Forum Moderators: martinibuster
I saw this twice in the past on another websites.
Does Adsense cheat?
Does anyone saw that too?
Other factors may play a role, too, but if AdSense were "cheating," why would some publishers be reporting increases in EPC, eCPM, and/or earnings?
Does anyone saw that too?
I'm wondering about that also. My traffic is up also and my Adsense clicks and revenue are way down.
Traffic alone doesn't translate into value for advertisers or revenue for publishers. Case in point: MySpace has huge traffic, but its average CPM has been terrible, because advertisers know that its users are likely to be kids who are focused on their own MySpace profiles and on social networking.
If you mean do they change payout percentage to suit their own convenience? They probably do. But then they never agreed to pay you a fixed percentage. You may not like this advice but the deal with them always was that they'd pay you whatever they wanted to and increase it and decrease it at their sole discretion and your only option is to leave if you don't like it.
Do they bait and switch i.e., pay high initially to get you to commit Adsense to your entire site and then slowly drop pay-outs? It's possible those drops are caused by smartpricing/advertiser variables, but it could also be caused by Google. Sure. They did not promise you anything different so don't expect it. Sorry.
If you mean do they change payout percentage to suit their own convenience? They probably do.
Yes, but if they do, they're raising someone else's percentage when they're lowering yours, because the percentage paid to publishers overall is remarkably constant from quarter to quarter. (See Google's quarterly earnings reports.)
The idea that Google might have a variable payout formula makes a lot of sense, because such flexibility would achieve at least two objectives:
1) It would make it harder for other ad networks to cherrypick AdSense publishers with better offers (since they wouldn't know who's getting what percntage from Google), and...
2) It would allow Google to have a positive influence on the Web by skewing monies toward publishers who are considered desirable for various reasons (e.g., value to advertisers, to Google Search users, and to the Web in general).
Still, this may be irrelevant to the OP's complaint, which could just as easily be the result of traffic growth outstripping the availability of high-paying ads. (That's the simplest explanation, so why make things complicated unless there's evidence to support a more elaborate hypothetical scenario?)
To find this yourself first start at
[sec.gov...] then go to:
The company search link
[sec.gov...]
Then search for "Google" and typically you would want to see form "10". You may have to hunt around a little bit!
Once you've found the document look at:
"Traffic acquisition costs", that would be you!
Costs and ExpensesCost of Revenues. Cost of revenues consists primarily of traffic acquisition costs. Traffic acquisition costs consist of amounts ultimately paid to our Google Network members under AdSense arrangements and to certain other partners (our “distribution partners”) who distribute our toolbar and other products (collectively referred to as “access points”) or otherwise direct search queries to our web site (collectively referred to as “distribution arrangements”).
And if you want to talk about specifics how bout a hyperlink to your topic. I think Webmaster World would allow links to Google's financial statement at the Securities and Exchange Commission.
The SEC will be thrilled with the huge flood of traffic from WW!
What would be really great is a table showing these Adsense stats back to 2003 when it all started!
What would be really great is a table showing these Adsense stats back to 2003 when it all started!
Google Investor Relations has a table of data from quarterly earnings reports (including traffic acquisition costs) at:
[investor.google.com...]
Press releases and recorded conference calls are available at:
[investor.google.com...]
The numbers go back to 2004, since that's when Google went public and began filing quarterly earnings reports with the SEC.
They had a 5% change (lower) in cost on about 50% of their revenue through the network which is about $150 million less than what they would have paid out had the percentage stayed the same as last year. The only way that could happen is if they had a decrease in percentage paid out to the AdSense folks so smart pricing has worked very well for them. To be able to increase the distribution network and decrease the costs by that amount of money is a very good thing for Google.
I find this from the 10Q interesting as well:
Improvements in our ability to monetize this increased traffic primarily relate to providing our end users with ads that are more relevant to their search queries or to the content on the Google Network members’ sites they visit. These improvements have included, for instance, reducing the number of ads on non-commercial search queries while increasing the number of ads on commercial search queries.
That tells me that if you run a site that Google considers to be commercial rather than recreational or informational etc. then you will most likely get better ads through AdSense.
So smart pricing may not be related to the quality of a site like most people think. In other words a crappy commercial site may be less likely to be smart priced than a very good informational site.
Is it cheating? Nope. Is it good business for them? Yep.
The question on my mind now is what does Google consider to be commercial?
JAG
My traffic is up also and my Adsense clicks and revenue are way down.
Welcome to adsense! Keep working harder and let Google keep taking a bigger chunk! Eventually you'll be making 2 cents a click, but will take that over nothing.
he only way that could happen is if they had a decrease in percentage paid out to the AdSense folks so smart pricing has worked very well for them.
First, I really don't care about how much money google pays out to ALL it's partners in total. That has NO value or relevance in terms of what I or you get. The pot can stay the same and you (or I) can make a lot more money, or a lot less. It's irrelevant.
Second, unless google is outright lying, smart pricing doesn't work the way you think it does. It reduces the amount of money you receive, BY LOWERING THE AMOUNT OF MONEY THE ADVERTISER RECEIVES.
If anything it LOWERS google revenues.
Let's face it. NONE of us know how it all works, and we aren't going to know. We don't know how the choose ads for sites, how they pay in terms of percentage, how smart pricing works on a micro level, etc.
First, I really don't care about how much money google pays out to ALL it's partners in total. That has NO value or relevance in terms of what I or you get. The pot can stay the same and you (or I) can make a lot more money, or a lot less. It's irrelevant.
I know, I know, it's irrelevant until it happens to someone.
Second, unless google is outright lying, smart pricing doesn't work the way you think it does.
I don't think Google is lying about anything. It's right in the 10Q.
It reduces the amount of money you receive, BY LOWERING THE AMOUNT OF MONEY THE ADVERTISER RECEIVES.
You mean spends?
If anything it LOWERS google revenues.
Not exactly. Google can lower the advertisers spend on a low quality site by say 10 percent but then lower the payout by maybe 50 percent so Google still makes more net revenue.
Let's face it. NONE of us know how it all works, and we aren't going to know. We don't know how the choose ads for sites, how they pay in terms of percentage, how smart pricing works on a micro level, etc.
Right. So we should just stop talking about it then?
JAG
The only way that could happen is if they had a decrease in percentage paid out to the AdSense folks so smart pricing has worked very well for them.
Smart pricing and payout percentage are two different things. Google makes less on smart-priced ads, because advertisers are paying less for those ads. Or so Google tells us at:
[adsense.blogspot.com...]
These improvements have included, for instance, reducing the number of ads on non-commercial search queries while increasing the number of ads on commercial search queries.That tells me that if you run a site that Google considers to be commercial rather than recreational or informational etc. then you will most likely get better ads through AdSense.
The statement quoted above is talking about informational vs. commercial search queries, not informational vs. commercial sites. So unless you've got a site that receives a lot of AdSense for Search queries, you're unlikely to be affected. (And even then, the number of ads being displayed will be governed by the same formula used for Google's own SERPs, which presumably is designed to maximize revenue while maintaining a positive user experience.)
Side note: As I suggested earlier, Google may well have a sliding scale or other payout formula that varies with the nature of the site, the site's history, the amount of revenue, a quality score, etc. In fact, it would be stupid of Google to have a flat, across-the-board payout percentage that competitors could figure out. That doesn't mean Google is cheating if you get less for the same ads and the same traffic than Bob and Bobbi do, however. It just means that Google values Bob and Bobbi more than it does you (for reasons that only Google knows).
Google makes less on smart-priced ads, because advertisers are paying less for those ads.
They don't specify if that is gross or net? If it is net then I am wrong. If it is gross then I may be right.
While it does say for search queries they use that as an instance and don't specify what else is being done although the content networks is noted in the same paragraph.
It makes perfect sense to me though. As an advertiser I really don't want my ads showing up on sites where someone is not likely to make a purchase when they click my ad. If Google can make that determination for me beforehand than I'm much happier about it as the click is more likely to convert. I think it's a wonderful thing if they can do that. Someone who is running AdSense may not think so though.
JAG
While it does say for search queries they use that as an instance and don't specify what else is being done although the content networks is noted in the same paragraph.
Just because they mention apples in a paragraph about oranges doesn't mean apples = oranges.
And smart pricing is all about the likelihood of conversion (which isn't necessarily the same as a "purchase," by the way--a lead can be worth a lot more than an e-commerce transaction, and Google has made it clear in the past that a conversion can be a "business action," not just an immediate sale).
Just because they mention apples in a paragraph about oranges doesn't mean apples = oranges.
Right. It is not the same. That's why I said they don't specify what else is being done. That's the part that is missing from the 10Q.
And smart pricing is all about the likelihood of conversion (which isn't necessarily the same as a "purchase," by the way--a lead can be worth a lot more than an e-commerce transaction, and Google has made it clear in the past that a conversion can be a "business action," not just an immediate sale).
Right again. That's why I said I think it a wonderful thing if they can predict a purchase...oops...conversion...oops...business action.
Personally I think very little of Google (on the product side of the house) given the amount of talent they have there but I think they are very good at monetizing what they have which is why I'm giving them kudos today. Not something I do very often :-)
JAG
It would make sense for Google to pass some of the costs for serving the ads to the publishers. They already mention this in the AdSense for Search TOS.
Why shouldn't they pay more to better converting publishers? It costs them less to serve the ads per conversion.
There are many more reasonable reasons for decreased EPC/CTR & CPM.
EFV and others have noted them above.
Compared to last year my CTR=1/3, CPM=1/8, EPC=1/3, visitors down only 60% now.
Here is why:
About 90% of my visitors are informational visitors, meaning they are trying to learn how to do something (programming).
The only way I get informational visitors now is by pure search results. I can no longer advertise for them (at a reasonable price) on Adwords - nor can anyone else. (Even that professor guy that makes videos has a hard time) So many advertisers are no longer advertising on Search and likely not on content either because it isn't worth it and it is harder to track.
Combined the above niche example with the general explosion of low-quality sites and you get a tremendous dilution of advertisements additionally contributing to lower EPCs. I see hundreds of low quality sites in 3rd world countries in my logs - there an extra $3.00 a day can make a difference.
The new Adsense TOS may help us but only if G enforces the TOS. I'm not optimistic since they haven't inforced it much to date.
We all would be much more productive (me included) if we would resist the inital temptation to think Google is cheating
That's why I am defending Google in this case. They are NOT cheating. They're just doing business.
or cutting our percentage of the take.
Even though they do indeed do this...you cannot have a decrease in expenses in an ever expanding network without doing it...it is still NOT cheating.
JAG
Even though they do indeed do this
Total TAC declined one percentage point (from 32 to 31 percent) between Q2 and Q3 2006, but we don't know how much of the decline was due to a change in payments to distribution partners (which were broken out in the Q3 report but not in the Q2 report). Also, upfront cash advances or other special arrangements with large partners could affect the numbers from one quarter to the next--or maybe not; again, we just don't know.
In any case, even if Google had increased its share of the take by a modest percentage, that wouldn't account for the OP's substantial decline or for the big revenue drops that some other members have reported. If Google were chopping payout substantially across the board, we'd see evidence of that in the quarterly earnings reports. (The 4Q 2006 numbers will be announced at the end of January, in case anyone is interested.)
Also, upfront cash advances or other special arrangements with large partners could affect the numbers from one quarter to the next--or maybe not; again, we just don't know.
Or, if the percentage of AdSense income coming from the general content network instead of those 100% partners increases, that could account for a slight increase in Google's share.
If Google were chopping payout substantially across the board, we'd see evidence of that in the quarterly earnings reports.
Bingo! And they aren't going to go out of their way to screw with the big sites that are better able to earn through other channels.
The problem is that it is easier to blame Google for the fluctuations. People would rather take the first easy solution that pops into their head, than question their own assumptions and try to figure out what is really happening.
Total TAC declined one percentage point (from 32 to 31 percent) between Q2 and Q3 2006, but we don't know how much of the decline was due to a change in payments to distribution partners
Ahh. You're looking at the investor relations financial data. I was looking at the 10Q for the past 9 months compared to same 9 months previous which shows the 5% less acquisition costs.
The high was 39% TAC in 2004 and it has steadily decreased to 31% 2 years later so the decline of 8% is much bigger than I gave them credit for. It also means that any anomolies such as special payment arrangements have probably been leveled out during that time.
Is it evidence of chopping payment across the board? Heck no. It is only evidence that there is a chop somewhere in payouts. Some will see it and some won't. I believe the 10Q when they say certain improvements in the monetization of increased traffic. I don't think for for one minute that they are not telling the truth. If they were not telling the truth then I'd say you may be right and they may be cooking the books somehow. To say the savings in TAC is from not from improvements in monetization, as they say, is the same as saying they lied about it.
JAG
It is only evidence that there is a chop somewhere in payouts.
No, it is only evidence that it is exactly what they say about "certain improvements". Everything beyond that is speculation on your part.
For example, if they did not sign any new partners at the 100% level because they no longer need the volume provided, yet they continued to sign sites at the 60% rate. That is a way for them to increase their percentage without making any cuts in payout.
Hell, it could even mean that reduced the cost of serving the ads. You did notice that they talked of monetization of *increased* traffic, didn't you?
What you are suggesting is *possible*, but it is far from conclusive evidence. It would not even count as circumstantial evidence.
Always question your own assumptions.
But we do know that . . . it was better in the old days . . . .
Always question your own assumptions.
True. I assumed Google wasn't cheating as the thread suggests and they just had good business sense and were able to increase their profit margins across the board.
I also assumed a decrease in payouts people have seen from Google was actually...drum roll please...from Google decreasing payouts. What was I thinking? Must have been a clerical error.
I'll go back to Google is evil...I like that side of the fence better anyway :-)
JAG
I also assumed a decrease in payouts people have seen from Google was actually...drum roll please...from Google decreasing payouts. What was I thinking?
Well, you apparently weren't thinking about the publishers who have reported increases in EPC, eCPM, and/or revenues. :-)
Well, you apparently weren't thinking about the publishers who have reported increases in EPC, eCPM, and/or revenues. :-)
I was. I was just assuming it wasn't exactly equal.
I assumed that while one site might see a decrease of a penny a click it didn't mean that the penny would automatically be given to one other site.
I assumed it was more like 1 penny a click taken away from 100 sites might be 1 penny more a click given to 92 other sites which in my mind could explain why not everyone sees the same thing and also explain the 8 percent decrease in expense from 2004.
JAG
While Google *might* be taking a larger percentage of some clicks, you suggest that there was "evidence", which was false.
The vast majority of people seeing lower payouts are explained by things mentioned early in this thread. To suggest that google is taking some away from some sites, giving it to other, and pocketing a few pennies in the bargain is just garbage.
