Forum Moderators: martinibuster
Who would buy advertising from a new company? Thats the problem.
If your site is worth sponsoring then you should take a hard look at affiliate programs, and test them rigorously. I and a number of other longtime members earn more from the right affiliate program than from AdSense. OTOH if your site does NOT have useful traffic then you should thank your lucky stars for whatever you can get.
I believe it all started with GoTo, which became Overture, which became Yahoo Search Marketing. Sprinks came later (and was eventually acquired by Google), followed--if I recall correctly--by AdWords and eventually by AdSense. Other products in the same or a similar vein include AdSonar, Kanoodle, and IntelliTXT.
In other words, there's no shortage of alternatives to AdWords/AdSense. But because Google and its AdSense network have far more traffic and advertisers than their competitors do, the alternatives aren't very good (especially for publishers who have significant audiences outside the United States).
In the U.S. there's one alternative, YPN, but outside the U.S. there's almost nothing that competes with AdSense.
It's kinda weird that Yahoo and MSN don't rush to get their programs out. There's so much money to earn with this.
For good targeting are 2 factors important.
1.) Good algorithm
2.) Enough advertisiers to find for each site good ads.
Look in the YPN forum here, and You see what difficulties has the number 2 on the search market with this 2 main factors
In the U.S. there's one alternative, YPN
YPN is only one of several alternatives, such as AdSonar, Kanoodle, and IntelliTXT.
As for a lack of competition outside the U.S., that may have as much to do with critical mass as anything else. Google has a huge search audience outside the U.S., and in some countries it has an even bigger market share than it does in the States. That makes it harder for competitors to jump into the fray for keyword-targeted ads.
In the U.S. there's one alternative, YPN,
There's also ContextWeb, Kontera, and Kanoodle.
Microsoft also reportedly wants to launch an ad network and Amazon as well.
Google's advantage is that it's years ahead of the competition in terms of ad inventory size and diversity, and technology to target ads. As we all know, the better the targetting (especially in niche sites) the better the income - and you need a big, diverse stock of ads to be able to achieve this.
From the advertisers point, Google is the biggest brand, if you want to place your ads on the most popular search engine, then it's got to be Google and the technology for placing ads even for the smallest of advertisers is very easy. For publishers, the stock of ads means (mostly) good targetting hence good income.
Although other companies do contextual advertising, except for the real biggies such as YPN and M$, there is no chance they will ever catch up on Google's lead. Even YPN and M$ are going to have to invest a lot of ca$h and effort to catch up with the lead.
YPN is only one of several alternatives, such as AdSonar, Kanoodle, and IntelliTXT.
For most websites AdSense will likely deliver more relevant and higher paying advertisements than any of the other players in the market.
Most of the other players in the market are pretty small, and Google doesn't have to worry about them because it's unlikely that that they'll make many users switch from AdSense to another contextual advertisement program.
I would bet that Google won't be able to continue to not disclose how the revenue is split.
If Microsoft or Yahoo opened up to small publishers, they could do several things to lure publishers away from adsense e.g. Give a bigger share of earnings to publishers and be more transparent about this process.
Google is already paying out a far bigger share of "content network" revenues to publishers than traditional ad networks do. It's hard to see how YPN or MSN could pay a higher percentage and still earn a worthwhile profit, especially since Google has far greater economies of scale.
As for being "transparent," Google would be foolish to reveal the specifics of its compensation formula, because that would just make it easier for YPN, MSN, or other competitors to cherry-pick its most desirable publishers. It makes far more sense for Google to keep competitors in the dark.
I would bet that Google won't be able to continue to not disclose how the revenue is split.
It already discloses the overall percentage. Also, the percentage split is far, far less important than bottom-line revenues are. Any publisher with an ounce of brains would rather have 70% of $1,000 than 80% of $500. Google has a huge lead in building a diverse pool of advertisers around the world, which means that its competitors will need to offer more than me-too products with claims of a higher percentage split to make serious long-term inroads into the Google publisher population.
It's interesting that one at least AdSense competitor (AdSonar) has turned to private labeling in vertical markets as a way to compete. That may signal the real competition to AdSense lies: in niches where third-party vendors bring their sales expertise and publisher connections to the party. That doesn't necessarily mean that niche players are a threat to Google, however: In the advertising business, there are plenty of small- to medium-size ad agencies that prosper in niches like electronics, pharmaceuticals, foodservice, finance, etc., but they aren't putting the mass-market multinational ad agencies out of business.
Any publisher with an ounce of brains would rather have 70% of $1,000 than 80% of $500.
I don't agree that the margins won't come down further or that the split towards the publisher won't increase.
In some UK-specific areas that I look at, the cost per click in Yahoo(Overture) is much higher than in Google suggesting that a Yahoo version of Adsense could pay Publishers handsomely.
That doesn't necessarily mean that niche players are a threat to Google, however: In the advertising business, there are plenty of small- to medium-size ad agencies that prosper in niches like electronics, pharmaceuticals, foodservice, finance, etc., but they aren't putting the mass-market multinational ad agencies out of business.
Google was started by two PhD students, and in a few years, became the biggest search engine and biggest advertising agency in the world (blowing right past all the established Madison Avenue advertising firms). Just the same, another startup can do the same to Google.
And a company like Microsoft - with $35 billion in cash, zero debt, and a cash cow monopoly grip on desktop OS - is definitely a threat to any tech company.
Google is flying high right now, but their position is hardly safe. It's very easy for people to switch search engines, and for webmasters to switch ad networks.
Google was started by two PhD students, and in a few years, became the biggest search engine and biggest advertising agency in the world (blowing right past all the established Madison Avenue advertising firms).
Google isn't an ad agency. Google is a media network. Comparing Google to a Madison Avenue ad agency is like comparing NBC Television or Gannett Newspapers to a Madison Avenue ad agency--it's an apples-and-oranges comparison.
Google is flying high right now, but their position is hardly safe. It's very easy for people to switch search engines, and for webmasters to switch ad networks.
Sure, it's easy in theory, but in practice, people don't switch without a good reason--especially if it means putting income at risk.
Google's position may not be "safe," but Google is in a much better position than any of its competitors are.
Google isn't an ad agency. Google is a media network. Comparing Google to a Madison Avenue ad agency is like comparing NBC Television or Gannett Newspapers to a Madison Avenue ad agency--it's an apples-and-oranges comparison.
And apples and oranges are potential substitutes. If people previously could only buy apples, and suddenly a new company introduced oranges, the orange sales would definitely eat into the apple sales.
Google is definitely an ad agency. They're a middle man intermediary that places ads on thousands of properties that they don't own.
A company has X dollars to advertise. Historically, maybe all that money went to a Madison Avenue ad agency intermediary, to develop & place ads on thousands of TV shows, magazines, newspapers, billboards around the world.
Google takes the same intermediary role. Google collects money from the advertiser, and places the ads on thousands of media properties that they don't own, and takes a middle man cut in commission.
Firms like Google Adsense definitely take ad dollars away from Madison Avenue firms like J. Walter Thompson and BBDO.
[online.barrons.com...]
Firms like Google Adsense definitely take ad dollars away from Madison Avenue firms like J. Walter Thompson and BBDO.
That doesn't make Google an ad agency. Nor is there anything unique about Google's taking money away from traditional advertising budgets. Sales-promotion agencies, frequency- and incentive-marketing agencies, direct-response firms, media-buying services, producers of collateral, etc. have been doing that for years.
It's also worth noting that online advertising is a small part of overall advertising expenditures, and contextual ads (Google's business) are an even tinier part of the advertising market as a whole. That's obviously one reason why Google is experimenting with rich-media ads, "image ads," aggregation of small ads in newspapers, etc.--it realizes that AdWords/AdSense ads are a niche product (albeit a highly profitable niche product), and that growth depends on expanding into other areas of the ad business.
In other words, we as AdSense publishers need to remember that we're a small piece of a much bigger picture, and the advertising wars won't be won by luring unhappy AdSense publishers away from Google.
