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Most of us (if not all) are seeing that our earnings per click is going down.

     
7:39 pm on Jan 13, 2007 (gmt 0)

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Most of us (if not all) are seeing that our earnings per click is going down.
For many earnings will eventually fall to 1 cent per click and here is why:

- People are setting up arbitrage sites, and more and more sites ARE actually arbitrage sites.
- We can safely assume that all arbitrage opportunities will eventually be filled.
Arbitrage sites will always be able to have higher click through rates that general merchants.
Arbitrage sites and arbitrage ads will thus force out other merchants.
- The volume of supply for adspace will continue to go up dramatically as people like us come up with ideas (anyone planning on serving fewer pages next year folks?); however the volume of demand will eventually reach a saturation point (it has already in markets like webhosting).

Arbitrage site 10BestBlueWidgets.Com will pretty much always attract more clicks through than BlueWidgetX.Com and rise to the top in AdWords.
Arbitragers will go to the highest paying ad networks. This will be partly on the Yahoo network where the minimum price per click is 10 cent.
You as a publisher may make say 6 cent on that click 10 cent click.
Say you buy traffic on Google to get those clicks. The most you can possibly hope for is 30-40-50% click through rate on this traffic. Say 50%, that means you can pay Google 3 cent for that click. The publisher for that click will get 60% or 1,8 cent for that click. In reality its more like 10-20% click through rate for arbitrage sites and 1 cent or less for the publisher.

This is happening in front of our eyes as we speak. More and more niches are entering into this “race to the bottom”. Many will meet at the bottom of the barrel at the 1 cent minimum. Be warned.

8:03 pm on Jan 13, 2007 (gmt 0)

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Currently, it's an 'advertisers market' - adwords users (and Y! and M$) are still complaining, but they never had it so good.

All the companies are courting advertisers, so prices are dropping, publishers are being squeezed, and swapping network really won't help.

The problem is that the number of advertisers and the total advertising spend is climbing much more slowly than the number of publishers, and the adpublishing opportunities. It's absolutely simple supply and demand.

Changing horse, for a publisher, is unlikely to be the answer. Yes, Google is squeezing hardest, with three clicks often yielding less than 07 cents between them, according to some reports. But at least you get clicks, and there are enough advertisers to supply most publishers.

Google gets away with squeezing hardest because they're the biggest; once publishers start using Yahoo in greater numbers, they'll be able to squeeze publishers too. And they will. It's their job.

And there's no sign of advertisers caring what kind of site they are seen on, which is a shame, as that would see to MFA. Strange, really, in all other mediums, advertisers are very fussy about the company they keep - not so on the web. I like to dream of Google putting publishers in classes, with the best - ie me ;) - getting top dollar while MFA gets The Finger. I can dream!

And there's little chance of a change until web growth slows; according to recent research, it should plateau on 17 November 2983, then gently slide back to steady state at 2700 levels. Approximately :)

OK, I made that last bit up - but you get the picture.

"You can't buck the market!" - whatever the bloggers say!

8:07 pm on Jan 13, 2007 (gmt 0)

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Sunshine1, you're making a number of assumptions that seem unlikely, among them:

- The assumption that other networks (such as YPN) will be able to fetch higher advertiser minimums than AdSense if the average AdSense click cost is in the single digits.

- The assumption that Google will stand by idly while its billion-dollar AdSense network becomes a penny-per-click ad network of last resort.

Another observation: It's certainly possible that the explosion of computer-generated pages for every keyword under the sun is lowering the average EPC across the network, simply because of the dilution factor. But that dilution factor would exist with or without click arbitrageurs. So what are the possible solutions? I'd guess:

- An increasingly aggressive "smart pricing" formula;

- Some kind of qality scoring (if it doesn't already exist) to put the squeeze on junk sites of all kinds;

- Segmentation of the network, with advertisers having greater control over how their "content network" ads are allocated.

- More effective Google Search algorithms and filters.

One way or another, there's going to be a shakeout, just as there's been with the boilerplate affiliate sites that--for a while--dominated Google's SERPs for any keyword or keyphrase that was remotely commercial.

[edited by: europeforvisitors at 8:09 pm (utc) on Jan. 13, 2007]

8:08 pm on Jan 13, 2007 (gmt 0)

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"And there's no sign of advertisers caring what kind of site they are seen on, which is a shame, as that would see to MFA. Strange, really, in all other mediums, advertisers are very fussy about the company they keep - not so on the web..."

----

This happens because they are behind their computers, and the possible controversial issues surrounding the company they keep, is minimal. They don't physically greet their clients or consumer base. All you see is a click generated on your end, and all the consumer sees is a wasted amount of time clicking that misleading link.

8:17 pm on Jan 13, 2007 (gmt 0)

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And there's no sign of advertisers caring what kind of site they are seen on, which is a shame, as that would see to MFA. Strange, really, in all other mediums, advertisers are very fussy about the company they keep - not so on the web...

I've seen any number of complaints about the content network on the AdWords forum, and Google's own ad growth is outstripping "content network" growth, so I don't know that I'd agree with your comment. Also, Google's billion dollars in AdSense revenues are a tiny chunk of the global (or even the U.S.) advertising market. I don't believe for a minute that Google won't do what's necessary to attract mainstream advertisers and ad agencies, especially as rivals such as Yahoo and MSN enter the market.

8:59 pm on Jan 13, 2007 (gmt 0)

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Most of us (if not all) are seeing that our earnings per click is going down.

Not sure how you know everyone is declining.

Some of us (if just me) are seeing a slight increase in EPC.

YMMV.

9:58 pm on Jan 13, 2007 (gmt 0)

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What incrediBILL said. For those who are new to this forum, please remember that misery loves company and shouting fire in a crowded theatre gets more attention and audience participation than polite applause.

(Maybe I should cross-post this in the community-building forum?)

10:11 pm on Jan 13, 2007 (gmt 0)

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Might be interesting to have a simple polling system on WW somewhere? One vote per account

I'd be voting for 'Drastic decrease in EPC'.

12:16 am on Jan 14, 2007 (gmt 0)

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not a bad idea.

Mine's been down about 50% for about a month or so, but it was directly after I made some significant changes so I'm still not sure of the cause.

Today it is back up to about 90% of my daily average eCPM. Could very well be coincidence, but I have no idea.

I don't care really what it's due to, as long as it stays back up :)

12:24 am on Jan 14, 2007 (gmt 0)

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But that dilution factor would exist with or without click arbitrageurs

Ah yes, but to what degree? This we will never know.

12:29 am on Jan 14, 2007 (gmt 0)

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One thing we do know is that click arbitrageurs buy ads, unlike the computer-generated, template-based, keyword-driven "user review" sites that suck up massive amounts of inventory.
12:37 am on Jan 14, 2007 (gmt 0)

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EFV said
So what are the possible solutions?

Here is one: how about letting publishers filter by advertiser instead of by URL?

1:24 am on Jan 14, 2007 (gmt 0)

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Here is one: how about letting publishers filter by advertiser instead of by URL?

That could be one tactic. Another QC/starvation tactic would be to let advertisers filter by publisher ID.

AdWords/AdSEnse could also forbid landing pages with any kind of contextual ads, although that would eliminate some major advertisers such as NewYorkTimes.com and TripAdvisor.

1:50 am on Jan 14, 2007 (gmt 0)

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My CPC is up on a steady trend since April and the same is true of my sisters account on a forum.

I think a lot less people would be complaining about their money going down if they didn't think their peak was their average. Has anyone noticed we don't hear about how far above average one day is? That high just becomes the new "average", that's bad math and I feel it's behind much of the tragedy we read here.

2:02 am on Jan 14, 2007 (gmt 0)

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Another QC/starvation tactic would be to let advertisers filter by publisher ID.
I like that idea, but for controlling the quality of my ads not so much my earnings. If we accept that google works on a normal commission so that they make more money when we do it would be foolish to assume Google will cut their profits in order to make some publishers victims.

I feel that overall any time we block an advertiser that is getting displayed it is replaced by nothing or a lower paying ad. I don't believe the theories that G is having fun crushing our incomes.

4:14 am on Jan 14, 2007 (gmt 0)

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Here is another theory.

Advertisers are being plagued more and more with visitors that are not interested in buying since they landed on the site because an MFA faked the user into clicking an ad or forced them to to get off the page.

In that scenario advertisers would need to lower their bids in order to make a profit. A downward spiral results because the lower the bids the higher percent of MFAs will display the ads of an advertiser.

I'm seeing a nearly unbelievable expansion of non-USA mfa sites hitting my adwords campaign. Noticing BR & RU & IT sites mainly.

4:23 am on Jan 14, 2007 (gmt 0)

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My earnings per click are way up. I think it's easy to say that because of this large sample most of us are seeing that our earning are going up, up up.
7:05 am on Jan 14, 2007 (gmt 0)

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My total earnings are up up. But my earnings per click is seeing a decline. Those 150 cents clicks are rare and few between now.

This will therefore for many eventually be a numbers game. Competing head to head with the rest for numbers. If you are now getting by with your 5 cent average, prepare to boost your business model so that you can servere 5 times more pages to survive on 1 cent.

Parallel to that there will also be a QUALITY game. Quality will still pull well.

Interesting to note that my AdSense for search earnings per click has gone up. Some fairly comparable numbers have gone up by 30-50% in the last 6 months. Seems advertisers may be willing to pay for quality ON Google itself.

1:06 pm on Jan 14, 2007 (gmt 0)

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Face it - until Google requires approving "every" site, the problem will continue in one form or another.

Why not set a publisher id+code and give every "site" their unique id based upon the publisher id and an "extension". This would solve many problems all the way around and they could disable a "site" for invalid clicks or investigation without shutting down someones account.

Until they start approving/disapproving on a site by site basis, the various problems stemming from this will continue.

BTW: I am one who's EPC is not going down.

2:45 pm on Jan 14, 2007 (gmt 0)

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If you are now getting by with your 5 cent average, prepare to boost your business model so that you can servere 5 times more pages to survive on 1 cent.

If your business model is based entirely on AdSense, you're likely to be screwed anyway, because the program won't exist in its current form forever. Publishers who don't have other revenue streams, or who can't adapt quickly, will see their income dry up. (Think of all the people who made easy money from boilerplate affiliate sites a few years ago.)

Face it - until Google requires approving "every" site, the problem will continue in one form or another.

That isn't ikely to happen because manual approval of every site isn't a "scalable" solution. It wouldn't work anyway, because Joe Scammer, who's had his my-noble-and-legit-site.com domain approved, could simply slap ads for mesothelioma, Viagra, and a million other keywords on pages under that approved domain--unless, of course, Google required manual approval of every page with AdSense code, and that definitely isn't going to happen.

3:26 pm on Jan 14, 2007 (gmt 0)

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Since Day One of the AdSense program, our earnings per click (a few thousand clicks per day) have not varied by more than a few cents. CTR has varied widely, partly because of modifications on our end and partly because of Google's tightened targeting. Our site deals with lots of topics, which may help smooth out the peaks and valleys.
3:57 pm on Jan 14, 2007 (gmt 0)

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If your business model is based entirely on AdSense, you're likely to be screwed anyway, because the program won't exist in its current form forever. Publishers who don't have other revenue streams, or who can't adapt quickly, will see their income dry up. (Think of all the people who made easy money from boilerplate affiliate sites a few years ago.)

Having been around a while, I believe what you say is probably true. Although, in this case, I can't see the value of worthwhile content being diminished. It strikes me that Google would be foolish to abandon some form of compensated contextual advertising altogether. I'd be curious to hear what other models, if any, might be adopted. And do you think it's possible that MFA saturation ultimately may spell the downfall of Adsense?

4:12 pm on Jan 14, 2007 (gmt 0)

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> And do you think it's possible that MFA saturation
> ultimately may spell the downfall of Adsense?

I recently read that there are some 650 million computers connected to the Web - that' s now. That's a lot of advertising eyeballs and I seriously doubt Google is going to be ending AdSense anytime soon. MFA saturation is certainly a problem for some sectors, but I think it's outweighed by the enormous potential contextual advertising still has ahead of it.

4:19 pm on Jan 14, 2007 (gmt 0)

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Yes.
4:25 pm on Jan 14, 2007 (gmt 0)

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I can't see the value of worthwhile content being diminished. It strikes me that Google would be foolish to abandon some form of compensated contextual advertising altogether.

I agree. I just think AdSense will evolve, and today's one-size-fits-all content network (where advertisers take potluck and anybody can make money by building a site around AdSense) will become the contextual equivalent of FastClick for advertisers who are willing to pay pennies for run-of-network traffic.

I'd be curious to hear what other models, if any, might be adopted.

By publishers, you mean? There are any number of other revenue streams that can work well, depending on the site, its traffic, and the topic. Display advertising and affiliate sales can work well in the right niches. The important thing is not to rely on a single source of revenue unless you're just out to make hay while the sun shines.

And do you think it's possible that MFA saturation ultimately may spell the downfall of Adsense?

I think Google will either starve the MFAs out (through smart pricing, changes in the compensation formula, and search improvements) or relegate them to the low-paying RON tier that I mentioned above. But I don't think Google will stand by idly and let the MFAs destroy AdSense, any more than it stood by idly and let boilerplate affiliate sites destroy Google Search.

[edited by: europeforvisitors at 4:27 pm (utc) on Jan. 14, 2007]

4:26 pm on Jan 14, 2007 (gmt 0)

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MFA saturation is certainly a problem for some sectors

agreed, my current earnings are past the whole of last January's total payment, I am enjoying an average now of $000.00 (thats 3 figures not FA ;) for this month and this is my niches slow time, good hey

Is google trying to choke the areas under MFA siege, possibly, how else can they clean up the adsense image and help clean the search index at the same time, we know they have headaches there as well with all the junk thats filling the web, no dissrespect to anyone here who has a junk site meant.

This time last year my niche started to see a bit of that junk but towards the end of the year most of it was gone, funny though MOST if not all of them were arbitraging adwords to get traffic.

8:02 pm on Jan 14, 2007 (gmt 0)

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So no-one shares my dream:

I like to dream of Google putting publishers in classes, with the best - ie me ;) - getting top dollar while MFA gets The Finger.

Seems to me that the first advertising agent to differentiate between quality and dross among publishers will win the ad wars; if Google doesn't want the business, maybe Y! or M$ will accept the challenge?

8:44 pm on Jan 14, 2007 (gmt 0)

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I like to dream of Google putting publishers in classes, with the best - ie me ;) - getting top dollar while MFA gets The Finger.

We've had previous discussions of a tiered network. For Google, there would be several challenges in assigning tiers:

1) Determining what the tiers should be based on (editorial quality? conversion rate?).

2) Finding a "scalable" way to assign publishers to tiers.

3) Maintaining the integrity of the tiered network (e.g., making sure that Life-of-Jesus.com doesn't turn into a template-based, computer-generated keyword mill after it's been assigned to an upper tier).

One possibility might be a "Smart Select" system, which would be a new twist on Smart Pricing. Here's a comparison of Smart Pricing and Smart Select from a Webmaster World thread of last July:

With Smart Pricing: An advertiser currently accepts run-of-network placement in return for the promise of discounts on what Google considers to be low-quality clicks.

With Smart Select: An advertiser would choose a minimum "quality tier" (e.g., a percentile tier based on Smart Pricing conversion data), and ads would run only on sites that exceeded that minimum. Pricing would be tied to the quality tier chosen by the advertiser.

Another option would be a sliding-scale winnowing system, a.k.a. "Smart Pricing Select":

Smart Select wouldn't necessarily have to be configured as I've described it (e.g., as a group of percentile "tiers"). It could just as well be configured with a sliding scale--let's steal a word from Martinibuster and call it an "optimization filter" that would let advertisers choose the level of performance and Smart Pricing discount by with a slider control. For discussion's sake, we'll call this "Smart Pricing Select." You'd have:

(lowest performance / biggest discount ) 1 2 3 4 5 6 7 8 9 10 (highest performance / no discount).

With "Smart Pricing Select," an advertiser would have greater control over both audience quality and price--and by testing Smart Pricing Select at different discount/filtration levels, the advertiser would be able to find the level with the optimum ROI.

To read the full discussion, see:

[webmasterworld.com...]

10:06 pm on Jan 14, 2007 (gmt 0)

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I'm beginning to be convinced that my CPM declines over the last 8 weeks or so directly related to MFA saturation in my subject.

Each day is a new low CPM.

I was poking around in G search, searching for my domain along with some keywords.

I stumbled upon listing after listing of MFA sites that take the first sentence or two from websites and display them as fake search results.

Nothing new here except that there are 836 of them with my domain name along with the specific keyword phrase (from one page on my site).

I can only guess at how many 10s of thousands there are just like these in my little niche alone.

They've got some of the same advertisers as I have so there ya go... saturation...

Besides that their CTR is likely double or triple mine since they cover the top of the page with G ads with titles like 'Your Search Results' just above the ad block....
And, 'Suggested Links' just above the Adlinks block.

And silly me - i've been moving ads out of the way so as to be more on the up and up with adsense with a predicted decrease in ctr.

Maybe I should switch back to the Britney Spears (ads in your face) approach.

PS No wonder YPN is starting to look better for CPM. I don't think they are plagued with this problem. If they could ever get their targeting right then I'll be happier

[edited by: sailorjwd at 10:17 pm (utc) on Jan. 14, 2007]

10:14 pm on Jan 14, 2007 (gmt 0)

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They've got some of the same advertisers as I have so there ya go... saturation...

True, if they're getting enough traffic to impressions and clicks.

When I'm searching, I generally find scrapers and other obvious MFAs mostly on esoteric, multi-word "long-tail" searches where there's little competition for search rankings. Is it possible that publishers who rely heavily on traffic from such keywords or keyphrases are subject to more "dilution" than publishers who get a lot of traffic from mainstream searches where MFAs don't rank so well?

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