Forum Moderators: martinibuster
According to the article, average CPC has fallen to its lowest level in two years, and Google's average CTR (for both AdWords and AdSense, presumably) fell from 1.8% to 0.7% in 1Q 2009.
The article goes on to say that virtually all of the decline occurred in European, Middle Eastern, and African countries, making Google more vulnerable than Yahoo and MSN (in terms of CTR) since it controls 95% of the non-U.S. search-ad market.
The article's author, Rob Hof, adds that (based on what he's hearing) January and February were "pretty awful" but there were signs of improvement in March.
The BUSINESS WEEK "Tech Beat" article is here [businessweek.com].
Quite so. I put my first site online in 1996. It has been my 'full time job' for over 8 years now. I'm almost 60 years old and it's a hassle sometimes, but to be able to do this sitting at home is nice.
My eCPM going back to 2003 has stayed somewhat stable (!) but a linear trend line shows a bit of a drop mainly because 2004 was a pretty high year with a few high spikes. During 2005 I had a significant drop. Then in 2006 it popped up a bit, but all in all it's relatively stable since February 2007. Over the last week it has been pretty good - Above my 'normal'.
Impressions reported and income have both risen over the years but I haven't done a correlation study on them. I can say the trend line for page impressions reported is steeper than the trend line for revenue.
There does appear to be a correlation of eCPM and revenue since 2003.
All of this, of course, is what I'm seeing. Your mileage may vary...
How else could it be explained when, in my case, all the advertisers I can see seem to remain pretty constant with only new ones entering the market, not established ones disappearing en masse?
What you wrote above has nothing to do with revenue, yours, mine or anyone elses. What MATTERS is what they are paying, and yes, because of the way adwords works, huge fluctuations can occur from day to day, as a result of the behavior of one or a few advertisers. If you don't understand how the bidding works, and most people don't who post here, you can't understand your revenues.
Seeing an immediate overnight 25% reduction for several days and then an immediate 33% increase is not the normal behaviour of any kind of market, ok we're not in normal times, it is the behaviour of "manipulation" or "malfunction".
Actually it is ABSOLUTELY typical of the adwords system, where what the advertiser actually pays is subject to what other advertisers bid. Dynamically. Seriously, I have paid for clicks at 30 cents, and clicks at one dollar without my having changed anything.
[edited by: tedster at 7:39 pm (utc) on April 9, 2009]
According to the article, average CPC has fallen to its lowest level in two years, and Google's average CTR (for both AdWords and AdSense, presumably) fell from 1.8% to 0.7% in 1Q 2009.
The unfortunate part of these analyses, I suspect, is that the economic downturn is resulting in facile explanations for adsense drops. I think you will find eventually, it will be realized that the KEY problem, the FUNDAMENTAL issue is CTR, and that the drop in CTR is serious enough to drive the adsense industry to its knees even in better times.
The problem is ad blindness, and a lack of credibility in the ads shown by google, which in turn is a result of their hopeless quality control and supervision. The killing of this goose by google will become more obvious when the economy returns to a positive slant.
CTR won't. That's my prediction. I don't even believe that google could take action to rehabiliate the credibility of their ads in the eyes of surfers.
You heard it here. It's not simply lower bids, or lower budgets, which are certainly partly in play (though you have to wonder why a company would cut back if the ads make money). It's CTR that is affecting all of us.
My experience is very much the same as yours, though this year the decline in revenue is about 25% year-over-year, even as the curve is maintained. I have offset this with different streams. Of course much of curve is sector-related.
Coachm
You are right about the potential and perhaps increasing reality of "banner blindness." I once would not consider clicking on any flashing ad (especially one that took over the screen with a "close" button which could not be found). Now even text links escape my vision. Of course I don't watch TV commercials either, so perhaps it would be useful to find a more suitable subject.
Regarding Adwords, what % of income do you invest (if any) in Adwords in order to see how it works such that you come to your conclusions? Must one be a "big player" to see the results, or is a smaller reinvestment sufficient to understand both sides of the equation--in your view, of course?
Regarding Adwords, what % of income do you invest (if any) in Adwords in order to see how it works such that you come to your conclusions? Must one be a "big player" to see the results, or is a smaller reinvestment sufficient to understand both sides of the equation--in your view, of course?
No need to be a big player at all. I've spend under 5k on adwords over the years, using it on and off (I'm actually not very good at making an ROI).
What IS important is a strong DESIRE to LEARN, rather than what is often demonstrated here (a desire to find only what buttressses one's own opinions). And to be observant.
The people who succeed in any business are those that are intensely curious about how the whole sector works, whether its selling ads, or candy. The more you know the better you can predict, and then the better you can be in control of your business.
To be fair, google started with something simple, and then made it SO complex for both adsense and adwords that it's hard to understand. Some will NEVER get it, and these are the same people you saw three years ago complaining about the same things they do no.
The key here is remembering that the "auction" is blind, in that an advertiser sets a MAXIMUM BID, or a bid on a position, etc. The actual amount an advertiser pays for a click on your site depends on what other advertisers are doing, smart pricing. For example, I have a max on one campaign of about $1.00 but the average I am paying is way less than that.
So, various website owners are getting no more than their cut from a max of a dollar, but many are getting much less.
We actually don't know what the range of individual clicks are. Did the average I spend (let's say 63 cents). come from all 63 cent clicks, or did I actually pay a few poor souls a nickel, and others a buck?
So, for the same campaign and my same "bid", I may be paying hugely different amounts for different clicks EVEN on the very same website. Because what I actually pay depends on what the other advertisers pay.
Which means, (sorry for being wordy) that in many markets it is quite possible to have large swings explainable by what advertisers are doing, even when the advertisers are the same.
Real life example. A company I know of sets $6 bucks a click as their max (it's high priced business software solution). There are 5 or so major players that compete in that market. What happens when this companys says: "I'm going to see what happens if I drop my bid to 5o cents"?
The answer, is maybe nothing much. Maybe a huge dramatic crash for any pages related to these ads. It all depends on what OTHER advertisers do.
Actually if you grasp what I've written it explains a lot. Couple this with the fact that human beings misperceive cause/effect relationships and get really confused with probability and variance (there's actually a book on this), and it explains why people here try to explain things as "glitches".
...but then again, I could be completely wrong about everything. Glitch? Advertiser behavior? Visitor behavior?
THe best answers are the ones that allow you to figure out how to succeed better. For me, calling something a glitch doesn't put any more money in my pocket.
Soapbox off. sorry.
PS. Our adsense rev is now down about 66% from the highs years ago. Since I expected this, it hasn't been a major hardship, because we've been shifting away from them for ages. The economy crash, I did NOT see. SIgh. Nobody's perfect.
Still March a great month.
How wrong can you be! It's ecpm not ctr that is the problem. You base your argument about ctr being the problem entirely on the perspective of an adwords perspective. Go write in the adwords section about adwords problems. Not in the Adsense section.
And yes, you are correct, it is possible that you are wrong. And it is also possible that others have considerable knowledge and insight into Adsense / Adwords. Possibly, not all the knowledgeable have left this forum, just those you diagree with? Listen to the babble, much of it is borne of considerable knowledge and ability.
How wrong can you be! It's ecpm not ctr that is the problem. You base your argument about ctr being the problem entirely on the perspective of an adwords perspective. Go write in the adwords section about adwords problems. Not in the Adsense section.
Actually he's *not* wrong about this, YOU don't get to decide what is and what isn't discussed in the AdSense forum, and if you don't think AdWords issues are so tightly woven as to be inseparable from AdSense issues, then YOU don't have as considerable knowledge and ability in this area as you think you do.
It's ecpm not ctr that is the problem
eCPM is an artificial metric based on two realities: EPC (earnings per click) and CTR (clickthrough rate). Yu may regard yur eCPM as a problem, but it's merely a symptom, not a cause.
