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The inefficiency of Adsense

You're losing money

         

Small Website Guy

2:44 am on Aug 18, 2004 (gmt 0)

10+ Year Member



So you have Adsense and some other website is willing to pay $2/click to get people to take a look. 5% of your visitors click on Adsense, and you get paid $1/click. So you make $1/40 visitors.

$1 is $1, but besides the fact that someone else thinks your visitor is worth $2, imagine if the 95% who didn't click on the Adsense ad are also worth $2? You potentially have $40 worth of traffic on your website and you're settling for a mere $1.

The way to get rich is not through Adsense, but by selling the same product or service that the advertisers are selling.

wonderboy

2:48 am on Aug 18, 2004 (gmt 0)

10+ Year Member



Some sites are not about selling though, some people own sites that are not business orientated, simply hobbies, and the money from Adsense helps keep it running / gives some pocket money.

W.

deejay

2:50 am on Aug 18, 2004 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



:) but.. that's the same way to a stomach ulcer for many of us.

There are a million reasons people don't want to become a retailer - lower stress being a major one among them, not to mention inventory costs, staff, overheads, etc.

At the end of the day it's not necessarily all about the money.

conroy

2:51 am on Aug 18, 2004 (gmt 0)

10+ Year Member



The way to get rich is not through Adsense, but by selling the same product or service that the advertisers are selling.

But then you have customer service, complaints, you have to ship things, you need a merchant account etc.

And the most important part - running that one business will prevent you from running many others. With adsense, you can run hundreds of sites. In general, once sites are self sustaining they never stop producing income whether you work on them or not.

I agree that if you want to make hundreds of millions a year or something that adsense isn't the way to go. But most people are happy with a little less than that.

diamondgrl

3:07 am on Aug 18, 2004 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



I was convinced by Small Website Guy.

I've decided to sell Cisco routers rather than just advertise for them. In fact, it's really inefficient to have to pay a middleman and Cisco to get these routers, so I've decided to make them as well. So I've hired a bunch of engineers and created factories. It seemed silly that someone was making the microchips for the routers, so I decided to go into the chip fabrication business.

Sure, I'm out about $50 billion, but I think it's worth it to cut out the waste.

Chris_R

3:10 am on Aug 18, 2004 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



There are also lots of people that are paying google more than what they are worth for their traffic - some even knowingly - for branding and the like.

And some people traffic here doesn't convert. You have to take that risk if you go off of adsense. I had the same problem with affiliate traffic. Should I open up my own comany and do the same thing. I never did and never would want to. I don't want the extra employees and extra hassle. As an affiliate - or adsense publisher - it is possible to have net profit margins of 90+% before taxes. This is true for almost no other business out there.

asp4bunnies

3:54 am on Aug 18, 2004 (gmt 0)

10+ Year Member



I was convinced by Small Website Guy.
Sure, I'm out about $50 billion, but I think it's worth it to cut out the waste.

You summed up my witty reply better than I ever could, so I won't. :)

Visit Thailand

5:28 am on Aug 18, 2004 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



The beauty with AdSense is immediate and diverse, targetted advertising that would be next to impossible for many sites to acheive even through direct advertising sales.

Plus with some sites getting such an enormous range of ads it would also be impossible to directly sell many of the products advertised.

dhaliwal

5:32 am on Aug 18, 2004 (gmt 0)

10+ Year Member



Diamondgrrrl,
you are more intelligent than i thought of you.
you summed up the things quite intelligently

ChrisKud5

5:44 am on Aug 18, 2004 (gmt 0)

10+ Year Member



Sure, I'm out about $50 billion, but I think it's worth it to cut out the waste.

If we want to get technical, any money you spent on PP&E (propery plant equipment) would all be assets on the balance sheet, so you are really not "out" anything at all. They are investments, not expenses. You would not expense all the depreciation at once.

europeforvisitors

6:11 am on Aug 18, 2004 (gmt 0)



The way to get rich is not through Adsense, but by selling the same product or service that the advertisers are selling.

Somehow I can't see The New York Times or the Washington Post selling widgets, impotence drugs, or hotel bookings. :-)

dmedia

9:19 am on Aug 18, 2004 (gmt 0)

10+ Year Member



Golly .. can't believe nobody's mentioned the obvious.

How to get rich with Adsense? - That would be writing/selling the ebook "How to Get Rich with Adsense"

The sequel could be the book "Get rich by losing money on every sale, but make it up in volume"

PCInk

11:43 am on Aug 18, 2004 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member Top Contributors Of The Month



> The way to get rich is not through Adsense, but by selling the same product or service that the advertisers are selling.

And then you need to consider all of the above (customer services, mailing, merchant account etc...) but you also need to quit your day job and do it full-time. Running an ecommerce site is not generally a couple of hours on an evening job. AdSense can be a couple of hours on an evening plus your day job.

And with AdSense, you don't ship out $4000 worth of goods and then get a chargeback one week later. You take little of the risk, give little of the investment and can probably do less work running an AdSense site. But then you are probably correct: you earn less money.

Small Website Guy

10:38 pm on Aug 18, 2004 (gmt 0)

10+ Year Member



I was just thinking that a site I have with Adsense and some affiliate links makes a few hundred a month, but if I multiplied that by 40 then I'd be me making some serious money.

conroy

11:04 pm on Aug 18, 2004 (gmt 0)

10+ Year Member



You are absolutely right on that part. It is just that many of us choose to create 40 more affiliate sites to reach that big money, instead of being a retailer :)

Small Website Guy

2:13 am on Aug 20, 2004 (gmt 0)

10+ Year Member



many of us choose to create 40 more affiliate sites to reach that big money

But can you really feel GOOD about yourself making your money this way? You're just gaming the system and not contributing to society.

And I dont think it was so easy to get to having one site that makes $500 a month. (And it's really aggravating because it could make so much more if it moved up in the SERPs, but I just don't have what it takes to spend hours a day trolling for links.)

richmondsteve

3:08 am on Aug 20, 2004 (gmt 0)

10+ Year Member



Small Website Guy wrote:
5% of your visitors click on Adsense, and you get paid $1/click. So you make $1/40 visitors.

Check your math. $1 per 20 visitors.

imagine if the 95% who didn't click on the Adsense ad are also worth $2?

I can imagine it and it makes me warm and fuzzy, but it seems totally unreasonable. The merchant is most likely willing to pay $2 per lead at least partially based on an expected/historical conversion rate for leads from content publishers. Assuming I begin selling the product or service myself on my site *and* traffic continues to come from the same channels, why would I have any reason to think my conversion rate would be significantly different than that of the merchant I was promoting? Am I missing something?

You potentially have $40 worth of traffic on your website and you're settling for a mere $1.

"Potentially" is a very flexible word. ;-)

PatrickDeese

3:21 am on Aug 20, 2004 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



> But can you really feel GOOD about yourself making your money this way? You're just gaming the system and not contributing to society.

I feel just fine about it.

I am not "gaming" any system. I own content-rich sites and I am using the adsense program (among others) to monetize my traffic.

If someone comes from the search engines using the term "antique apple polishers" and I have a page on antique apple polishers - the visitor is happy - and if they happen to click on an adsense advert for "apple polishing supplies" - hey - everyone is happy - right?

MrAnchovy

4:02 am on Aug 20, 2004 (gmt 0)

10+ Year Member



But can you really feel GOOD about yourself making your money this way? You're just gaming the system and not contributing to society.

What about Google itself? Why don't they just sell the products instead of taking ads for those products? I suppose they are really gaming the system.

blue_eagle

6:16 am on Aug 20, 2004 (gmt 0)

10+ Year Member



And when adsense kick you out you are there with your 40 useless sites right? They are only useful for adsense believe me.. When you wake up one morning and see a disabled account email you will notice that they are really useless.

Who can guarantee that your account is not going to be cancelled tomorrow? If you are a retailer you have bunch of places to advertise and you have a stayable business and on top of that you have a peace of mind.
But if you are a publisher you will get anxiety to get your disabled account email anytime since there are many reasons for google to cancel your account.

Soo, I am not happy with Adsense? I believe that I am happier than many people in here. However, living with anxiety is not good at all. Therefore, I am creating my own services to not have a heard attack with a disabled account email..

grandpa

6:30 am on Aug 20, 2004 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member Top Contributors Of The Month



Therefore, I am creating my own services to not have a heard attack with a disabled account email..

Yeah, we do that here. It's been so freaking hot working out here where I work, and there's so much to do, I haven't taken the time yet to roll thru 500 junk messages looking for that one disabled account message.

On the other hand, I created a site late last year that is just hopping, and I'm using it to learn how to monetize it. AdSense, affiliates, whatever it takes! The couple of hours in the cool evening air I've spent so far are showing good results.

europeforvisitors

7:03 am on Aug 20, 2004 (gmt 0)



But if you are a publisher you will get anxiety to get your disabled account email anytime since there are many reasons for google to cancel your account.

Not if you have multiple revenue streams. On my own editorial site, for example, I earn revenues from more than half a dozen affiliate programs that are related to my topic. If one revenue stream dries up, the other ones are likely to be intact--and new ones are likely to come along.

There are other benefits to publishing an information or editorial site with evergreen (as opposed to time-sensitive) content:

1) The pages earn money day after day, month after month, and even year after year if they're kept up to date.

2) Each new page represents incremental traffic and income.

Still, in the final analysis, what you're best at is what works best. If you come from an editorial and publishing background, you're probably going to be most successful with a content site. If your skills are on the retail or SEO side, an e-commerce or affiliate site is likely to be more rewarding financially and otherwise.

blue_eagle

7:53 am on Aug 20, 2004 (gmt 0)

10+ Year Member



EFV,

Sorry for misunderstanding, I meant Adsense publisher as publisher. Of course a succesful publisher with "up to date" and "quality" content would always make money.

Larryhat

10:14 am on Aug 20, 2004 (gmt 0)

10+ Year Member



Hello all: May I jump in with an Adsense question?

I have no advertising on my site at all, just 130 pages of well researched UFO maps and the like. My main (index) page sees 400-600 hits a day. I'm usually on page 2 or 3 of Google serps for my one-word keyword, low on page one for a two word KW.

Questions:

Must I put Adsense on the index page, or can I stick it on 2nd level pages?

How much revenue could I possibly expect from Adsense, given these smallish numbers? If its $37 per month, its just not worth it.

- Larry

Small Website Guy

10:51 am on Aug 20, 2004 (gmt 0)

10+ Year Member



What about Google itself? Why don't they just sell the products instead of taking ads for those products? I suppose they are really gaming the system.

Now that GOOG is a public company that has to show Wall Street that they are worth their sky high PE ratio, don't be surprised when they try to find more and more ways to make money.

Yahoo! has not had a problem with using its brand name to sell services like web hosting, online personals, etc.

When you go to Google one day to search for "web hosting" and find a huge prominent link to hosting.google.com, I am going to post a big "I told you so" message here.

richmondsteve

10:52 am on Aug 20, 2004 (gmt 0)

10+ Year Member



Larryhat wrote:
Hello all: May I jump in with an Adsense question?

I'll answer, but you really should have started a new thread instead of changing the topic in this thread.

Must I put Adsense on the index page, or can I stick it on 2nd level pages?

You don't need to put it on your main page; you can chose which pages to put it on.

How much revenue could I possibly expect from Adsense, given these smallish numbers? If its $37 per month, its just not worth it.

Somewhere between $36 and $38 most likely. ;-) There are too many variables to answer your question. I don't know what type of supply of ads there are for your content or what they pay, but if you want to know, why not test it on a few pages and then extrapolate to estimate?

Larryhat

11:12 am on Aug 20, 2004 (gmt 0)

10+ Year Member



Hello Richmond:

Yes, a new thread would be better. However, I tried that several times in the past, and they never appear.

As for likely income, I meant in very general terms. With a popular non-commercial "UFO" site, say 500 unique visitors a day, adsense on the entry page, are we talking ones, tens or hundreds of dollars per month?

Most UFO-related retailers (tapes, CDs, knick-knacks) have their own sites and do not pay for advertising.

Just what does Google pay per click? Are there any benchmarks, norms or averages at all?

- Larry

killroy

11:32 am on Aug 20, 2004 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Well, (to get back to the original thread), AdSense got me originally started on the whole money-off-the-net idea. Before that it was strictly offline income. Now AdSense is only about 15% of the total income, but it got me started and showed me the way (invaluable!). Now I make alone about 5 times what the whole company of 5 people did before. I spend it all on feeding and helping out friends and family, but at least it's not me being helped out any longer.

If google cuts me off today? Their loss. It'll take me one afternoon to plonk some nice aff links in the space and make up the income. AdSense isn't terribly efficient, but it sure is quick and easy to set up. Personally, I'm a big fan of pay for performance (sales!) as it's the guaranteed value-for-money, win-win deal!

SN

europeforvisitors

4:03 pm on Aug 20, 2004 (gmt 0)



Personally, I'm a big fan of pay for performance (sales!) as it's the guaranteed value-for-money, win-win deal!

I'm a big fan of covering my bets by profiting from AdSense and affiliate sales. :-)

In any case, affiliate sales aren't going to work on every page--at least not on an editorially diverse content site. AdSense can "fill in the gaps" by monetizing pages that are valuable to users but don't relate to a site's affiliate programs.

Example: I have a travel-planning site, and I occasionally write in-depth reviews of cruises within the geographic area that I cover. Until AdSense came along, such articles were loss leaders, because most cruisers book through travel agencies and have no use for the hotels, car rentals, rail passes, etc. that are offered through affiliate links on my site. With AdSense, I can earn revenue from those articles, because the pages carry pay-per-click ads that, when matching works correctly, relate directly to the page content.

Bottom line: AdSense represents incremental income or "icing on the cake" for an editorially diverse site like mine.