Forum Moderators: martinibuster
Is this common practice, or is the percentage that Google gets something that is negotiable?
How I understood it is you aren't allowed to disclose how much Google is getting, but you could still negotiate Google's cut with Google, are these assumptions wrong?
Another complicating factor is "smart pricing." If your traffic doesn't convert well, advertisers are likely to receive "smart pricing" discounts off their nominal bids, which means that (for example) a 5-cent click might go for 1 or 2 cents in some cases. When that happens, both the publisher and Google earn less money per click because, in Google's estimation, the click isn't worth full retail.
ADDENDUM: A "premium publisher" is a publisher that has enough traffic to merit special treatment; Google suggests asking about premium-publisher status if you're getting 20 million or more page views per month.
Overall, "AdSense partners" get about 78.5% of the take, with Google keeping 21.5%.
Hmm.. looking at [webmasterworld.com...] and reading the Forbes news article it seems like Google keeps a lot more than that.
Revenue for the period totaled $3.87 billion, a 58 percent increase from $2.46 billion at the same time last year.After subtracting commissions paid to its advertising partners, Google's revenue was $2.72 billion...
but....maybe I'm wrong and they made billions from the Google Search Appliance and not AdWords revenue.
[edited by: The_Contractor at 3:13 pm (utc) on Aug. 2, 2007]
Again, that doesn't mean that every publisher gets 78.5%, or even that most publishers get 78.5%. And in any case, if the OP's traffic converts poorly (see the first post in this thread), smart pricing is likely to be a bigger concern than payout percentage is.
As EFV pointed out, Google does announce an average split in their earnings reports, but this is highly irrelevant because it is unknown who receives how much. Some here (including me) believe that smaller publishers receive a lot less than the average value mentioned by EFV (with the premium publishers receiving possibly way above average, maybe even 100%). But as there is no official information available, nobody (yes, not even EFV) can tell how the money is distributed among the publisher base.
This is a question that comes up every now and then, so I'll drop out of the debate that may (or may not) come now.
As EFV pointed out, Google does announce an average split in their earnings reports, but this is highly irrelevant because it is unknown who receives how much.
"Highly irrelevant"? Are you suggesting that, if the average AdSense partner share dropped from 78.5% to 50% or 25%%, that wouldn't matter because no one knows exactly what percentage is received by you, me, or the guy down the block?
Revenue for the period totaled $3.87 billion, a 58 percent increase from $2.46 billion at the same time last year.
After subtracting commissions paid to its advertising partners, Google's revenue was $2.72 billion...but....maybe I'm wrong and they made billions from the Google Search Appliance and not AdWords revenue.
Every person gets the same deal with google, the same percentages.
We don't share the actual numbers for competative reasons.
CNN and other huge vendors get to negotiate, but they then have to very specifically place ads in certain spots for a certain amount of time.
The fact that Google doesn't tell Adsense publishers how much Google takes is mind boggling to me. Basically it means, that Google could change how much they take on a day to day basis, some days they could take 90% while other they could take 10%. I don't see any system in place to stop them from taking as much as they want. Publishers have no idea what Google takes, besides the aggrigated data that Google releases.
To me it seems wierd that Adsense would have so many publishers under this agreement which gives Google absolute control.
...one of my websites that gets lots of traffic from Organic results, but most of the traffic doesn't convert into sales.
and later...
Basically it means, that Google could change how much they take on a day to day basis, some days they could take 90% while other they could take 10%. I don't see any system in place to stop them from taking as much as they want. Publishers have no idea what Google takes, besides the aggrigated data that Google releases.
When I was last employed I worked for a privately owned company that had several hundred employees. Neither I nor the other employees knew how much money the owner put in his pocket after each project. Yet he was able to have several hundred employees work under those conditions and always seemed to have a stack of resumes of other people wanting jobs at that company.
I was pleased at the amount of compensation he paid me based on my experience, effort, time, etc. It was more than I could find elsewhere for the same time, effort, etc.
If there was another job that would have paid me more for the same time, effort, experience, etc., I would have switched employers.
If I had of sat around trying to figure out how much the owner was making compared to how much I was making, I would have been discontent.
The same thing applies to AdSense. You said most of your traffic doesn't convert to sales. If you can earn more with AdSense, which has an easy implementation, you're better off than what you have now.
If you can find something better than AdSense for your site, that's where you should go.
It's natural to wonder how much you can earn with AdSense, but I think the AdSense rep gave you good advice. Focus on how much you're earning, not on how much someone else (Google) is earning.
Even if the AdSense rep gave you a firm figure like 90% (hypothetical) that really wouldn't tell you much because there are many factors that have an impact on how much you earn.
You can learn a lot to increase your income by reading prior threads on this forum.
FarmBoy
To me it seems wierd that Adsense would have so many publishers under this agreement which gives Google absolute control.
I agree. The most important reason for this is the fact that there is virtually NO competition.
YPN is not only not accepting publishers who are not from the U.S., but they are asking also to show the ads to only U.S. visitors.
An MSN Adcenter? It's not ripe yet to accept publishers and advertisers from all around the world. The second MSN Adcenter is there, Microsoft will hopefully be able to open their deep pockets and smooth out in-effiencies of the market in the start-up phase (i.e. too few publishers or too few advertisers).
If Adsense is run in the future the way it is run now, I think better, smarter, more transparent ad services will replace Adsense.
The fact that Google doesn't tell Adsense publishers how much Google takes is mind boggling to me.
It makes perfect sense, because it means competitors can't cherry-pick the AdSense network by offering better percentages to especially desirable publishers.
I don't see any system in place to stop them from taking as much as they want.
I do. It's called the marketplace. If Google were to suck up an increasing share of the revenues, that would become apparent in both the quarterly earnings reports and individual publishers' earnings. It wouldn't be long until publishers with intrinsically valuable screen real estate would use their ad space in other ways, and Google's content network would be left with made-for-AdSense sites and other low-performing ad venues.
According to Google's 2Q 2007 earnings report, revenues generated by partners though AdSense programs totaled $1.35 billion, while the amounts paid to AdSense partners totaled $1.06 billion. Do the math, and you get a 78.5% payout.
Does it specifically say that the amount is paid to AdSense partners? Google might also factor in certain expenses, like rents, employee salaries, etc. If so, the actual payments could be a little lower than 78.5%.
At work I set up an affiliate program through LinkShare. Then I signed up with LinkShare as an affiliate to see what it looked like from the other side. I found that LinkShare is paying 70%. So if Google is paying 78.5% that's a little higher, but still in the same ballpark.
Everyone can know what the percentage is now.
I know exactly what my percentage is and you can to.
Be nice and I'll tell you (how).
Even though I can't see it, I really like your shirt. And some day, I'll make you some chocolate cookies with vanilla frosting. Now can you pleeeeeeease tell us?
:D
You somehow discover AdSense is keeping X% of the revenue and you think X is way too low.
Are you going to stop promoting AdSense and forgo the $5,000 monthly checks?
FarmBoy
Does it specifically say that the amount is paid to AdSense partners?
Yes.
Are you going to stop promoting AdSense and forgo the $5,000 monthly checks?
I delayed signing up with AdSense when it first started because I thought the contract was too one sided.
Having tried a couple other options, I no longer really care.
We simply did control testing where we matched the click cost of the advertiser to clicks we generated with publishers which gave us the percentage. We were always below the average that Google publishes.
So the median is lower than the average and I'm guessing the reason that the average is higher than the median is because of the large publishers with sweet deals.
For example:
Let's suppose there were 3 publishers and p1 got 90% of $100.00 and p2 got 20% of $10.00 and p3 got 10% of $10.00. The more money the better the deal meaning a negotiated deal isn't going to generate a few dollars in clicks but the average guy with a small site will which is why I used the numbers I did. So...the numbers would then be:
Median - 20%
Average based on dollar amount - (($93.00/$120.00)*100) = 77.5%
Boost the gross earnings of p1 to 2x and the average goes up about 10 points but the median stays the same. Remove p3 and the median goes way up and the percentage goes up but the median still fails way shy of the average.
So both numbers are accurate but it is in the best interest of Google to give broad numbers where the average is the only thing to go by unless you control the numbers through testing.
So test if you want to know the numbers but it's been my experience you'll be happier with the overall average than what your real average number will be. If your happy making a few hundred bucks a month...then leave it at that...it won't do much good to know your average might be 40% to get the money your getting. You can't negotiate a better deal if you don't generate the big bucks!
JAG
The fact that Google doesn't tell Adsense publishers how much Google takes is mind boggling to me....To me it seems wierd that Adsense would have so many publishers under this agreement which gives Google absolute control.
This feels "odd" because it is an anomaly -- which is directly related to Google's unusual market power.
If the ad market were fully competitive, publishers would choose which ad network/broker to work with partly on the basis of which firms offered them the highest revenue share -- which would be indicator of which firm offers the best "deal."
The major benefit of not disclosing detailed percentages to individual publishers is that it makes it harder for other ad brokers/networks to penetrate the market.
If the ad market were fully competitive, publishers would choose which ad network/broker to work with partly on the basis of which firms offered them the highest revenue share -- which would be indicator of which firm offers the best "deal."
As with most things, it isn't that simple, and Google is probably smart to discourage publishers from obsessing about revenue percentages when the bottom line is what really matters. Google probably knows (as anyone who reads this forum knows) that the more clueless publishers would "go for the percentage" even if the competitive ad network had poor ad inventory, didn't offer geotargeting, wasn't able to serve markets outside the U.S., etc.
It's also worth noting that publishers who think the grass may be greener elsewhere don't have to guess: They can easily test other contextual ads networks' performance--even on the pages where they normally run AdSense ads, as long as they don't run competitive ads and AdSense ads on the same pages at the same time.
Even if Google took a higher percentage, most publishers would still be better off working with them, rather than any of the other (extremely weak) text ad distributors.
There are some very good reasons why Google has a near-monopoly share of the text ad and search markets -- among other things, Google is very good at what they do, they enjoy a huge scale advantage, and they are unusually long term oriented.
But that doesn't change the fact that a valid analysis of Google's business practices needs to consider their market power.
They often use that power in subtle ways which advance their long term interests. It is not coincidental that they keep so many secrets from their "partners" and insist that "partners" not disclose basic information like eCPM which would normally be at the discretion of the other firm.
Can you imagine an automobile manufacturer refusing to tell its dealers what share of the retail price they are receiving each time they sell a car? In a competitive market, no manufacturer could get away with sending its dealers a check at the end of each month with minimal supporting detail, and insist that they not share with other dealers the few scraps of useful information they do provide.
In a fully competitive market, firms usually don't get away with this sort of one-sided arrangement.
Not to say Google offers a bad deal -- quite the opposite. Smaller publishers have zero bargaining power in dealing with an organization as wealthy and powerful as Google (or Microsoft, etc.) and we should be grateful they aren't taking a much larger percentage of the revenues -- assuming it is currently averaging something in the 70 - 80% range, as the published data seems to imply.
you get a 78.5% payout
No YOU don't!
Someone does, it's not just us.
Maybe it's skewed by some big publisher like AOL or someone getting 90%.
I know specifically of one premium publisher that got less, about 14% less.
If you think we're getting paid more than that premium publisher it's going to be a long and disappointing trip.
If the ad market were fully competitive, publishers would choose which ad network/broker to work with partly on the basis of which firms offered them the highest revenue share...
I couldn't disagree more. Publishers will go where they earn the most with similar effort.
YPN, for example, could offer 98% of the revenue to publishers for the next year but if their targeting and performance resulted in less earnings for the publishers, the publishers would decline.
Well...OK...maybe there are a few publishers that would settle for less money because they think they are getting a larger share of the pie.
FarmBoy
