Google announces 1st quarter AdSense numbers

Google 1st quarter AdSense revenue for partners.

[scottb]

Google just announced its first quarter 2015 numbers. Compared to the first quarter in 2014:

- Total advertising revenue increased 11%.
- Google-owned site revenue increased 14%.
- Partner revenue increased 1%.

Compared to the fourth quarter of 2014:

- Total advertising revenue decreased 5%.
- Google-owned site revenue decreased 4%.
- Partner revenue decreased 8%.

If you sense you have been struggling to grow revenue this year, the above number should help explain why.

[scottb]

More information. Compared to the first quarter in 2014:

- Aggregate paid clicks increased 13%
- Paid clicks on Google sites increased 25%
- Paid clicks on partner sites decreased 12%
- Aggregate cost per click decreased 7%
- Cost per click on Google sites decreased 13%
- Cost per click on partner sites increased 2%

Compared to the fourth quarter of 2014:

- Aggregate paid clicks decreased 1%
- Paid clicks on Google sites decreased 3%
- Paid clicks on partner sites increased 4%
- Aggregate cost per click decreased 5%
- Cost per click on Google sites decreased 3%
- Cost per click on partner sites decreased 11%

[trebuchet]

Cost per click on partner sites decreased 11%

Wow, you don't say!

Given business and advertising cycles, comparison with Q1 2014 is where it's at. But those figures are mixed and I'm not sure what conclusions to draw from them.

[ember]

When I met with a Google rep in January, he said they expected first quarter of this year to be down but he didn't say why.

[scottb]

Trebuchet, I worry about the top line numbers. The 1% increase in partner revenue versus 14% that Google kept for itself tells me the company needed to keep more at the expense of the partners to protect its profits and stock price.

Another big eye opener is paid clicks increasing 25% for Google while decreasing 12% for partners. That sounds like Google is shifting higher quality ads away from partners.

[trebuchet]

Yes, that was my first thought. When G's advertising revenue decreases, non-G publishers soak up the pain. When it increases, they get a small piece of the pie. But that's about what you'd expect from any hulking multinational with bean counters and shareholders to please.

I'm more concerned about the future of Adsense. It's my full time job now and I want to know how viable it's going to be in the short to medium term.

[netmeg]

I'm not particularly worried about AdSense - but while I probably *could* live off it, I don't want it to be more than 40% of my income, either. Because I don't have enough control over it.

[scottb]

Netmeg, I couldn't agree more. I love seeing my own sites grow, but I'll never be tempted to make them my main focus.

[breeks]

- Paid clicks on Google sites increased 25%
- Paid clicks on partner sites decreased 12%

Seems to be the direction they are heading. Google sites they get 100%, partner sites they have to share.

[trebuchet]

I went full time so my wife could go back to work. Plus my sites are authority sites with 2,000+ pages. I reached a point where I had to decide whether to expand them to meet demand or let them stagnate. But you are right, the lack of certainty and control with Adsense is stressful.

[jbayabas]

I'll say it again. Google is stealing from us to protect its bottom line. No one can convince me otherwise.

[netmeg]

I'll say it again. Google is stealing from us to protect its bottom line. No one can convince me otherwise.

Then you should find another solution. It's ridiculous to stick with a program you believe is stealing from you. And before you say this is all there is - where exactly do you see this going? How is this going to end up, if you don't make changes *now* ?

[jbayabas]

It's just mean I'm screwed. It's like in a job where you're underpaid even when you're overworked. You're stuck because finding another job is hard. So you just take in the pain.

[trebuchet]

Google is not "stealing" from publishers. The whole game belongs to them and they just let us play, for a percentage stake. Like all businesses they work to maximise what they earn and reduce what they pay out.

[jbayabas]

The same case with the big bank TD in Canada. They generated 2 billion dollars profit last quarter but still layed off a lot of people. Greed is the name of the game. They don't care about the little guys like us.

[netmeg]

Why would you expect them to?

[trebuchet]

Banks are probably the worst but Google is not a cooperative either, in spite of their "do no evil" mantra. They're a business and they have bottom lines to watch and shareholders to please. They're not stealing from you any more than McDonald's steals from its employees because it pays them $6 (or whatever) an hour.

[MrSavage]

I've had a hunch on what's going on. This is not a growth endeavor. It's shrinking, and fast. I also feel that big picture wise, the program is becoming less important. To me the dropping importance is tied into the concerns about the shrinking organic traffic. It's only natural for Google to push in other directions, like their own properties. Having fewer organic results on pages, or below the fold indicates to me that my adsense advertising streams are not as highly regarded. It's a shrinking island, some of fortunate, some aren't. The numbers tell me it's time to create much less dependence. I don't get the strong sense of partnership from a few years ago. and that's fine. I have been unfortunate in that I didn't react upon the trends which I sensed a long while ago. At this point I'm not good enough or smart enough to be in the 10-15% who will likely flourish with relevant and decent ads. For now I'll be happy with what I get from Adsense, but I'm far more realistic about how all this ties together. Not being responsive enough to the shifts has been a big learning experience for me.

[webcentric]

Stealing from us? Hogwash!

I've said this for years. Google single-handedly extended the life of the pay-per-click advertising model when they created Adsense. Many significant pioneers in this industry had already bowed out of the game (because of click-fraud and/or mismanagement) by the time Adsense came on the scene. This is not, nor has it ever been, a static game. I venture it takes a great deal of investment dollars to stay ahead of the fraud machine and to keep the product modern (responsive ads for example -- another industry first). I've seen a great deal of development put into Adsense over the past few years. I may not like all the developments but without them, I'd be certainly looking at a company that doesn't care about it's future. I can complain about Google with the best of you but at the same time, I can recognize an innovative company that does see the merits in keeping us in the game because we do drive profits for them. Will they completely shut us out some day? I suppose if they can and it doesn't hurt their bottom line, then anything's possible. That's business. @netmeg and other intelligent people here understand the dangers of putting all your eggs in one basket and on the flip-side of that, understand the wisdom of diversification. I've had great success with Adsense and also suffered some bad times. Most of the ups and downs though have less to do with Adsense and more to do with traffic source diversity.

I've seen plenty of people complaining about declining Adsense revenue when the real problem is a decline in traffic for example or a decline in traffic quality. Yes, Adsense has a whole array of issues (mis-matched ads, seasonal lulls, more ad spaces across the Internet demanding ads). I contend that most people's complaints about declining Adsense revenues are more related to market factors than anything specific with the Adsense program itself.

Complain about the service if you must or build a better one if you think you can and then see if you can make it more profitable for your publishers than Google does. I suppose, if you do try to do this, it will help if you ignore any and all competition, the ebbs and flows of the global marketplace, and you should certainly not give click fraud another thought. That way, you'll be free to pass along the savings to your publishers while keeping enough revenue for yourself to cover your expenses.

I don't mean to be derisive but I do mean to be real. Let me put it another way. Basing your business model on another company's business model is a house of cards at best. Always has been, always will be. If you accept the subordinate position in such a relationship, how can you possibly expect to be in control of your own destiny. You are caught up in the maelstrom of another company's whim. If they are stealing from you, then you are helping them do it and the day they tire of using you for profits will be the day your business model comes crashing down around you.

Google is an innovator. Most publishers (I know a generalization) are copycats barely capable of setting up a word-press site (let alone developing something truly innovative). Most of the grumpy ones (I didn't say all) have followed a well laid out formula and are just cranky because it no longer produces the way it once did. Sorry, but for those who haven't noticed, nothing stays as static as some of the business models I've seen that are now failing right and left. It's easy to complain about change. It's far more difficult to actually keep up with the changes and it takes something way above ordinary to actually drive change. I contend that Google is far above ordinary and complaining about not being able to keep up is a waste of energy. Having said that, I'll staunchly defend your right to complain and my right to keep addressing the crux of the biscuit.

I like the idea that G makes money from Adsense. For me, it means another egg in my basket. Hmm. Eggs and biscuits. I'll have some gravy with that. ;)

[trebuchet]

I agree with much of that. There's no shortage of people here moaning about Google, spouting conspiracy theories and claiming to have been ripped off. But in my opinion if your earnings are dropping then the simplest explanations are the best explanations. In my opinion Adsense comes down to four factors: the quality of your content (which affects SERPs), the quality of your traffic (which affects EPC), the volume of your traffic (which affects click volume) and your ad placements (which affects CTR). I've worked hard on all of these and so far I'm winning.

My business model is simple: there will always be demand for high quality content and if Google can help me monetise that content, then I will ride the wave while I can. Yes I'm overcommitted and I haven't diversified as much as I should, but that's OK, if it crashed and died tomorrow then I have other options.

[ember]

@jbayabas, you have got to make a change and not let the inertia send you over the edge. Slash your expenses to the bare bone, sell your $400,000 house, take the proceeds and buy a smaller house outright. If any cash is left over, pay off all your debts. Get a job, any job to make ends meet. If you can write, there are lots of places that pay you - not much but something - to write content. It sounds as though you have kids to support. You have to do whatever it takes to keep them afloat.

[webcentric]

Not being responsive enough to the shifts has been a big learning experience for me.

It takes guts to be able to admit things like that and my hat's off to you. In some way, we have all been blindsided at one point or another in this game I would think. Funny thing is, the greatest planning can fail while someone else is gonna get lucky, regardless of how many times they shoot themselves in the foot. It's absurd, I know.

[cabbie]

I want to register with webcentric my vote for Google and adsense..
I make a lot of money from adsense and for this, I am very grateful to Google for allowing me to put their ads on my websites.
I am able to travel and work anywhere in the world, I am able to be a single stay at home Dad, and I can't see how that would have worked had I needed to be at a office 9-5 mon-fri.
Sure, I have noticed cpc down this year but fortunately google traffic has increased more so.
If it all ends tomorrow, I will still be eternally grateful.

[jbayabas]

sell your $400,000 house, take the proceeds and buy a smaller house outright. If any cash is left over, pay off all your debts. Get a job, any job to make ends meet.

Thanks, Ember. We were able to extend our amortization period and reduce our monthly payment. My wife's salary can still pay off all our expenses so we're not desperate yet. It's just that I feel totally shocked about my earnings. Plus, my ego was hurt because I used to pay everything.

I can't find a job while my wife works as no one will care for our young kids. One parent needs to stay home.

It's good to hear that people are doing well which give me some hope that I can still recover.

[hannamyluv]

If it all ends tomorrow, I will still be eternally grateful.

Amen.

[webcentric]

If it all ends tomorrow, I will still be eternally grateful.

Amen

Perspective is a beautiful thing.

[MikeNoLastName]

I've surely noticed too how our traffic is the same or even up, but CPC is down significantly this quarter. I imagine there can be any number of factors, but the 'feel' is as if they were saving the best ads for themselves or at least a larger percent of the bid since it seems in our niche, that the adwords bids are far higher than they were last year..

It could be said that G tends to forget who got them where they are now. The content providers. We were on here before them, it will be interesting to see if we can outlive them, as we've managed to do with many of our competitors through pure sweat, sacrifice and diligence. A few years ago we used to rightly say that without them, G would collapse. I guess G realized this and started creating it's own content and replaced (some might even say scraped) the content out there with its own in many relatively static areas (history "facts", maps, attractions, etc) and started competing with it's own previous providers in ad-serving. Of course they won, because they control the flow of the traffic. For the time being G still needs the low-paid grunts to produce fresh, constantly updated content like news, weather, sports scores, prices and the like, but that will eventually change too when they (for instance) replace independent retailer websites (whom they hand-pick) with their own conglomerate listings of price comparisons. Their ultimate target is to be everything (information-wise) to everyone and that is when,as history shows, it truly becomes scary, when one entity becomes the primary source of all propaganda (er, I mean information).