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Decay trends in CPC over 24 hours and over several years

The news is not good, but it is consistent

         

darkmage

12:57 pm on Jan 30, 2008 (gmt 0)

10+ Year Member



I have over 4 years of Adsense data, and slightly less for channels. The other day I plotted CPC versus day. After ignoring the first glorious but erratic 18 months (due to changes in optimisation, Google policies, site tinkering), I have found that CPC decreases exponentially at 5% per quarter. There was a drop late last year when the new changes to clicking on ad URLs came in to effect, but the decay rate is still 5%. It is also remarkably consistent across the higher traffic channels - it's a bit too jumpy in the low traffic channels, although the slope is still down.

This is nothing new as I have been watching CPC/eCPM slide over the years and in 12 months time, I expect CPC to be down by another 18% or so. Traffic can increase - or decrease - but there is certain point where it is just not enough to cover the decay. CTRs have been pretty much the same over the last few years.

The other things I have noticed over the years is that CPC drop during the day is nowhere like it used to be. This is where you log in, check the numbers, log in again later so you can work out the stat trends over the day. Back in 2005-6, CPC in the first hours would be about 2-3x the last few hours. Using round numbers to demonstrate the point, it would look like
First 3 hours. CTR 4%, eCPM $10
Last 3 hours. CTR 4%, eCPM $5
The average eCPM for the day would be around $7-$8

Now it's more like
First 3 hours. CTR 4%, eCPM $5
Last 3 hours. CTR 4%, eCPM $4.50
The average eCPM for the day would be around $5

And yes the CTR is very constant and has been for years.

Edge

2:16 pm on Jan 30, 2008 (gmt 0)

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



Your observations are consisitant with my high traffic site and others I am able to share details with and verify. There are some (many?) whom claim they have not seen any or limited reduction in earnings - I have not verified any of these claims.

Lots of speculation from smart folks, such as smart pricing, which is the only possible explaination one can find and fit with your challenge published on Google. Other speculations include: pr drop (trust rank), GG keeping more percentage, poor quality, duplicate content, GG keeping all the high paying ads to themselves and feeding us the rest, fewer advertisers on the content network, more publishers competing for ads, ad blindness, poor targeting, mobile users, larger computer screens, google trying to run off mfa's, moon phase, rap music, cost of fuel, baby boomers nearing retirement, etc.

In other words, nobody on the publishers side knows for sure what is going on regardless of how confident they are.

[edited by: Edge at 2:28 pm (utc) on Jan. 30, 2008]

europeforvisitors

3:21 pm on Jan 30, 2008 (gmt 0)



Lots of speculation from smart folks, such as smart pricing..[SNIP], etc.

Yep. Those who are affected could be victims of any, or all, of the above. No one except Google knows, and even a Google account rep might not be able to determine why an individual publisher was seeing a decline in EPC, CTR, eCPM, or total earnings.

As for the idea that some publishers "claim" not to have been affected by the earnings plunge that others have complained about, you could just as easily say that some publishers "claim" to be earning less than they were. Any anecdotal evidence posted in a forum has to be taken on faith, especially when it's shared anonymously.

tim222

4:10 pm on Jan 30, 2008 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



The hourly changes in eCPM make sense because throughout the day, the origin of the concentration of clicks is moving through different places in the world. For example, at 9AM Pacific Time you might be getting most of your clicks from the United States. Meanwhile at 9PM Pacific Time, you might be getting most of your clicks from the Middle East. I don't know for sure, but I think that the origin of a click plays a role in the value of the click.

Next, the decline or rise in average eCPM on one particluar site doesn't say anything about AdSense eCPM as a whole. What you're seeing could be easily explained by simple economics. What was valuable 5 years ago could be less valuable today. Just like the cost of oranges depends on the weather and the season, a website topic could be hot this year, and cold next year. I think the stats would be more meaningful to AdSense in general if your analysis covered a broad range of sites. Say, 20 different topics over a number of sectors (i.e., some electronics, some travel, some health, etc.)

europeforvisitors

5:13 pm on Jan 30, 2008 (gmt 0)



I think the stats would be more meaningful to AdSense in general if your analysis covered a broad range of sites. Say, 20 different topics over a number of sectors (i.e., some electronics, some travel, some health, etc.)

Yes, and they'd need to be separate sites with targeted audiences, not just one umbrella site with a lot of topics (since the audience of, say, a general-interest directory or portal might not be as motivated to buy as the individual audiences of dedicated electronics, travel, health, etc. sites might be).

ddogg

8:52 pm on Jan 30, 2008 (gmt 0)

10+ Year Member



No doubt Google is taking more of the money.

Any of you have large sites where you are a large AdWords advertiser and a large AdSense publisher? If your eCPM is dropping, shouldn't your advertising costs on the content network be dropping as well? My costs are not dropping yet my eCPM has dropped, that makes no sense. I doubt it's smart pricing, my site is no worse than any in the content network and better than most. I as an advertiser should be paying less if AdSense publishers are making less. If I'm still paying the same, who's taking the money that publishers are losing?

europeforvisitors

9:03 pm on Jan 30, 2008 (gmt 0)



I as an advertiser should be paying less if AdSense publishers are making less.

But "AdSense publishers" as a group aren't making less. Some are making less, some are making more, and some are staying about the same.

What's more, the fact that you're spending the same (or more) on ads while your publisher income is decreasing is meaningless unless you're buying and running the same ads on the same pages. Consider, too, that you may be a victim of low quality scores on the AdWords side and smart pricing on the publisher side (not an unreasonable assumption, if you're engaged in click arbitrage).

jomaxx

9:11 pm on Jan 30, 2008 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



EPC for my main site was slightly higher in 2007 than in 2006, and slightly higher in 2006 than in 2005. So, as always, YMMV.

One factor that may be significant is that this site's EPC is in the medium-low range. I would think it possible that sites targeting high-value clicks have seen a gradual decline for various reasons.

kidder

12:27 am on Feb 6, 2008 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Yeah greed might be a reason - Google being just a little greedy.