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What's your AdSense convenience factor?

AdSense vs. selling ads direct to advertisers

     
4:12 pm on Jun 23, 2008 (gmt 0)

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"Convenience factor" is a term I use, it's similar to "opportunity cost" in some ways.

With AdSense, all I need to do is copy and paste some code and I start earning.

If I sell ads to advertisers, I have to invest some level of time and money to find potential advertisers and close the deal. Then I have to put together the actual ads that will appear. Then I have to request and manage payment. I also have to manage the ad by removing it at the end of the term or invest more time and money in getting the advertiser to renew. If the advertiser doesn't renew, I need to start over to find a replacement.

Let's assume I earn $100 with AdSense. I might need to earn $250 with direct sales to account for the extra time, effort and expense of running direct ads. That would be a convenience factor of 2.5.

Do you have a convenience factor? What is it?

FarmBoy

6:14 pm on June 23, 2008 (gmt 0)

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Good post.

I'm running only AS, but realize that I need to diversify to be prudent. Your observation raises an unpleasant -but valid- factor I need to plug into my plans.

6:42 pm on June 23, 2008 (gmt 0)

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That would be a convenience factor of 2.5.

Assuming we're taking western economy expenses into account here I know I would need more since I've already looked into this and actually set-up my AAP (Alternative AdSense Program) with a very catchy name too. I can't tell you it as it would then be obvious which are my sites.

There are two options:

1. A self-managed account similar to AdSense, this could easily be done for a 1.5~2.0 factor.

2. Bespoke service, your suggestion, this is much more costly and would need a factor of at least 3.0~3.5 to employ the right people.

Obviously it's all about overhead costs, if it could be outsourced at the right price then these could come down.

YMMV

7:36 pm on June 23, 2008 (gmt 0)

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When we started selling ads years ago, that was indeed the case -- e.g. spending time and manpower resources going after new advertisers, etc. But after years of building solid reputation, we have a waitlist of advertisers so we don't really go after new ones anymore.

Plus, the ad management software we have automatically alerts advertisers that their campaigns are ending so we don't necessarily have to spend time contacting them. The ad software also allows us to simply set the start date and close dates of the campaigns. Of course, someone has to input into the system the details of new advertisers and new campaigns.

Considering that we get 100% of the revenues from selling our own ads whereas Adsense takes a cut, I'd pretty much say they're both even. And I'd love MORE of both :o)

2:27 am on June 24, 2008 (gmt 0)

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We do sell ads directly. For PPC we built our own link management system. For image ads we currently use GOOG AdManager because is free. Our PPC link inventory is pretty much sold out. As per banners we do have some availability.

I would use AdSense for our unsold image ad inventory if the CPM was above $3. I would give AdSense all my image ads inventory if CPM per ad unit was over $8.00. My recent AdSense image ad test was delivering about 0.15 CPM.

As per the text link ads, I cannot imagine that AdSense would ever reach our CTR and CPC.

That being said. I would give AdSense all our business if I could make 80% from what we are making by selling ads directly. My estimates are that we would lose 90% of our earnings if we would give AdSense our business at this moment.

2:53 am on June 24, 2008 (gmt 0)

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With the requirement to put privacy/cookie notice and change it as often as Google wants you to, it's close to 1:1.
 

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