Forum Moderators: martinibuster
[biz.yahoo.com...]
The moral of this story boys and girls is that Adsense Publishing is not a business.
Bingo. Publishing is a business, however, and Web publishers who rely on advertising (as most do) need to deliver audiences that advertisers want to reach.
The moral of this story boys and girls is that Adsense Publishing is not a business.
The real sound software/internet businesses that will withstand the recession are eBay (despite their management attempts to wreck it), PayPal, Microsoft but not something that relies on Adsense. Google will survive, but it's stock will be down by 50%, with all consequences trickling down to Adsense publishers.
You <b>cannot</b> build a sound business with Adsense being its only monetization mechanism. In the bubble, maybe, In a recession, no.
The moral of this story boys and girls is that Adsense Publishing is not a business.
Bingo. Publishing is a business, however, and Web publishers who rely on advertising (as most do) need to deliver audiences that advertisers want to reach.
I wonder how they sleep at night? ;-)
As for IncrediMail, they have a variety of other revenue streams, including direct subscriptions. Their stock is way way down, and not just due to Google, but I imagine they'll survive in some form. Maybe not as a NASDAQ-listed company, though.
Not only that, but publishers need to diversify to have multiple options for revenue sources and provide at least some modicum of value to visitors. Even without running a mailing list, there really IS such a thing as people bookmarking sites, paying return visits and buying stuff.
A general news site may have at AdSense such a low eCPM, that it's possible to replace AdSense with other ads.
But at my site, the next best ad option may have only 10% of the AdSense performance.
Making a web site that say brings you say 1m /year with Adsense, for 3-4 years makes you $4m minus your hosting expenses. There might be a total of 2-3 people on this forum like that (You need about 100m pageviews per month for this, we are talking about sites not much smaller than say craigslist.org). There people are totally affected by Adsense fluctuations. It has worked so far for these hypothetical 3-4 people, but it is still a small business:
[edited by: martinibuster at 7:27 am (utc) on Jan. 14, 2008]
[edit reason] TOS [webmasterworld.com] #28 [/edit]
Besides, this forum is for a broad spectrum of webmasters, not just the few select, and what's happened with the Adsense account in this case makes a good case study and example for anyone.
Besides, if your earnings tank or you get banned from AdSense, it's not a disaster, you're not out of business. You just have to switch to Plan B.
Not to stroll too far off topic… and not to get so specific on the numbers as to violate my AdSense TOS… but with my eCPM and my average payout per click; I would not need anywhere near that amount of traffic to clear $1M per year.
In fact, I would only need about 3% of that traffic. And although I do not know for a fact, but I would venture to guess that more than just a few people are doing this.
(I am not talking about a short snapshot or a small example; I am looking at a long period of historical data from several well established sites that I own.)
I do not have the numbers in front of me, but I believe that Google is paying out about $1 billion USD each quarter in AdSense revenue to its partners and like most all other businesses; I would venture to guess that 80% of that is going to the top 1% of AdSensers, with millions of mom and pop bloggers getting the other 20% via $100 checks.
<EDIT> This site needs a spell checker :) </EDIT>
[edited by: kamikaze_Optimizer at 8:34 am (utc) on Jan. 14, 2008]
Our website have grown by about 10x while we have been using Adsense. Out ecpm has dropped slowly but dramatically as page impressions grew. I have been hearing from my colleagues this is not a coincidence.
I would challenge you to increase your pageviews by 5x and maintain the same ecpm that you have now. So I think your extrapolation to larger sites based on your current ecpm is most likely incorrect.
As for billions in Adsense revenue, most of it is paid to special deals, like Myspace. I still very much doubt that there are many readers of this forum who gross more than $1m/yr from Adsense and do not have special fixed ecpm deals. What I would doubt even more, is that Adsense is their sole source of income, and that their business model continues to be safe in the likely recession in 2008-9.
Besides, if your earnings tank or you get banned from AdSense, it's not a disaster, you're not out of business. You just have to switch to Plan B.
When you run a large website, your bandwidth costs can be quite high. Even our bandwidth costs (and we shopped around), are more than $2000/mo. There are publishes with much higher hosting costs than that, by order(s) of magnitude. Imagine that one month your sole source of income (AdSense) disappears, because Google decides that your traffic is "low quality". It may be problematic to take these losses for several months, until you find and tweak a good alternative.
Our website have grown by about 10x while we have been using Adsense. Out ecpm has dropped slowly but dramatically as page impressions grew. I have been hearing from my colleagues this is not a coincidence.
I would challenge you to increase your pageviews by 5x and maintain the same ecpm that you have now.Again, not to go too far into specifics, but I have that traffic. And although my numbers do flux somewhat, the historical is steady.
As for billions in Adsense revenue, most of it is paid to special deals, like Myspace. I still very much doubt that there are many readers of this forum who gross more than $1m/yr from Adsense and do not have special fixed ecpm deals.
What I would doubt even more, is that Adsense is their sole source of income, and that their business model continues to be safe in the likely recession in 2008-9.Adsense is not their major income, it is the gravy. And yes, 08-09 and I think even longer are going to be hard years. I am at odds on how this will play out in online ad spending.
[edited by: kamikaze_Optimizer at 9:12 am (utc) on Jan. 14, 2008]
Actually I don't really believe this. I imagine you can assess the situation and make rational decisions regarding your own business and your own life. But you might consider doing the same and not lecturing people on how they run their sites.
sutrostyle, same thing happened to one of our sites. Our traffic grew and eCPM drastically decreased.
Stands to reason. The pool of available ads isn't infinite, so why would Google want to let a handful of high-traffic sites suck up high-paying ads? It makes more sense (for several reasons) to spread those ads around.
It makes more sense (for several reasons) to spread those ads around.
In a climate where click affiliates are getting squeezed this is more true than ever before. The ppc affiliates who have made the tier ones 1000's of millions over the last 7-8 years are now getting a big fat slap in return for all their hard work and loyalty. Thats the way it is, you adapt or do something else. However I don't think adsense on it own is a wise solution at all, risk, risk and more risk.
Forgive my naiveté, but I've always thought once you break into the Alexa-Top-Anything category you wouldn't give a rat's ass about AdSense and you'd be selling direct.
Tell that to THE NEW YORK TIMES, THE WASHINGTON POST, and other major media that sell ads direct and use AdSense.
On my own site, I use a combination of display ads, AdSense, and affiliate links. Each serves a different purpose and a different market, and each produces a useful revenue stream.
Also: A site like IncrediMail probably gets lousy CPMs for its display ads because of the audience that it's reaching. Traffic isn't everything: You need a certain minimum to interest ad agencies and rep firms, but demographics and reader motivation count, too.
Tell that to THE NEW YORK TIMES, THE WASHINGTON POST, and other major media that sell ads direct and use AdSense.
Ok, fair enough. But AdSense ads are never above the "fold". For NYTimes it's a small ad at the bottom of each article. Perhaps it improves their page monetization by 2% or so. I don't think they're killing themselves over how that 2% is performing. For those of us who put AdSense above the fold, it's a different matter altogether.
Anyway, my assertion still stands: if your traffic is in the millions, you should invest some time in gathering demographic data and then talk to ad agencies to see what kind of advertisers would want exposure to that demographic. CPM, obviously, none of that clicking nonsense.
Forgive my naiveté, but I've always thought once you break into the Alexa-Top-Anything category you wouldn't give a rat's ass about AdSense and you'd be selling direct. I mean, c'mon the agencies will actually talk to you! So, talk back! You don't see Denton worrying about AdSense, do you?
I think 95% of the Adwords clients appearing on my web site wouldn't even know what Alexa means.
They know what Google means
They know what AdWords at Google means,
but they have no idea what Alexa means.
