Why an AdSense Earnings Drop is a Good Thing

Making Lemonade from Lemons

[ember]

I don't know whether AdSense just has a huge glitch (maybe Saturday's maintenance will fix it) or has fundamentally changed how they calculate income, but instead of stewing over the fact that our revenue has dropped by 50% since April 1 after years of steadiness, I prefer to think of the situation as a good thing. Why?

1) It forces me to contact advertisers directly and establish relationships with them.
2) It makes me diversify and not rely for my income on one arbitrary and capricious corporate giant.
3) It lets me sleep at night knowing that if I lose my AdSense account, it is not the end of the world.
4) No one else is dictating to me what I can and cannot put on my site.
5) I may actually make more money going the direct route.

So, I think this could a blessing in disguise. I was getting lazy, anyway. Time to talk to advertisers.

[myrrh]

Great attitude, ember. Please let us know how the direct-to-advertisers works out - I am very interested in the subject.

One person posted here a year or two ago that he dropped AdSense for selling his own ad space and increased his earnings x6. That sounds excessive, but if it worked out to be x2 for me, it would definitely be worth the work.

[johnnie]

I am interested. One question however keeps haunting me: how do on earth you sell an adsense eCPM of $20+ to direct advertisers? I'm afraid most advertisers would find such CPM fees unacceptably high. Or am I wrong?

[ember]

If you can offer advertisers your space for a little less than what they spend through Adsense, they might bite. Since AdSense takes, what, a 15% to 20% cut, it's possible to price for less and still earn the same as with AdSense.

[ken_b]

it's possible to price for less and still earn the same as with AdSense.

Yeah, but it's a lot more work and record keeping.

You really need to see the space for more than AdWords does to cover the extra work, etc.

[ember]

I know AdSense is convenient; that's why we all use it. But if the choice is 1/2 the income and convenience vs. same income or more and some extra work, I'll take the second option.

[jhood]

The question is not so much whether you are willing to put in extra time and effort, but whether advertisers are ready to deal with thousands of small publishers.

Answer: Not likely.

[netmeg]

Not necessarily true. Depends on your niche, your traffic, your demographics, your reputation & authority, your content, and so on.

[ember]

We used to have direct advertisers, before AdSense, and it worked quite well. Besides, AdWords is so complicated to use anymore that I bet there are advertisers willing to bypass it if they can get comparable ROI without it.

[explorador]

One person posted here a year or two ago that he dropped AdSense for selling his own ad space and increased his earnings x6.

I added a banner for a client on one of my sites. The amount of clicks I got is WAY beyond what my adsense account reports across all my sites together. Many ideas came from that experience, currently working on it.

[makes a little sense]

I have to wonder how many clicks and impressions are not recorded by AdSense due to simple issues with the program software itself and how browsers handle the ads. I know for a fact I get a ton more traffic than what Google tells me.

[asinah]

I signed up for unlimited outgoing call account with Skype and call at least 10 companies a week mainly in Asia and the Middle East.

It is a lot of work to generate an invoice, follow up with the client but I get 1-2 new advertisers a week.

I have being doing that before Adsense was launched.

[honestman]

Diversification is, as always, necessary. I have seen a huge increase in direct sales even in this economy, even as income from Adsense has gone down 25% year over year even with increased traffic. The downside to direct sales is the record keeping etc., and that is no small consideration, but diversification is absolutely necessary in this period in history more than ever (where no thing is a sure thing, and you can't "bank" on anything).

Having said that, Adsense is still a great product which remains unmatched from what I have seen from pretenders...

[Wonderstuff]

Interesting points, but could there be problems with taking advertising directly?

For example, if you keep a record of those companies advertising via G, how do you know if the same ads are being shown globally? You don't.

Secondly, G might well catch on and alter its terms and conditions to include a 'no poaching' policy.

Just a thought . . .

[rash]

According to me, it would work for people with good traffic and niche of course as many have already said but it would be almost impossible for millions of small publishers + targeting would be an issue, bidding is another problem; so forth and so on. What if there is a better adsense alternative in the future?

[vordmeister]

I started diversifying at the start of the year when all other sources of income apart from adsense stopped suddenly. At least adsense is stopping gradually.

I'm diversifying away from advertising altogether into eCommerce. I think it's good to have a kick every now and again.

[rash]

May be affiliate marketing and make money schemes is making way again. If that becomes the case, new ideas to tap-in needs to emerge

[incrediBILL]

1) It forces me to contact advertisers directly and establish relationships with them.

I hope you're not contacting AdSense advertisers direct that you see in your AdSense ads because it's against the AdSense T&Cs and you could get booted from the program in which case you'll really be dialing for dollars.

[incrediBILL]

how do on earth you sell an adsense eCPM of $20+ to direct advertisers? I'm afraid most advertisers would find such CPM fees unacceptably high.

You don't, you sell 4 advertisers $5 CPM ads

I have a ton of direct advertisers and some have been recurring monthly advertisers for many years now, others pop in for a month or two. The trick with direct advertisers IMO is to be willing to be flexible on your ad rates and not just go "take it or leave it" - always find out what a potential client is willing to pay and tell him what you're willing to give him for that money.

If you're sending them good traffic and they get hooked on your lower rates than AdWords charges you can edge up the rates over time but don't get too greedy.

[m0thman]

I hope you're not contacting AdSense advertisers direct that you see in your AdSense ads because it's against the AdSense T&Cs and you could get booted from the program in which case you'll really be dialing for dollars.

I presume you're referring to "Communications Solely With Google. You agree to direct to Google, and not to any advertiser, any communication regarding any Ad(s) or Link(s) displayed in connection with Your Property(ies)."

Just out of curiosity (not doing this anyway), does that mean approaching advertisers viewed on ads on other sites is okay? I'd be surprised if that was allowed as well.

[nomis5]

How to make direct advertising is the problem I have, not the fact that it does work, which for me, it does. I put a client's ad on my site and what's to do from then on?

At the moment I have four direct advertisers, one of which is currently being removed because for some unknown reason, the conversion ratio was too small. Another advertiser has just sent me a cheque this month for not far off £1,000.

But in all cases I have left the click and conversion recording to the advertiser. I just have to trust them about the figures. The trust element appears to be working OK. I can't see how it's possible for me to monitor the conversion rate on an advertiser's site.

Not many advertisers have the savvy on how to monitor clicks and conversion rates. And that's the problem. I know that there is a huge market out there but I don't know how to monitor conversions and very few advertisers know also.

[incrediBILL]

Actually, it doesn't address advertisers seen on Google themselves, it just says "in connection with Your Property(ies)." which is the publisher network so it might be fair game to just see who's advertising on Google itself but I think I'd head elsewhere and look for advertisers just to stay squeaky clean.

[johnnie]

You don't, you sell 4 advertisers $5 CPM ads

All nice and dandy, but how do you do that when you have one ad slot? Do you redesign your site to allow for four 125x125 banners instead of one 350x250?

[incrediBILL]

But in all cases I have left the click and conversion recording to the advertiser. I just have to trust them about the figures. The trust element appears to be working OK. I can't see how it's possible for me to monitor the conversion rate on an advertiser's site.

Why?

There are lots of free ad rotation programs available and even 3rd party hosted services.

Some of the free software you can install on your site even supports recurring billing via Paypal.

Not many advertisers have the savvy on how to monitor clicks and conversion rates. And that's the problem. I know that there is a huge market out there but I don't know how to monitor conversions and very few advertisers know also.

Don't fool yourself, many advertisers use Google Analytics which makes tracking referrals and ROI from your site a piece of cake and trivial to implement.

Another advertiser has just sent me a cheque this month for not far off £1,000.

I took checks in the earlier years, and still have from time to time for really big corporate clients cutting checks for $15K+ for a campaign, but overall now it's pay BEFORE you play with my ads using a credit card because sometimes the checks bounce and you end up paying big bank fees or the client simply didn't like the conversion rate (not my problem, he made the ad) and doesn't want to pay or quibbles for discounts after the fact.

All prepaid ads in advance is the only way to fly IMO, especially with small accounts as they are worth the trouble to mess with otherwise.

Anyway, look around, lots of ad software and billing integration, you can easily make it all turnkey right off your site.

[incrediBILL]

All nice and dandy, but how do you do that when you have one ad slot? Do you redesign your site to allow for four 125x125 banners instead of one 350x250?

It's called ad rotation, same thing AdSense does, if your page gets enough traffic you simply sell blocks of 1K impressions.

I sell text ads mostly as they outperform banners like crazy, advertisers are happier, and you can put more in a smaller space and they're less likely to be blocked by banner blockers because they simply aren't banners :)

[maximillianos]

Adsense earnings are not dropping due to Google, they are dropping due to the economy and advertisers scaling back.

These same advertisers are not going to pay you the "old rate" from last year just because you contact them directly (which is more work for both of you).

Yes, you can make a little more money by cutting out the middle man (G in this case), but I would think long and hard about it first. List out the work and time involved... the phone calls, the emails... setting up the campaigns... providing reports... refunds, unhappy clients... etc. There is a lot that G takes on and handles for you that we often don't think about. 15-20% cut for managing all the aspects of advertising on your site is a pretty reasonable figure...

I for one do not wish to take on that work load when I am already swamped with building new sites and growing my existing sites... I'll gladly pay G a small cut to manage that part of my business for me.

As a related aside: All my ad networks are down lately. Adsense, Tribal, Kontera, you name it... they are all feeling the pinch from advertisers scaling back.

For me, I'm focusing on doing what I do best, which is building my sites up, tweaking my designs to increase pageviews and usability, building newsletter lists, adding features to increase site stickiness... anything I can do to offset the downward trend of the advertising industry...

[edited by: maximillianos at 12:50 pm (utc) on April 10, 2009]

[mifi601]

G does indeed have

a 'no poaching' policy.

[mifi601]

incrediBILL, just saw your post now - sorry for the repeat, but I answered right when I read the post ..

[Edge]

I don't know whether AdSense just has a huge glitch (maybe Saturday's maintenance will fix it) or has fundamentally changed how they calculate income, but instead of stewing over the fact that our revenue has dropped by 50% since April 1 after years of steadiness, I prefer to think of the situation as a good thing.

I like your attitude! I diversified years ago and today AdSense only accounts for 40% of my revenue. I promise you that becoming less dependant on a black-box advertising revenue source (AdSense) is enlightening.

[JS_Harris]

My adsense income was slowly dwindling as well, doesn't matter which site or topic, the clicks are penny clicks most of the time (though i'm sure adwords is charging much much more to the advertiser).

I added a link unit in a prime location, instantly my total earnings doubled on the first day, up about 75% the second day... now on day 4 they're the same again despite sending roughly 50% more visitors off site via adsense.

I did some quick math, i'm receiving less than 7% of what it would cost me to advertise on my own sites with adwords... something just isn't right. I'm considering removing adsense and contacting future advertisers directly as well.

[edited by: JS_Harris at 3:14 pm (utc) on April 10, 2009]