Forum Moderators: martinibuster
So considering a hypothetical recession, is AdSense relatively immune? Or will publishers feel the pain? I can't be the only one wondering, but I don't feel I have any insight on it. I don't think Google itself will be in any serious trouble, but advertisers may be another story. One can imagine shrinking advertising budgets. Conversely though, perhaps shrinking budgets could mean advertisers who left the content network would give it a second look, given the higher cost of search. The MFA shake-out might've been well-timed for this.
Maybe this is too speculative?
I can't be the only one wondering...
You're right. In fact, I was thinking about this yesterday. Unfortunately I don't have any additional insight, but I thought it was uncanny to see this as a topic.
One thing I can think of off the top of my head is that since Google doesn't pay for clicks until more than a month after they're earned, the money will be worth less between the time a link is clicked and the time we are paid for it.
Of course, once the marketing students graduate, they either think that they know more about marketing history, or are simply unwilling to stand up to their bosses. So, usually, ad dollars shrink.
If a recession did happen your per click revenue would probably decrease, but the cost of getting the traffic would likely decrease as well..
If a recession did happen your per click revenue would probably decrease, but the cost of getting the traffic would likely decrease as well..
So those of us who aren't paying for traffic might take a disproportionate hit since we don't have a reduction in cost to offset any reduction in income?
The Dow lost only 16 points and analysts are saying that a recession is unlikely.
It's very hard to generalize about what the state of the economy does to AdSense and its many sectors and subsectors. Maybe travel gets hurt while financial services stays about the same, home improvement ads decline while health and pet products remain steady.
In hard times, more consumers are driven to the Web to find answers to their problems, thus increasing clicks even though average CTR may fall a bit. Or, then again, maybe not.
The great minds used to try to discern the history and inner workings of the universe. Now they focus on the world's greatest current enigma -- Google and its various galaxies.
But it's important to remember that a stock market correction, or even a meltdown, is just fireworks. It's fun to watch, but it doesn't necessarily signal a recession. For example, my dreams of becoming a hundred-millionaire took a swan dive after the 2000 crash, but my income wasn't really affected at all.
My feeling is that the Web is a pretty diverse place and how individuals fare will have a lot to do with where they are and what their niche is.
Bingo. Also, we need to remember that AdSense is an international ad network, and one country's economy can be booming (or at least not losing ground) while another is in recession. Combine these factors with the general growth in Internet advertising at the expense of traditional advertising, and it becomes extremely difficult to predict what will happen in niches that are devoted to blue widgets, Elbonian travel, or mail-order massages.
more dollars are reserved for internet marketing and that more traditional forms of advertising will be the big losers
...because we all know Internet advertising allows better targeting and ROI measurement (1) and when the river goes low, only better fishers get something in the basket.
(1) I supose most of us believe firmly the advantages of online advertising and so we are here.
My feeling is that the Web is a pretty diverse place and how individuals fare will have a lot to do with where they are and what their niche is.
Bingo. Also, we need to remember that AdSense is an international ad network, and one country's economy can be booming (or at least not losing ground) while another is in recession.
The first statement makes perfect sense so long as Adsense is left out of the equation.
Adsense might be an international network EFV, and a publisher's home country might well be booming, but that makes no difference at all when we remember that as publishers, we're paid in US Dollars. The US economy sliding into recession will affect ALL Adsense publishers.
Every month payments get smaller and smaller once they've been converted from weak dollars, so as far as Adsense is concerned the relatively strong UK (in my case) economy makes no difference.
Adsense payments are directly related to the US dollar. The lower it falls, the worse it gets for most of us outside the US.
[edited by: encyclo at 3:39 pm (utc) on Aug. 17, 2007]
[edit reason] fixed bbcode error [/edit]
Adsense might be an international network EFV, and a publisher's home country might well be booming, but that makes no difference at all when we remember that as publishers, we're paid in US Dollars. The US economy sliding into recession will affect ALL Adsense publishers.
Exchange rates and economic recession don't march in lockstep. Trade deficits and foreign investment also come into play. Also, if half a dozen euro and pound-sterling advertisers are bidding for the top slot, the fact that their bids are converted into dollar bids for comparison purposes doesn't necessarily mean they'll pay less for ads.
If I were a publisher worrying about a recession, I'd be more worried about reduced economic activity in my sector than in the national or world economy as a whole. For example, the current subprime crisis in the U.S. doesn't seem to be hurting publishers in the travel sector, and it probably isn't hurting publishers of sites about iPhones, but I'll bet it's hurting the publisher of how-to-get-a-subprime-mortgage-even-if-you-are-bankrupt.com.
IF you are in the baby food business (essentials), you are going to be fine in most cases. Why?, because babies will still need to eat...automotive goodies can be done without. If automotive goodies can be done without, automotive advertisers will drop (one of the best paying niches on the net today).
I think the best thing to help yourself through these times is to make sure you are diversified. Putting all eggs in one basket (site) is foolish and not a good business model to be sure.
All in all, the time to THINK about it is NOW, not tomorrow. This economy cannot and will not continue to hold on in so precarious of a situation...it's like a skyscraper built on a sandy beach, it may hold up for a while but it will slip into the sea in due course.
Also the sub prime and money oversupply ( with lower standards of checking )issue appears to go much broader than just the US with other countries financial institutions buying the debt ( both Sub Prime and US ) and also some following the American Example of consumer lending.
I agree with other posters who have said that if it does come then anybody operating in the Luxury market including Auto, Travel and other luxury goods and services will suffer, but those in the essentials food etc will fare better
we will see what happens in the next 90 days as finance institutions realize the percentage of bad debts they may have purchased in large packages and if and how they panic.
steve
+ Internet is growing
+ Shopping on net is growing
+ Advertizing is growing
+ Advertizing on net is growing
Which should give Adsense some sort of "shield" against minor short-term economic shakes.
And since more and more companies make business "internet only" they cannot cut their advertizing without cutting/hurting pretty directly their business. Meaning: traditional (physical business) model where you immediately cut advertizing when bad times comes doesn't really apply.
I think the US being the largest consumer economy worldwide will mean any recession in the US will effect the rest of the worlds economies whether they export goods to the US or are countries where many US companies operate.
Certain export-driven economies took our difficulties yesterday very hard. South Korea's stock market lost 7% of it's value.
As far as the internet is concerned, however I think the falling value of the dollar is far more of a concern to foreigners.. It would really suck to get paid in dollars and have to spend Pounds on rent, food etc..
However, it works great in reverse! I love getting paid in Euros and Pounds.. particularly Pounds..
The traditional press in the U.S. hasn't made a big deal of it.
Now a blip comes along, they gear up their gloom and doom machine and scare people to death.
Turn off the televison and work on your sites.
IMHO
FarmBoy
There was a hugely unrealistic real estate bubble on the East and West coasts of the US. People had borrowed nearly 100% of the value of their homes. When the bubble burst, those people couldn't even sell their homes to pay off the debt they owed.
I'm reasonably confident that the credit markets in the US will recover. They always have. More often than not, the public doesn't even realize when the economy is in recession. By the time they've been told by the media about a recession, the recession is ending.
That said, I just have to laugh at myself for starting a mortgage-related site three months ago. My goal was to make money from mortgage-related affiliate advertisers.
Those advertisers are hurting now. Can I pick them, or what? ;)
AU dollar has gone from us89 cents to floating between 77-79. All my websites are US based.
Becuase so many australian mortgage lenders get their cash from the US, the AU dollar is unlikely to rebound soon.
go the subprime collapse i say.
The traditional press in the U.S. hasn't made a big deal of it.
You mean the overwhelmingly liberal anti-Republican media? Why would they shoot their political agendas in the foot by helping a Republican get elected next year? Omitting news stories is the same as lying in my opinion. It doesn't matter of we are uninformed as a result because we are just the mindless masses. I find bias in the media to be disgusting whether it be from right-leaning Foxnews or left-leaning everything else. However, the biased "news" that CNN and Foxnews report is relatively mild compared to borderline propaganda being churned out by the BBC. Has anyone read an op-ed from the BBC lately? Any thinking person should be offended by the BBC's utter contempt for responsible news reporting.
In any case, don't believe all of this garbage about a recession. Keep doing exactly what you're doing now. You're far more likely to screw yourself up than to get a head start on all the webmasters trying to avoid calamity. If anything, doing nothing at this point will give you an advantage over the panickers. My adsense is doing just fine.
advertising in google content network means more branding than conversion to me.
that said, recession means no money for webmasters from me
You may be having a recession, but maybe that's because you're using a direct-response medium for branding. :-)
Fact is, Google's total 2Q 2007 revenues were up 58% over 2Q 2006 and 6% over 1Q 2007. AdSense revenues were up 36% over 2Q 2006 and on a par with 1Q 2007 earnings.
It's possible, of course, that some sectors are doing better or worse than others. (Publishers who depend on mortgage ads are likely to be feeling the pinch right now.) It's also possible that, in some sectors, the biggest growth is happening in other areas of the online ad business. Hotel chains and airlines are doing a lot of display advertising these days, for example, which could mean fewer dollars for Google text ads in those product areas.
You mean the overwhelmingly liberal anti-Republican media?
Sigh, here it comes. You'll always find bias in the mainstream when your position is in the far right or far left camp. The far left thinks the big media are big corporation tools, and the far right thinks it has a liberal agenda. Boring.
The far left thinks the big media are big corporation tools, and the far right thinks it has a liberal agenda. Boring.
wow.. I've never heard anyone deny that the American media is biased.. I guess mensa will never get their $40/yr from you.
