long run, it's not worth it - it declines.
It's not to be discounted, that's for sure, and if you run a site that gets seasonal surges (i.e. it's about widgets that many people use during the summer) then it's good to use AdWords to take advantage of that, but otherwise, your better off in investing Adwords money into good content (i.e. paying somebody for articles that will keep on paying for themselves into the future).
This time I'm running the ad in content as well as search. Mainly because the ad will probably work well in content, and partly to see if I get a discount from smart pricing. Oddly enough, content and search click prices are the same. So they ALL convert do they Google? Hmmmm.....
Oddly enough, content and search click prices are the same. So they ALL convert do they Google? Hmmmm.....
Could be, depending on where the ads are running. Some advertisers have reported better conversions with content than with search (presumably because the content-ad leads are prequalified when they reach the advertiser's site).
I've tried running search and content at different price bids in the past, and this time equal bids higher than the click cost just to see if there is a differential. None whatsoever.
This is my problem with smart pricing, why it is not an incentive to advertise in content, and ultimately the reason I don't like smart pricing. On all of my campaigns I see no smart pricing discount, yet smart pricing hits publishers very hard on a lot of occasions. Google get to keep the profit.
I have found that with *small* amounts of ad spend though a mixture of AW and other networks I at least get my money back.
I think this is because I improve the mix of visitors from the point of view of all of the ad networks.
Rgds
Damon
Aren't they the same exact visitors that clicked on both ads?
If you can convert better, how come I got my traffic through quality content, good links and natural serps and you bought yours?
If the visitors clicked your ad on my pages to find more info on widgets, then clicked on ads on your pages to still get to where they want, where does it end?
Are you in any way or form improving their surfing experience?
What if I or someone else in tern advertise on your site and still lead them to more ads, does that surfer come out with a good feeling of accomplishment and fulfillment, or a similar experience to pop up porn? Do you think that same visitor that you took from my site for pennies is going to come back to my site ever?
Personally I'd rather send my visitors to content or retailers or manufacturers that display no ads, this way they will bookmark my site and keep coming back, the moment Google allows an opt out for publishers from ads that lead to pages with AdSense I am in.
I built my site for a good user experience first then added AdSense for earnings, for me, not an agent of an agent of an agent of an advertiser for widgets!
Buying AW and making profid with clicks on AS should be inpossible in theory. But the visitors from AW are already filtered, even twice, first by searching for a topic, and a second time they filter themselfs by picking an ad. That's the reason why more of them click on your ads. Therefore it is important to make a good ad (and not a fake one).
It proves that it is important to have 'good' traffic. Better 10 interested visitors, rather than 1000 totaly 'non-related' visitors.
There is one big minus : I can't buy as much traffic as I want. If I want to buy more I have to increase my bid...
For some topics it can work, for other it's 'not worth' but give it a try.
I think AW can be useful for building up a lot of users early on in a website's life - i.e. your not trying to draw traffic in the hopes they'll click on your ads right then and there, but rather you are drawing traffic that will be repeat visitors (bookmarking), and that will perhaps link your site elsewhere or pass your site onto others they know might be interested - that's where AW truly begins to shine for many of us, but that's also the hardest part to measure, performance wise.
My point is that I've never seen a discount for content ads - only ever seen a cent or so difference either way. This time is yet another example of the non-appearance of the smart pricing discount.
Have you brought this up in the AdWords forum? Your experience certainly isn't universal.
BTW, Google's AdSense Blog discussion of smart pricing has links to other discussions of the topic that you may find useful.
[edited by: engine at 5:05 pm (utc) on Jan. 30, 2006]
[edit reason] No blog links, thanks. [/edit]
What if I or someone else in tern advertise on your site and still lead them to more ads, does that surfer come out with a good feeling of accomplishment and fulfillment, or a similar experience to pop up porn? Do you think that same visitor that you took from my site for pennies is going to come back to my site ever?
Who says everyone cares about the visitor experience? Although, you do sound like a sweetheart.
Porn? What does that have to do with it. If you're worried about your visitors leaving your site and never coming back "for pennies" then start blocking ads or remove AdSense.
I built my site for a good user experience first then added AdSense for earnings, for me, not an agent of an agent of an agent of an advertiser for widgets!
So, should it be safe to assume you don't use adwords or any other PPC marketing for that matter? It seems you feel that any site with AdSense should be disqualified from that marketing option.
Maybe it's possible for a you to make a few bucks doing this, but you're missing out on The Game, the chance to actually create and achieve something with your life. If that's all there was to the web, I'd go back to a cubicle job.
I've spent >10 years working as a consultant to various fixed-income derivatives desks in London and elsewhere, so I cannot write off all arbitrage as worthless/immoral!
But the AW/AS arbitrage model, especially as seen in MFAs, is pretty hard to justify IMHO, and the same effort spent creating orginal content would be much better!
Rgds
Damon
The poster is simply making the point that buying AdWords traffic in order to show AdSense ads is a parasitic business model that adds nothing to the Web. It's buying clicks as cheaply as possible from legitimate publishers in order to waste the web surfer's time.
I understand Jomaxx's point, but the only way a web surfer will waste time is if he/she isn't finding what they want. As a publisher, there is only one way to influence that: keep your site updated with lots of content relevent to your niche.
We cannot assume that a surfer, visiting your site, will find everything he/she wants. From their standpoint, those Adsense ads may be a link to even more pertinent information that could indeed help them with their query. Basically, "If the site I'm currently browsing doesn't have green shoes, then I'll click this link (Adsense) which says it has green shoes."
There's nothing wrong with that.
The only, "parasitic" thing about it all, is the business-model a publisher establishes in order to get his/her links into the advertising arena. When that happens, his/her links begin to appear in sites frequented by the surfers he/she wants to attract.
I see nothing wrong with that.
The good thing is, I get a $25 credit from my webhost, so the first round is on them! :)
But the AW/AS arbitrage model, especially as seen in MFAs, is pretty hard to justify IMHO, and the same effort spent creating orginal content would be much better!
That's the thing - if you create original content today, it will be drawing traffic today, tomorrow, next week, next month, next year. Occasionally it will be linked to from elsewhere (depending on how good it is) and it will draw massive surges of revenue.
AW is only as good as long as you keep feeding quarters into the meter. Original content is good for the life of the site (if it's about widgets that may become outdated - don't worry, said widgets will be bought on ebay someday and some prospective buyer will find your site).
"If the site I'm currently browsing doesn't have green shoes, then I'll click this link (Adsense) which says it has green shoes."
...But in the situation I think you're describing, the site doesn't have any green shoes! It has little content and tons of ads, some of which may be for green shoes.
My point is that I've never seen a discount for content ads - only ever seen a cent or so difference either way. This time is yet another example of the non-appearance of the smart pricing discount.
Have you brought this up in the AdWords forum? Your experience certainly isn't universal.
Yes I have done in the past - that's how I know my experience is far from unique. I'm not saying my personal experience is universal - it's not unique either.
Smart pricing might work better for some than others. Maybe for it to work you need to be a big spender and have a personal adwords advisor managing your account, or some big stick to bash Google with in order to get the mythological discount. Maybe my adwords spend isn't large enough for them to start applying smart pricing and thus slips under the radar. Who knows.
If I advertise in content or not depends on if the ad campaign is working for me or not. In the main, that is down to what the ad says, where I place it, and what I'm trying to achieve with the campaign. If I get a discount (never have) doesn't come into the equation.
Just a general ovservation - I think smart pricing works better for the larger advertisers. Smaller advertisers seem to get the raw end of the deal. That doesn't encourage smaller advertisers to use content, therefore smart pricing is not the wonderful inducement to advertisers to advertise in content we see it touted as.
If it works for some then that's great, but there is the flip side that it doesn't work for a lot of other advertisers, and at the end of the day it's main function is to provide a return to Google's shareholders. Advertisers and publishers are not the purpose of smart pricing.
at the end of the day it's (smart pricing's] main function is to provide a return to Google's shareholders.
Well, duh. :-) And it accomplishes that by making the content network more attractive or acceptable to advertisers. Like it or not, that's the premise behind smart pricing, and to judge from Google's success with the content network, it appears to be working.
I started using adwords for traffic when my site got killed in the Google search results 1 year ago. I survived to see my site return somewhat in October. Since then I've increased my adwords spend and netting more money than ever.
Athough it seems to get a little harder each week to keep the ROI up as content advertisers get smarter. Since I'm an advertiser too - I get smarter. It is a lot of work though.
Now I'm on a new cycle of content generation.
ps. greatings from sunny florida thanks to arbitrage - yes, it can work.
Well, duh. :-) And it accomplishes that by making the content network more attractive or acceptable to advertisers.
Oooohh - I love this playground banter ;)
My point is that it only makes it more attractive and acceptable to advertisers if they get the discount that they have been promised. If they don't get a discount, it ain't attractive is it? And you are bound to question it's usefulness as a supposed inducement - especially if you have been whacked by click fraud.
We both see the sense behind it. EG visitor in the Phillipines clicks on a US medical practitioner's ad. That's never going to be a sale, and logically it should be discounted. You believe it works as an inducement, I believe it would be in inducement if the discount ever appeared. We could be having this squabble forever, so I aim to leave it here in this thread.
Duh :)
i recommend that anyone interested in this do a encyclopedia search of "efficient market" for more details.
so, although it might work for now, the profitability will only last for a short time. then you are left with the expense of running ads but without the excess earnings.
i think it is obvious that the most sensible thing for a publisher to do is grow their content. high quality content will generate revenue far longer than any arbitrage strategy. in the end it will create higher revenues.
lastly, i am skeptical of those who are getting this to work and advertising their success. if you have really uncovered an arbitrage strategy, would you really go around proclaiming your success thereby inviting others to the party? this very act would be the beginning of the demise of your strategy since you would be inviting more bottom-feeding competition. in other words, you are accelerating the natural tendency toward efficiency even though you are profiting on inefficiency. sounds like a bad business strategy to me.
If you have a legitimate site, I see it as very hard to have a click through rate that is equal to your ad words traffic, this means a 100% conversion, and the only way to do that is by having a pure ad words site which is against TOS if I am not mistaken.
Nawar
