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Your Theory Why AdSense Earnings Were Higher Years Ago

Fun with Tin Hats - What's Your Theory?

     
8:05 am on May 2, 2009 (gmt 0)

WebmasterWorld Administrator martinibuster is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month



A civil discussion, not a debate. It's fairly clear there was an AdSense boom time and then a periodof change that affected revenue, or at least it wasn't so easy to turn a buck. Not everyone has experienced a decrease because not everybody is standing still. Nevertheless, I think even those who are making more now than then understand what I'm alluding to as far as how much easier it was to make a buck when the service was new as opposed to now. I am not saying AdSense is dead or not lucrative. I'm just pointing out that there has been a change/growth/whatever and am throwing out the question asking for some reasons why you think this might be so.

Please list your theory, speculation, or wild idea why you think AdSense earnings were higher before than now?

Here is one theory. As I recall, there were thousands of dollars worth of AdWords coupons flooding Internet conferences. Those AdSensers who have not attended conferences several years ago won't know what I'm talking about so before you comment on this theory, hear me out. (Here is a recent example [google.com] of an AdWords promotion that would inject Google money into the system, though probably not on the same scale as in the beginning).

Every conference I went to there were thousands of dollars worth of coupons available from denominations of $250 on down (as I recall). I think there may have been $500 coupons available, too. There were so many coupons floating around that some people were selling them, exchanging them between themselves, and opening multiple AdWords accounts to take advantage of them.

Could part of the higher payouts have to do with there being less publishers in the system? Is it possible that another contributing factor in those early days of higher ECPM was the flood of AdWords coupons?

[edited by: martinibuster at 8:27 am (utc) on May 2, 2009]

3:19 pm on May 4, 2009 (gmt 0)

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I believe it was in 2006 (?) when Google introduced link units and my earnings more than doubled. Then they changed the keyphrases shown on link units. Previously, if your site ranked top on "blue widgets" (d*mn widgets) then "blue widgets" would appear on top of the list of your main link unit. But then, people that had arrived on your site by searching on Google for "blue widgets" would again be confronted with another list of blue widgets links. So the change Google made was to not show your main keyphrases as links in link units, but more arcane, though related keyphrases. Clearly, the click rate will be much lower.

The pay-out per click has also halved since the economic turmoil.
3:26 pm on May 4, 2009 (gmt 0)



The pay-out per click has also halved since the economic turmoil.

As usual, YMMV. My average EPC has increased quite a bit over the past 12-18 months, and it's currently at near-record levels. For my site, a decline in clickthrough rates is the only matter of concern.

3:29 pm on May 4, 2009 (gmt 0)

WebmasterWorld Senior Member play_bach is a WebmasterWorld Top Contributor of All Time 5+ Year Member



September was the last month I enjoyed a high CTR/earnings. Since then, I average only about 1/3 of that. Not sure what happened to account fro the drop - I didn't change a thing.
8:40 pm on May 4, 2009 (gmt 0)

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I think social networking traffic has completely dilluted the marketplace, lowering eCPM's nearly across the board. The top social networks probably account for half the AdSense impressions served. Just speculation, but that is my guess. It lowered conversion rates and advertisers stopped using the content network.
10:30 pm on May 4, 2009 (gmt 0)

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I'd change that from "stopped using" to "stopped paying any sort of a premium for".
3:35 am on May 5, 2009 (gmt 0)

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The ability of the advertiser to set different rates for search and content traffic.
3:54 am on May 5, 2009 (gmt 0)

WebmasterWorld Administrator anallawalla is a WebmasterWorld Top Contributor of All Time 10+ Year Member



I haven't seen anyone mention changes to the organic search algos. When thin affiliates were king and duplicate content was fine, there were millions of such pages, so a lot more opportunity to get an AdSense click.
11:32 am on May 5, 2009 (gmt 0)

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Simple..the increase in publishers has been way more than the increase in the number of advertisers...
11:51 am on May 5, 2009 (gmt 0)

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My theory is that number of publishers has increased a lot during last 2 years of recession. A lot of people who lost jobs in last 2 years are trying to earn their living online from their sites. This is evident from the fact that more content writers, particularly from the USA and UK, are available on freelance sites now and their asking prices for jobs are a lot lower too.

Sites that were started in mid to late 2007 by these new publishers started ranking in Google by the end of 2008 and thus started eating into the market share of older and established sites.

Ad blindness is factor too. I don't remember the last time I clicked an adsense ad on the sites that I visit frequently.

2:24 pm on May 6, 2009 (gmt 0)

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Obviously many factors at play here , one more in case it wasnt mentioned. My less than average earnings coincide with rise of CA dollar against US dollar, so i suppose its true for other foreign publishers. Budgets are affected by exchange rates. 4 years ago i got as high as 33% exchange , made a huge difference.
5:20 pm on May 6, 2009 (gmt 0)

WebmasterWorld Senior Member ogletree is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Many of you missed the title. He said "Years Ago" not last month or last year.
8:00 pm on May 6, 2009 (gmt 0)

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Well, I joined Adsense in 2003 and by now the revenue is down to 10% of what it used to be.

Revenue has been gradually sliding down while every thing else went up (unique visitors and pageviews - I am talking about a single website).

Right, I used to get X-Mas cards from Google on top of decent revenue and now I just about get a monthly payout.

The only reason Adsense is still on my site is that some of my direct advertisers still view Adsense as some sort of "quality sign" - like: "Google is doing business with him, he must be ok".

Back on topic: The reason for the decline?

My direct advertisers who are also using Adwords tell me that they are paying between $1 and $4 per click on keywords. Those ads show up on my site and I am paid $0.36 (on average).

I used to be paid well above a dollar per click.

So: Avertisers pay more per click and I get paid less per click than 6 years ago...and the gap is going where?

Make up your own math...

In my area, Google is keeping more of the pie for herself ( I do think of Google as a female for obvious reasons )

Thanks for listening...

8:54 pm on May 6, 2009 (gmt 0)

WebmasterWorld Senior Member ogletree is a WebmasterWorld Top Contributor of All Time 10+ Year Member



jolle they may be paying $1 - $4 a click but does not mean they are paying that much on the content network.
9:32 pm on May 6, 2009 (gmt 0)

WebmasterWorld Senior Member hobbs is a WebmasterWorld Top Contributor of All Time 10+ Year Member



my direct advertisers still view Adsense as some sort of "quality sign"

I take it your advertisers don't browse the web much..

1:17 am on May 7, 2009 (gmt 0)

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Not so long ago, I spent Five figures/month on content ads (Adsense ads), now I only target Search and Search partners. I ran them for over 1 year, was losing money, but I was thinking "hey, at least I'm getting branding out of it". Now as the recession kicks it, it's better removing content ads completely because they do not convert as well as Google's main Search product.

[edited by: martinibuster at 2:05 am (utc) on May 8, 2009]
[edit reason] Fixed typo. [/edit]

8:24 am on May 7, 2009 (gmt 0)

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"smart pricing" - ie. Google decides how much you should get for the ad impressions, the rest of your earnings goes to Google.

And yes, I know that Google doesn't reveal the percentage paid to any individual publisher

It varies, but it can be around a 75% cut. I know this because 90% of my adword campaign was appearing on my own adsense over a couple of days - my adsense earnings was only 25% of the money I spent on those pages.

12:24 pm on May 7, 2009 (gmt 0)

WebmasterWorld Senior Member piatkow is a WebmasterWorld Top Contributor of All Time 5+ Year Member



For me the CTR is way down which I put down to ad blindness.
CPM is down too (UK) but that is compensated by the weak pound.
2:53 pm on May 7, 2009 (gmt 0)



"smart pricing" - ie. Google decides how much you should get for the ad impressions, the rest of your earnings goes to Google.

This thread isn't a debate, but a factual correction might be useful to keep the discussion on track:

Smart pricing is a discount for advertisers. In other words, if the bid for a click is a dollar and you're "smart-priced" by 90 per cent, that means the advertiser is billed 10 cents for your click instead of the nominal or maximum bid of a dollar. Google doesn't keep the other 90 cents; the advertiser does.

According to an article titled "The Facts About Smart Pricing" [adsense.blogspot.com] in Google's official AdSense blog, "Google doesn't make money from smart pricing. In fact, we make less money, since the cost to advertisers is reduced in order to provide a strong ROI.'

A more detailed explanation of smart pricing is available in the Google AdWords Learning Center. To read it, scroll down to the bottom of "What is the Google Network? [google.com].

It's reasonable to assume that, over the years, Google's smart-pricing formula has evolved, and Google has acquired more data to use in determining where to apply smart-pricing discounts and what discounts should be used in individual cases. However, smart pricing is just one of the reasons why a given site (or publishers on average) may be earning lower eCPMs today than in 2003 or 2004.

6:47 pm on May 7, 2009 (gmt 0)

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Actually, this thread is not a debate. But a controversial view should be in order.

Isn't it that Google claims that...

Smart pricing is a discount for advertisers. In other words, if the bid for a click is a dollar and you're "smart-priced" by 90 per cent, that means the advertiser is billed 10 cents for your click instead of the nominal or maximum bid of a dollar. Google doesn't keep the other 90 cents; the advertiser does.

...but we have no proof for this claim. All we have is Google's word for it, just have a look at your sources: "official AdSense blog", "Google Adwords Learning Center".

And I highly distrust Google.

7:34 pm on May 7, 2009 (gmt 0)

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my opinion is that google adsense has taken an increasingly bigger percentage over time.
10:01 pm on May 7, 2009 (gmt 0)

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I suspect that being Smart Priced isn't an all-or-nothing deal. I think it's a sliding smart-price scale (SSPS). If your site isn't performing too well, over time they will slowly decrease the amount per click/impression. And to compound the problem, you add other ad networks, change sizes/colors/etc and they slide you down the earnings scale down a bit more :-) So there comes a point where you truly are smart priced but it happened so slowly you didn't notice until it was too late.... who knows, it's all speculation and G has their secrets. What do you think?
5:32 am on May 8, 2009 (gmt 0)

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Another reason could be internationalization of traffic. Not all ad-clickers give you as much as money as those in US do...
2:40 pm on May 8, 2009 (gmt 0)

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Topical article titled "Online Advertising Expenditure Forecast, 2009-2010" which addresses many of the issues discussed here in a macro manner: [clickz.com...]
3:02 pm on May 8, 2009 (gmt 0)



Interesting article, Honestman. If the forecast is correct, "search advertising" will grow by 7 percent in 2009 and 6 percent in 2010. That sounds good until you stop to realize that only part of that growth will come from publisher networks like AdSense (as opposed to the search engines themselves). What's more, it's unlikely that the number of pages on the Web with AdSense ads won't grow at a faster rate than advertisers' expenditures. (I wonder how many participants in this thread aren't increasing their AdSense impressions by at least 6 to 7 percent a year?)
3:51 pm on May 8, 2009 (gmt 0)

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Yes, the math is pretty basic, but I was a bit surprised that online display advertising was projected to go down even as print magazines and newspapers continue to fold at a frightening pace. But the economy is still in complete shambles and will be for many years to come, in my opinion. There are many (perhaps more serious) economic crises soon to come when you consider the many empty office and residential buildings in places such as Manhattan, the Detroit and Cleveland ghosts towns, and the likelihood of coming credit card debt/delinquencies with no home equity to fall back on, etc...

So us U.S. beggars can't be choosers at the moment.

6:00 pm on May 8, 2009 (gmt 0)



I was a bit surprised that online display advertising was projected to go down even as print magazines and newspapers continue to fold at a frightening pace.

I think we're just seeing a shakeout in display advertising (the "flight to quality"), with advertisers going after more targeted audiences at the expense of generic display ads in online newspapers, portals, ad networks, etc. This could be having an effect on AdSense publishers who use Google's "image ads" or display ads.

6:42 pm on May 8, 2009 (gmt 0)

WebmasterWorld Senior Member vitaplease is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Growing Adsense blindness:

Same site in May 2006 2.07% CTR
Same site in May 2009 0.87% CTR

same amount of international visitors, nothing changed to the site/or Adsense in those years.

8:45 pm on May 8, 2009 (gmt 0)

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I was thinking, it might be time to drop off the AdSense bandwagon? I know people have been doing it, but my turn is approaching soon. Revenue is 50% of what it used to be 2 years ago.
8:48 pm on May 8, 2009 (gmt 0)

WebmasterWorld Senior Member demaestro is a WebmasterWorld Top Contributor of All Time 10+ Year Member



My theory is simple, people are more "savvy" when browsing the web and they have found that clicking on an ad rarely results in you finding what you are looking for.

As people get better at searching the web for what they want, they become less interested in the places that ads take them.

This coupled with people becoming so used to ads on pages that they become part of the background and aren't even read as much.

11:16 pm on May 8, 2009 (gmt 0)



I was thinking, it might be time to drop off the AdSense bandwagon?

As always, it depends on what the alternative is. Do you have a more profitable way to use the screen real estate that you're currently allocating to AdSense? If so, what are you waiting for? If not, how willing are you to give up AdSense revenue (even if it's revenue that you aren't happy with)?

My theory is simple, people are more "savvy" when browsing the web and they have found that clicking on an ad rarely results in you finding what you are looking for.

That isn't necessarily a bad thing if it means that more people are recognizing "Ads by Google" as ads and clicking on them only when they're interested in what the advertisers have to offer. Having people click on ads because they think they're navigation links isn't good for anyone in the long run (though it may produce short-term earnings for the make-money-while-you-can crowd).

Also, here's a slightly wacky but not completely off-the-wall thought:

I wonder if the growth of broadband has had any impact on clickthrough rates. In the days when most people were accessing the Internet with dial-up, there probably was a lot more frustration-driven clicking than there is nowadays. ("Damn, that click didn't do anything, so now I'll click again or click this other link instead.") With high-speed broadband access, the first click is more likely to result in an immediately-visible response. That could mean fewer inadvertent AdSense clicks and lower average CTRs for many publishers.

[edited by: signor_john at 11:28 pm (utc) on May 8, 2009]

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