Forum Moderators: martinibuster
Google’s partner sites generated revenues, through AdSense programs, of $1.45 billion, or 34% of total revenues, in the third quarter of 2007.
The majority of TAC expense is related to amounts ultimately paid to our AdSense partners, which totaled $1.12 billion in the third quarter of 2007.
which translates to a payout ratio of about 77% to the publishers.
Seriously: Despite all the complaints that we read here, AdSense seems to be doing pretty well. (It's still a niche product in terms of the overall advertising market, but it's a niche product that generates a lot of sales.)
FROM CNN:
Brian Bolan, an analyst with Jackson Securities, noted that Google's traffic acquisition costs as a percentage of total sales decreased from the second quarter and from a year ago. That, he said, is a good sign since it shows that Google is keeping more of the advertising revenue from partnerships for itself.
I think a lot of us know this is true from payout this past year. More traffic, more clicks, less money.
And just a note on payout that was leaked from FEDERATED MEDIA (conference call) earlier this year and no one in this forum showed an interest in was that Google was taking a MINIMUM of 44% from small publishers. They discovered this through their own hard fought efforts to negotiate a higher payout from GOOG.
...from small publishers...
Did they define "small"?
I think a lot of us know this is true from payout this past year. More traffic, more clicks, less money.
Then there are the publishers who have reported more money. Unless you think they're anonmyous representatives of THE NEW YORK TIMES or some other premium publisher, how do you explain their improved EPC, eCPM, and/or earnings in the light of your assumption?
If you're doing less well than last year, the reason is probably simple: More publishers are competing for clicks. AdSense revenues may be growing, but the number of publishers (and those publishers' pages) may be growing even faster.
I didn't write that. That was an analyst at Jackson securities. Sure there are some publishers making more. We're talking about overall trend. And according to that analyst Google is taking a bigger slice.
jhood,
The issue of being fair is a judgement call. If Google takes 44% or more, that's a judgement for each individual. Text-link Ads takes 50% explicitly, so 44% is a good deal compared to that.
To put things in perspective. Agencies that place ads in old media traditionally would get something on the order of 10%.
In my view the market conditions currently favor the ad networks. Advertising in any other media does not even come close to what their cut is online. There is only one thing that can shave the margins that ad networks take and that is a lot more viable competition. (I said VIABLE, Y!)
So far no one else can touch Google in price/performance so we all accept them taking a huge slice.
They actually didn't use the term 'small' (sorry I didn't clarify). They referred to it as the 'standard deal' or something like that. Valleywag posted the entire conference call back in March or Feb. I listened to the whole thing (over 30 mins.), but can't remember which minute they mentioned it. I think it was at least 20 minutes in though.
At the time I thought it was pretty damning actually, so I mentioned it on more than one occaision on WebmasterWorld, but it was just glossed over. I thought it would've been picked up, but it wasn't.
To put things in perspective. Agencies that place ads in old media traditionally would get something on the order of 10%.
Actually, the traditional ad-agency commission is 15%, but Google isn't an ad agency or media-buying service, so the comparison is irrelevant. It would make more sense to compare Google to a rep firm, but even that wouldn't be entirely accurate because Google is both selling and serving ads. What's more, Google is adding value by acting as an aggregator and advertising exchange.
In any case, it's pointless to worry about who's getting what percentage payout, because:
1) We know that Google is paying out 77% overall, but that's all we really know or will know.
2) Our contract doesn't specify a percentage.
The numbers that really matter are eCPM (which determines whether AdSense is worthwhile compared to other revenue streams) and total revenues (which pay the rent and mortgage). Our contract with Google gives us the freedom to pull AdSense code from our pages at any time, for any reason, so we don't need to worry about being locked into a relationship that's unproductive--if Google doesn't provide us with compensation that meets our expectations, we can say "You're fired" or simply remove AdSense ad units from our pages without saying anything, as we see fit.
Hereby I just want to point out that NOONE (except Google) knows the mix of the traffic aquisition cost. Hence, noone (except Google) can make any solid statements about payouts to smaller clusters of publishers (e.g. about payouts to US publishers, payouts to publishers with 100k-1M pageviews per month, payouts to premium publishers, and so on). Noone.
Looking at my October stats so far, I do see a 20% traffic growth year-on-year (in onsite pageviews), but I do not see a revenue increase. I see a 35% decrease!
When will Google's earnings report reflect the real situation with smaller publishers?
77% is there take granted.
The point is they have INCREASED their take according to the analyst (funny how you didn't touch that). Which is also what most publishers seem to be reporting when I view the forums.
You also have to take into account that a handful of large publishers are getting a better deal so that small publishers get a much worse one.
If you can get more money from any competing program, take it. You'd be an idiot not to.
That's roughly what I said further up the thread. Just making the point Google is taking more. Something EFV has been arguing against in thread after thread for the past year.
If you're doing less well than last year, the reason is probably simple: More publishers are competing for clicks. AdSense revenues may be growing, but the number of publishers (and those publishers' pages) may be growing even faster.
Surely. It's 2007. How many businesses aren't online yet? How many of them that are online have never heard of Google AdWords? Most firms have limited options online, so they probably have at least tried AdWords by now and continue with it if it's converting.
That leaves new clients coming from new businesses (and arbitrageurs). The rate of new firms starting up is much lower than the number of new websites and MFAs starting.
p/g
It's silly to argue that Google is taking more when the earnings reports show otherwise.
But that's not what they show EFV! Why don't you dig through some analyst reports and see what they are saying? These guys are paid to finely parse all the corporate info GOOG puts out. I'll take their opinion over yours.
The way I see it is that if G did not sell the advertising for us, we will need to hire a salesperson and absorb the cost.
I'll take their opinion over yours.
"Opinions" don't enter into it. Google states quite clearly how much it paid to its AdSense partners. Again, that doesn't mean everybody is getting the same percentage. In fact, one would have to be extremely naive to believe that every publisher, from THE NEW YORK TIMES to Johndoe-with-10-pageviews-a-day.com is getting the same percentage.
Also, as others (and I) have said repeatedly, obsessing over Google's percentage payout is a waste of time. Either the program delivers on its promises, or it doesn't. Publishers who think their traffic is worth more than Google is paying for it shouldn't hesitate to exploit their other revenue options.
It's a win-win-win situation: it will make you happy because you stood up to "the Man," it will make Google happy because they were able to get rid of another whiney publisher, and it will make the rest of us happy because you won't be siphoning off "our" money any more. :)
Smart pricing is just a way to stuff their pockets.
Ann
BTW:
Conversions is not the name of our game. For that we have referrals.
It is up to the advertiser to sell or not to sell, not us. To get hit with smart pricing for non-converting traffic is really a low blow but given Google's penchant for micromanaging everything and everyone I know it won't change.
If they would help the advertisers they could do more to get rid of phony directory sites, MFAs and various bottom feeders by simply giving a comprehensive and private list to the advertisers and allow them to block them...I don't think they would last long.
Directories-----MFAs-----Parked Domains-----(Rest) Content Sites
Then just maybe, they would be able to pay us for what we are supposed to do---drive traffic, not guarantee conversions.
As for the idea that all publishers should earn the same percentage, you might as well waste your breath by arguing that all authors should receive the same royalty percentages or all of a firm's commissioned sales reps should receive the same commission rate whether they're generating a thousand dollars or a billion dollars in sales. That isn't going to happen, partly because of supply and demand (big, successful players are harder to find and keep than small, less successful players) and partly because the percentage of revenue spent on account overhead is likely to be much lower for large publishers than for small ones.
Ann
PS
If Google wants to give the advertiser a discount that should come from their cut not mine because I did not personally okay the paying out of what should be my pocket.
If Google wants to give the advertiser a discount that should come from their cut not mine because I did not personally okay the paying out of what should be my pocket.
1) The discount isn't coming out of your cut or Google's, it's coming off the top.
2) The AdSense contract doesn't give publishers the power to manage Google's pricing.
1) The discount isn't coming out of your cut or Google's, it's coming off the top.
Some decent competition might alter the overall percentages. Can't believe there still isn't any sensible competition.
Smart pricing is just a way to stuff their pockets.
If Google wants to give the advertiser a discount that should come from their cut not mine because I did not personally okay the paying out of what should be my pocket.
Since Adwords advertisers are able to block poorly converting or non-converting publisher domains, why is smart pricing of publishers even needed?
Have to love these guys:) Since adsense as a TOTAL percentage of revenue is less this quarter then these costs of TOTAL sales is less. Agree with that...now about the second part of the opinion....a stretch to conclude that at best:)
