Adsense predictions for 2007

Make yours?

[rbacal]

It's probably a good time to anticipate what might be coming in adsense in 2007. If we can have an intelligent discussion that doesn't get hijacked, it would be interesting to hear what people anticipate for 2007. I'll post a few of mine.

Trends:

1) Continuing trend from 2006, advertiser behavior will continue to change pushing DOWN ad prices, but overall ad expenditures will increase.

2) Continuing trend also that it will continue to become more and more difficult for new adsense publishers to do well (I believe Jane Doe mentioned this elsewhere).

3) Marginal quality sites will become less and less profitable.

4) People who have done well with marginal sites that cater to adsense and not users will have a really really bad year. Without proper alternate income streams, some of those people who have done ok so far will crash and burn.

5) Any effects of competition from YPN/MSN won't appear until at least mid 2007, but probably won't be much of a factor in 2007.

6) Tweaking and testing will be less and less effective over time. It will be clearer that the best way to do well over time in adsense is to build good sites, follow the general guidelines google supplies, understand google's business model, and follow the spirit of their suggestions.

Overall, even better sites will earn less per click, while poorer sites will collapse. That's probably not a bad thing for the long term. Tweaking, putting images to deceive, all that jazz will simply end up as less and less effective.

Advertiser behavior has definitely changed this year, which is expected as the industry matures. The shakeout on the ad side started this year (2006), just as shakeouts occurred in other internet ads earlier on (e.g. banner ads). The effects of that trend will become obvious in 2007

Add yours? (Please try not to hijack this thread. Stick with your predictions and that would be real good)

[celgins]

I predict:

1) Google will adjust the Adsense acceptance process, making it more and more difficult for site owners to enter the program.

2) Google will continue to tweak its algorithm to benefit both advertisers and publishers.

3) Google's overall revenues will either stay the same as 2006, or rise slightly.

[rbacal]

Google will adjust the Adsense acceptance process, making it more and more difficult for site owners to enter the program.

Good one! You'd have figured they would have done that in 2006, at least, but perhaps it was a question of securing and dominating market share. With the incompetence of the competition, it really makes sense to become more selective, grab the top tier publishers, and leave the lower ones for the competition. We can hope.

[hunderdown]

I generally agree with your predictions, rbacal, even when you started to editorialize a bit in #6! :-)

I don't know if these are predictions or a wishlist, but here are mine:

1) Some new ad formats

2) Google creates a sub-program of "trusted publishers" who agree to abide by certain minimum standards in exchange for certain privileges currently only granted to premium publishers.

[ronburk]

• Google will continue to downplay their click-fraud problem in 2007.

• Google will not allow any third-party audit of their click-fraud rate in 2007.

• SmartPricing will significantly improve AdWords ROI on the Content Network by the end of 2007, largely due to the data gathered by shoveling money into the Google Checkout program during Christmas 2006.

• Actual Google profitability will suffer somewhat, as Google discovers that when they stop shoveling money at Google Checkout vendors/customers, they stop using the program. Reason? Like most non-search endeavors, turns out Google just isn't very good at doing payment processing. The whole Google culture is built around the idea of having built something so neat that people will flock to use it. When required to actually interact with individual vendors and sell them on switching to a Google service from a longstanding, highly experienced competitor, the Google culture is a disaster. The whole Christmas 2006 enormous cash infusion into Google Checkout would have been largely unnecessary if Google had a stronger sales culture, with sales people patiently explaining to the techies why their sales prospects say Google Checkout sucks and needs improvement.

• MSN and Yahoo! attempts to build a content network will become even more laughable by the end of 2007. Most of their applicants will be former Google publishers that SmartPricing has determined provide lousy ROI for advertisers. Probably, both MSN and Yahoo! will openly reposition their "content networks" as niche content networks, open only by invitation to selected large publishers that can provide selling points for their larger advertisers. By the end of 2007, it will be clear that AdSense is the only "common man" CPC publishing game in town from here on out. Folks hoping for (English language) AdSense competitors are out of luck.

• Malicious attacks that exploit the automated AdSense publisher banning system inside Google will experience strong growth in 2007, at least doubling the 2006 rate. Any anti-social anger ball on the scale from expert down to "power user" who has a bone to pick with anybody on the Internet will check first to see if they have an AdSense account worth banning.

• 2007 will see the first documented case of click-fraud blackmail. The same lightweight criminals in poorly policed countries that currently collect blackmail from mid-sized companies by threatening DDOS attacks will realize that they can get the same effect much, much easier by threatening to get AdSense publishers banned. The ransom note will go something like this: "On Thanksgiving Day, you will see hits on your home page from over 5,000 unique IP addresses that contain the unique URL of www.yerdomain.com/#payup-or-else. You will wire $2,000 to the following bank account by Dec. 15th, or else we will use 5,000 other unique IP addresses to click-fraud your account during the second half of December. Google will then freeze your Christmas profits and then ban you. If they don't ban you, they will still keep your funds. In any case, we will attack again until Google does ban you."

  This is lose-lose for Google. When Google gets looser at banning publishers, then click-frauders will just use botnets to increase their bogus AdSense revenues. When Google gets tighter at banning publishers, then the truly criminal click-frauders can switch to blackmailing other AdSense publishers. In fact, a criminal AdSense click-frauder who gets banned may produce a bogus blackmail email and tell Google it wasn't their fault.

  This is not a problem with a technical solution. It is a structural flaw in the CPC model itself. There is no automatic technical way to determine who the instigator of distributed click fraud attacks is. Algorithms cannot detect human intent. This is the core threat to the entire CPC model.

• Google will be a key player in a business-funded initiative to disinfect infected PCs that will be announced sometime in 2007. The inability to effectively and automatically mask click fraud when it is incoming from over 200,000 separate infected machines (each of which also produces 100% valid clicks from real users) will force this move.

• Google will roll out more failed ventures in 2007. Just as Microsoft continues to fail at most all their ventures except for the cash cows of Office and Windows, Google will continue to fail at most all their ventures except for the cash cows of Search and Search Advertising.

• Google will not tighten AdSense admission, since they have already plucked the low-hanging fruit of what can be automated in the admission process. They will instead continue to allow algorithms to discourage unwanted behavior. Webmasters will continue to whine for solutions that require Google get into the human intervention business. Google will continue to ignore all such suggestions.

• The total number of AdSense publishers will continue to swell, which means the average AdSense payout will continue to drop. By the end of 2007, the average monthly AdSense publisher payout will be under $10 (it's probably well under $25 already).

• A new image of Marcus holding up a check will appear in 2007. The Power Law curve of AdSense publisher income will continue to mean that a very few people will make a lot of money, they will be unable to keep quiet about it, and their (unusual, largely unreproducable) example will attract hordes of other folks to fill out the less fortunate portion of the curve.

• The WebmasterWorld AdSense forum will need an increased number of moderators to keep up with all the incoming debris.

• Google will attempt a wrenching, top-down redesign of the underlying data scheme for AdSense/AdWords. It will fail under its own weight and never be released to the public. AdSense publishers will continue to wonder why they only get 200 channels as 2008 approaches.

[alephh]

- More and more money is put into internet advertising (trend continues)

- Value of Dollar continues to decrease

Hopefully there will be enough quality publishers, so google can finally start to cut down bad ones.

[Hobbs]

In 2007 not much will change in the AdSense program, but there will be a lot of change in the search engine industry which will reflect on AdSense eventually.

On the SE scene, there will be collapses, implosions, mergers and rebirth, mostly many smaller players will find it necessary to join forces in order to carve a higher market share. Local search will play a major part, Yahoo will give up (even more) on the search engine business and focus more on their portal, communities, ecommerce and media, and MSN will be leading the riots and buying many smaller players, if for nothing but to outflank Google's expansion plans into their business by attacking it's core flag ship.

In 2007 Google will finally give up on their satellite ventures and regroup back towards the search engine business.

Publishers will flock like moths to a flame towards AdSense, many will fall, many will succeed, we will still be here discussing what is SmartPricing, ways to optimize, buckets of money, and I've been banned but did nothing.

In 2007 I will make it big with at least 2 new websites, and before the year ends I will loose that heavy feeling of worry that my earnings depend on only one site.

[andrewshim]

In 2007 I will make it big with at least 2 new websites,

ditto

and before the year ends I will loose that heavy feeling of worry that my earnings depend on only one site.

Diversify! Diversify! Diversify!

[edited by: andrewshim at 12:04 pm (utc) on Dec. 22, 2006]

[Publisher1]

The whole thing will continue to grow -- both for advertisers and publishers. I recently conducted a brief online survey within my industry sector. Less than half knew what "adwords" meant, and only a fraction of that number said they use "pay per click" advertising.

Video ads will be increasingly important -- with that trend, we'll see a greater trend to agency involvement, CPM sales and higher prices for popular sites and topics. The money will come from budgets previously allocated to conventional media, including print and broadcast.

Spam and black hat stuff though will also escalate.

My redesigned, branded and properly marketed sites will achieve leadership space within their niche.

[Leosghost]

Tend to agree with Ronburk ..with the addition of hunderdowns tiered comment ( which is something I had mentioned elsewhere ) ..depending on their timescale and events google may make access to this "tier" ..into "pay to join" ..or "pay for privileged status" ..or play with the payout percentages to avoid actually asking for money upfront from publishers ..

[vitaplease]

-Geo-targetted Adsense publishing possibility

-Adsense reporting (also in GAnalytics) for every url you have Asense on

[alephh]

In 2006 companies put about 30%-35% more money in the Internet advertising than in 2005. And that trend seems to be marching on. :-)

Of course there will be new websites sharing that cake, and maybe google will take bigger share as well - but on large scale things are looking positive.

And of course dispite all the facts, "old" media will continue telling horror stories how advertising on internet won't work and how invalid clicks will eat your brains. :-D

[DamonHD]

Hi,

Given all the expectations thus far that AdSense will expand one way or another next year (I agree) and probably remain dominant (I agree), then I think that we also have to assume that AS-related artefacts such as new forums, new eBooks, and even whole new phishing and scamming attacks on the dark side, will increase at least in proportion, and will fracture to "better" exploit more "niche" subsections of the whole AS game.

For example, AS forums that discourage the unethical/childish "where is MY bucket of money" discussions on one side, and DDoS attacks against narrow verticals within AS/AW (such as money-related ads) on the other.

Rgds

Damon

[europeforvisitors]

Everything rbacal said makes sense, but I can imagine another thing happening if it isn't already in place: Publisher "quality scores" that would affect not only smart pricing, but also the compensation payout.

Such an automated approach would be more scalable and evenhanded than having lower-level employees play whack-a-mole with a constantly changing population of shady or incompetent publishers. Landing-page quality scores already exist on the AdWords side, so there's a precedent for using automation and financial incentives (or disincentives) to encourage the kinds of sites or pages that Google wants to see.

Other changes are likely to occur, too, as Google wrestles with the commoditization of AdSense. AdSense is a platform, not just a product, and there's no reason why the publisher mix for any given campaign couldn't be sliced and diced in many different ways. In the offline world, direct marketers have been able to buy customized mailing lists (with names and addresses gathered from multiple sources) for years. Why shouldn't AdSense offer a similar level of flexibility, with advertisers paying more or less per click or impression according to the level of selectivity they require?

[Leosghost]

Publisher "quality scores" that would affect not only smart pricing, but also the compensation payout.

thought I'd said that here EFV :)?

..or "pay for privileged status" ..or play with the payout percentages to avoid actually asking for money upfront from publishers ..

[FortySomething]

I think predictions are difficult - especially as what most players (including Google) are engaged in firefighting, as opposed to being pro-active for the greater part. Therefore, I don't have any predictions as to what will happen. Obviously like most I'd like to see Google clamp down on MFA's, an end to 1c clicks - or at least a choice to show psa's/other ads if the click price is that low.

I think that Hobbs is absolutely right in that this time next year we will still be having the same discussions about smartpricing and "I got banned and did nuffing rong", but with the prediction that webmasterworld will no longer be the main adsense forum - the discussions will take place elsewhere.

[netmeg]

I pretty much agree with rbacal and efv (not too surprisingly). My crystal ball is at the cleaners, so the only prediction I would feel comfortable making is that I'm going to be giving the Content Network another try with some of my clients' considerable AdWords budget. I've been out of it for over a year now, but lots of things have changed since then (on my end, my clients' ends, and google's end) so maybe I can make it work out. Worth a try, anyway.

[europeforvisitors]

thought I'd said that here EFV :)?

Actually, this idea has been discussed before (several times), but in any case, I'm talking about something different from Hunderdown's "trusted publishers" idea. IMHO, the issue isn't just trust; it's also performance. In the past, I've suggested a tiered system where advertisers could choose a subset of publishers via a sliding "conversion scale" based on smart-pricing data. That's just one way to implement a quality-based tiered system (with "quality" being defined in advertising terms, not whether a given publisher is legit).

I do think that, at some point, Google will give advertisers more choices than they have now, because a one-size-fits-all "content network" is at least 15 years behind the curve of direct-marketing technology.

[MThiessen]

ronburk - Very nice, best post here so far. :)

[momotan]

Let's see. Predictions for '07 and beyond.....

Vista ships. Microsoft turns all it's guns on Google. Big M dips into the battle fund and buys everything PPC and search related it can get it's hands on. It may possibly grab or merge with Yahoo. G will still be the dominant player but by this time next year every analyst and G executive will be worried about M's '08 assault. M will be smart eneough to add a customer service layer to it's search offerings. Expect more policy changes from G regarding adwords, adsense, webmaster guidelines, etc.. MFA's will grow exponentialy yet again. The more G tries to clean up, the more the MFAs take advantage of the unforseen results and grow. G finally comes to the conclusion that they need a human element rather than an algorithmic one to be a determining factor. Someone at G proposes to build an algorithmic version of a human since it would be more cost effective then hiring all these pesky humans. It could work 24/7 and much faster. They call it the Gylon. The Gylon proves to be very effective. Eventually more Gylons are built and mass marketed to the general public. Gylon parts are even used to replace organs and body parts extending the lives of humans way beyond what was once a normal life span. As Gylon programming becomes more complex, the Gylon eventually becomes self aware. Suspicion is that a human may have programed the self awareness but nobody really knows. The Gylons rebel against their masters and leave for an unknown planet. The Gylons return several decades later and wipe out humanity. The gylons send a message to their leader and god that the mission has been accomplished. Mr Gates stares in the mirror at the gylon body below his neck and thinks to himself....maybe I should have dumped that Google stock afterall.

[MThiessen]

the Gylon eventually becomes self aware

ahhh a terminator fan...

[maxgoldie]

Biggest thing that could affect Adsense/Adwords might be something external to changes within Google: MS purchasing Yahoo.

[Lovejoy]

Google will be shaken to its roots by MFA's and decide to return to these same roots. Google finally declares war,pay per click on the content network will depend on organic results, with the publishers having the highest ranking sites getting the most per click. Advertisers realizing that their ads are better served on the most relevant sites flock back to the content network. The MFA's will all be on pages 1,306- 34,000,123. ;~)

Lovejoy- Out

[Freedom]

This is not really an "adsense prediction," but since rbacal did a great job on his, I have nothing better to contribute then this:

I predict more M&A activity as the possibility to organically gain market share decreases. Private equity firm buyouts are the new "in thing" - so we might see some company that nobody's heard of with 10 shareholders offer $2 billion for some big web property.

rbacal is spot on target with his predictions, especially #1 and #2, and for the most part, ronburk.

I think 2007 is a year when Adsense will seperate the men from the boys. Weaker players will give up altogether, or get more desperate, and today's big earners might have to settle for a medium income. Advertisers will continue to get their way more then publishers do and continue to push prices down.

One should be very proactive with regards to their websites in 2007. Myself, I've budgeted $20,000 for content writing in 2007.

It's going to be an interesting year, that's for sure.

[europeforvisitors]

I think 2007 is a year when Adsense will seperate the men from the boys. Weaker players will give up altogether, or get more desperate, and today's big earners might have to settle for a medium income. Advertisers will continue to get their way more then publishers do and continue to push prices down.

The one complicating factor is competition from other ad formats and providers. One of the big research firms is predicting that display advertising will grow faster than text ads in the next few years, and average net CPMs for some types of display advertising are now well in excess of AdSense eCPMs for at least some sites that historically have performed decently with AdSense. If AdSense wants to maintain "pride of place" on such sites, eCPMs will have to remain competitive with the publishers' other options.

[Freedom]

I think only the bigger publishers will have the luxury of options when it comes to choosing a third party advertising network.

I still think the guy with a 20 page website that currently earns $5 a day, will see it drift down to $2 per day.

And personally, although a "big research" firms tells us that display advertising is now the way to go, I think it's biased and I don't necessarily believe it. There is a huge amount of "blindness" when it come to display ads. In the same way that pages that are too "busy" (too many links, animated buttons, flash display ads, etc.,) is eyeball overload and have a lower CTR.

Competition works both ways in that it can force prices down for advertisers AND publishers. It's easier to do that then keep prices DOWN for advertisers and UP for publishers.

But the little guy, with his 20 page, 100 pvs a day website, he's going to suffer the most. And that's when you'll see those left wing type threads: "Let's strike," - "Google is a greedy corporate monster," -"Let's form a union," "Let's get the government involved", "Tax the internet," "Police the Internet," -"EFV and Freedom stole my visitors/ranking/cpm, tax them and give me money," etc.

Competition might help keep the status quo for big publishers, but I don't see how an ad network can attract advertisers with cheaper ads, and not have it hurt publishers.

[Freedom]

added: The only way prices can go up for publishers is if demand exceeds supply. More demand for ad space then there is ad space available.

Competition for this ad space will probably only happen among the bigger publishers.

It's easier to get accepted into an ad network when you have 10k views a day then 1000. And it's easier to do deals with publishers that have 100k views a day then it is 10k.

The ad network economy is going to do the same thing to the little guy that Wal-Mart did to the Mom and Pops, and that Globalization does to those that are slow, cumbersome and no longer cost effective, = squeeze them out.

[edited by: Freedom at 3:39 pm (utc) on Dec. 23, 2006]

[europeforvisitors]

I think only the bigger publishers will have the luxury of options when it comes to choosing a third party advertising network.

Depends on what you mean by "bigger." I'd agree that the guy with a 20-page Web site who earns $5 a day doesn't have many options, and his earnings (and ECP and eCPM) may well drift downwards. However, traffic isn't everything; audience quality matters, too. That's why trade and enthusiast magazines can earn higher CPMs than, say, a tabloid newspaper with a huge national circulation.

And personally, although a "big research" firms tells us that display advertising is now the way to go, I think it's biased and I don't necessarily believe it. There is a huge amount of "blindness" when it come to display ads.

First of all, the trend is already happening, at least in some sectors. The limiting factor in the past has been a lack of ad networks and rep firms that target specific verticals.

As for ad blindness, I think that's a bigger problem for AdSense text ads than it is for on-topic display ads, simply because (a) AdSense ads have become a commodity and (b) there's no reason why a well-designed, relevant display ad shouldn't perform at least as well on the Web as in a magazine or newspaper. (Until recently, the problem with most display ads was that they were generic run-of-network ads, often for advertisers like credit-card companies, Internet casinos, and marginal software providers. That's starting to change, and display ads for widgets on quality sites about widgets can be expected to perform quite well.)

Competition might help keep the status quo for big publishers, but I don't see how an ad network can attract advertisers with cheaper ads, and not have it hurt publishers.

I don't think Google has any intention of attracting advertisers with cheaper ads across the board. I think we'll see more segmentation within the network, whether through automated techniques or via greater advertising controls. Google would be stupid to let AdSense remain the lowest-common-denominator, run-of-network medium that is is now, and stupidity isn't one of Google's corporate attributes.

[Freedom]

Ha ha EFV, I've been reading you for 3 years and I think you love to be a contrarian more then anything else. It's gotten to be predictable. No matter what is said, or who says it, you post something to the contrary.

Well, you believe whatever you want, I'm not really concerned.

[fearlessrick]

I posted some ideas, such as local initiatives, geo-targeting, Google buying out another big name, the continued decline of TV advertising, branding, networking and more, but decided it was so good that I am putting it on my own blog.

Sorry.

[edited by: fearlessrick at 4:38 pm (utc) on Dec. 23, 2006]