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Best guesses for when the upturn will begin?

...adsense earnings have fallen off a cliff

     
7:53 pm on Jun 7, 2009 (gmt 0)

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imagine a man walking along the edge of a beautiful cliff, and then slipping on some excrement and plummeting to his death. that is pretty much what has happened to my adsense earnings this last month.

probably started around the end of april, before recovering a little tiny bit first week of may, and then heading south. shows no signs of slowing either. i'm now down to about half what i was earning at the end of april. the last two days have been truly awful.

i've seen some graphs about the slump in eCPM for various different countries (uk, spain, france), and they all show drops of nearly 50% from about December 08 to February 09. i'm guessing the economy has only got worse since then.

so instead of another depressing thread about how we are all doomed to die a penniless death, i was wondering if anyone has some good guesses about when the upturn will begin.

i figure that a lot of advertisers plan their budgets quartley and half-yearly, so the earliest that we might realistically expect an upturn is july. probably a bit optimistic though.

7:12 pm on June 10, 2009 (gmt 0)

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Our research suggests that the people actually ARE clicking less. It began in October (after the meltdown of Lehmann), and it still has not recovered. This statement is based on our independent click-tracker that for a long time now has captured the clicks on Adsense. In October, the number of clicks decreased significantly, and this move was reflected both in the official Adsense stats and the independent click-tracker stats.

My findings are completely in sync with Zett's, and this with a fairly large dataset from which to extrapolate across a few sectors.

This forum has offered many valid possibilities, which taken as a whole would explain a gradual linear decline. But the steep decline in October is still a mystery, though I am seeing signs of a recovery of late. Certainly given that advertising spending is either slightly shrinking or will slightly increase in the coming years according to your favorite media source, the many individuals who are pushed into freelancing and sometimes creating sites due to unemployment or under-employment (16% of the U.S. work force), shrinks the total pie as well as the appetite for the foreseeable future. And while the world economy is increasingly globalized, the U.S. brought on this world recession/depression and obviously holds on by its fingertips to its still significant economic clout.

I do think that the series of bubbles or myths which constitute the "American Dream" have burst, which is tragic in the short-term for the many victims, but is good in the long-term, as it is a sign of social and economic maturity. Growth, while conservative, will be based on a more solid and realistic foundation than the get-rich-quick schemes which snake-oil salesman have managed to sell for years. This means that we will likely see a relative long-term leveling of revenues. I expect the slight upturn to happen in 2010 when employers gradually start to hire again after squeezing all the "productivity" they can out of existing and already stressed-out and overworked employees.

[edited by: honestman at 7:13 pm (utc) on June 10, 2009]

7:12 pm on June 10, 2009 (gmt 0)

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I read the other day, that some ecommerce sites are saying that people may search, and do nothing, then come back up to a month later and buy !
7:33 pm on June 10, 2009 (gmt 0)

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It's interesting to find out that the clicks have disappeared rather than shifted to another sector. The peak in October is in synch with Google's report that revenue has declined since 4Q 2008. It probably began to decline during that quarter, but not enough to offset prior gains during the same quarter.

Now I wonder... is the lower revenue due to the decline in clicks, or are advertisers actually putting up less money? Did the clickers cause this or was it the advertisers? If people click less then advertising budgets don't get depleted. If advertiser budgets shrink, then the effect is essentially the same. The former is bad news for us because an upturn in the economy might not cause people to start clicking again, now that they've stopped. On the other hand, if advertiser budgets are shrinking then that's probably only temporary.

7:46 pm on June 10, 2009 (gmt 0)

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it's probably a combination of both,
people don't want to buy anything so they stop clicking. lower sales means the advertiser's have to cut their ad budget, which decreases the number of relevant ads on show on our sites making it even less likely that people will click.
7:59 pm on June 10, 2009 (gmt 0)

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Well probably not coiincidentally, September 2008 was when the stock markets started to crash. Meanwhile, shortly thereafter, firms began to lay off and beginning October 2008 the unemployment rate began to climb sharply.

I don't know about you guys, but a large portion of my visitors are people browsing from work. Maybe in September when things started to get scary, people quit goofing around and got busy doing their jobs because they knew layoffs were around the corner.

8:12 pm on June 10, 2009 (gmt 0)

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looks like we need a recovery in the goofing around market
8:35 pm on June 10, 2009 (gmt 0)

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So zett and/or honestman... Can you guys plot your data against the unemployment rate to see if it's inversely proportional to the click rate?

If click behavior is related to the unemployment rate, then I think it's reasonable to assume that when people go back to work, not long after the click rate will go up again :)

8:58 pm on June 10, 2009 (gmt 0)

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so instead of another depressing thread about how we are all doomed to die a penniless death, i was wondering if anyone has some good guesses about when the upturn will begin.

Some sectors of the economy are actually up right now. Can you change your business model so that it has sections that do well when the economy in general goes down? Like selling used goods instead or new, more fix it yourself articles, staycation ideas?

8:59 pm on June 10, 2009 (gmt 0)

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tim222

In my usual roundabout way, that is what I was saying and what I have generally found using Excel and its graphing tools. Of course, who knows what the future will bring in terms of the constant increase of publishers sharing the same pie, ad blindness, more precise measurement tools available to advertisers, and other factors you and others have mentioned.

As a parallel, when I was a software engineer consultant in the 90's, it was a seller's market. $150-250/hour for 50 hour weeks was the going rate in my specialty. Then came outsourcing in 2000 and consulting fees were generally lowered across the board as a result, though other independent freelancing opportunities can now be created with a bit of intuition, luck, and hard work.

9:12 pm on June 10, 2009 (gmt 0)

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looks like we need a recovery in the goofing around market

I'm still waiting for those "Get Paid to Goof-off" ads... They should have a pretty high CTR.
7:48 pm on June 14, 2009 (gmt 0)

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My own earnings cascade started on 1st January this year and continued until the end of April.

CTR is more interesting. That started to dive in October 2008, levelled off in April, and has been increasing slowly through May and June.

Every publisher is different, and I picked up from these forums a change for some publishers that occurred in May.

I'm hopeful that an upturn (however temporary) is already happening for me. Fits with discussions I've had with off-line business owners. Everyone panicked, then things levelled off at half previous sales earlier this year.

1:21 pm on July 6, 2009 (gmt 0)

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Second half of 2010 should see some recovery. Economists warn of hyper inflation thanks to the billions of dollars printed by Bernanke.
2:43 pm on July 6, 2009 (gmt 0)

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MediaPost News is reporting this morning that, according to a Publicis advertising agency forecast, "Online Ad Spending Rises At Double-Digit Rates, Gains Share Vs. All Other Media." The MediaPost article [mediapost.com] says that Publicis has revised its forecast up from its last estimate in late April and is anticipating that Internet ad spending will grow 10.1 percent in 2009. Publicis predicts that search advertising will grow 20 percent this year.

Caveat: Just because the pie gets bigger doesn't mean that everyone will get more pie. If publishers' impressions grow faster than advertisers' budgets do, the average individual publisher's slice will get smaller. Other factors--such as placement targeting, the site exclusion filter, and impending changes to smart pricing (discussed in another thread)--could also increase the gap between the haves and have-nots.

4:44 pm on July 6, 2009 (gmt 0)

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> Caveat: Just because the pie gets bigger doesn't mean that everyone will get more pie.

Apparently I've been put on a diet :-(

5:28 pm on July 6, 2009 (gmt 0)

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I don't completely buy the thinking that an increase in the number of publishers leads to a smaller piece of the pie for existing publishers.

Consider: Advertisers are buying clicks, not impressions, and there are still only 10 spots on page 1 for any given keyword.

Stiffer competition for those spots is another matter, but chances are that many of these newbies will not pose much of a challenge for awhile, if ever.

6:20 pm on July 6, 2009 (gmt 0)

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and also... all those new people don't take equal pieces of the pie.

even if there is an increase of ten times more pages on the net, 90% of those might be smart-priced.
so whereas an advertiser might have paid one dollar for a click in the old days, they might now be getting it for 10 cents... so their advertising budget has effectively multiplied by ten.

their budget doesn't disappear any quicker just because they are finding it easier to get impressions.

8:56 pm on July 6, 2009 (gmt 0)

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Other factors--such as placement targeting, the site exclusion filter, and impending changes to smart pricing (discussed in another thread)--could also increase the gap between the haves and have-nots.

Funny, I recall that someone else said that a couple of years ago when Google began to offer more tools for the advertisers. Actually, his comment was more of a prediction, which seems to have come to pass. It looks like advertisers in general are learning how to use the tools that Google gave them back in 2007.

I agree with you on the slice-of-pie analogy.

10:16 pm on July 6, 2009 (gmt 0)

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I dont know whats going on lately but our EPC is at record levels across many sites. At the same time our traffic is lower then usual on these sites and CTR is lower.

1 year ago we began a campaign of removing ad colors that matched our sites colors and moving ads away from content so they can be easilly seen as ads and not content. Maybe that is finally paying off?

10:21 pm on July 6, 2009 (gmt 0)

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I don't completely buy the thinking that an increase in the number of publishers leads to a smaller piece of the pie for existing publishers.

Overall, on average, it should. But I wasn't necessarily talking about an increase in the number of publishers. I referred to an increase in the number of publishers' impressions. Most existing sites will continue to grow in size, and in many cases, their traffic will grow as well.

Add up the growth in impressions on those existing sites, then add in impressions from new sites, and you're likely to have a scenario that requires substantial growth in advertisers' click expenditures to maintain current average eCPMs across the network.

Mind you, averages are just averages. Smart pricing, placement targeting, the site-exclusion filter, etc. mean that averages aren't as meaningful as they were back in 2003 when AdSense was a lot simpler than it is now.

10:56 pm on July 6, 2009 (gmt 0)

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"i was wondering if anyone has some good guesses about when the upturn will begin."

uhhh, yes, hold on a minute...yes, yes,....i have it right here written down on a post-it somewhere.....oh yes, here it is...it says that the economic upturn will happen on Dec 4th around 9:30am in the morning. If that doesnt work, they say the next one may be 75 years away.

12:47 pm on July 7, 2009 (gmt 0)

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as the guy who started this topic, i must say that things have started to look up. the past week was actually my highest total ever.
...although i've had to nearly double my traffic to do it. if i was still on the same eCPM as before all this stuff started then i'd be earning double the amount.
2:48 am on July 8, 2009 (gmt 0)

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Google stock has nearly doubled during what some are calling "crisis".
3:06 am on July 8, 2009 (gmt 0)

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The upturn in general will not start until job losses stop and employment starts to increase. People will not buy with confidence while they see people losing their jobs. This applies to the USA, the UK, France, Germany, Spain etc.

If you read the news every day we see bad news on the jobs front.

2:47 pm on July 8, 2009 (gmt 0)

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I agree with Digimen, a drop in unemployment is the key.

What gets me, in the UK at least, is that all the financial pundits are saying that the worst of the recession is now over. But, hold on a second, at the same time they are saying that by the third quarter of 2010 unemployment in the UK will reach 3.2 million, that's a staggering 10% of the working population.

If 10% of the working population will be out of work, that means those in work will need to support them and that means higher taxes. On top of that, the mind bogglingly huge amounts that the government is borrowing will need to be paid back soon. And that means even higher taxes. Combine that with mind bogglingly huge amounts of extra money the treasury are printing (sorry, "quantitative easing") just to support the economy and we have a small technical problem with the recession being over.

It isn't in my opinion, I think we are all deeper in the cow manure than anyone in power is letting on. 2013 for the upturn, at the earliest?

10:53 pm on July 8, 2009 (gmt 0)

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Its normal that there is a lag in the improvement of employment numbers in a recovery.
(ie other indicators such as company revenue improves before the employment numbers improve - this makes sense as companies won't start hiring again until *after* things improve)

~ on a weeks holiday - the beach is lovely ;)

11:09 pm on July 8, 2009 (gmt 0)

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I agree with Digimen, a drop in unemployment is the key.

Ditto. With higher unemployment, there are less slackers browsing from work, and the ones left behind are afraid they're next to get the axe, so they're not goofing off as much.

2013 for the upturn, at the earliest?

Probably. Considering that the world is supposed to end during December 2012...

11:54 pm on July 8, 2009 (gmt 0)

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Probably. Considering that the world is supposed to end during December 2012...

Time to start up a Mayan calendar site I guess.

1:23 am on July 9, 2009 (gmt 0)

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What gets me, in the UK at least, is that all the financial pundits are saying that the worst of the recession is now over. But, hold on a second, at the same time they are saying that by the third quarter of 2010 unemployment in the UK will reach 3.2 million, that's a staggering 10% of the working population.

On the other hand, I saw an article recently that said most UK home mortgages have variable interest rates, and because interest rates are dropping, many UK home owners (the ones who are working, anyway) have lower mortgage payments and therefore more disposable income than they did a year ago.

Then again, the pound has been weak lately, and that's going to affect some consumer spending (such as foreign travel to the euro zone).

5:27 pm on July 10, 2009 (gmt 0)

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It may be that this recession is not like previous recessions. Normally, employment would be rising by now but, as we know, it's not. Economics, like many fields of study, is based on past models, which may not apply in this case.

Short answer: When the cows come home.

6:00 pm on July 10, 2009 (gmt 0)

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While I have found that ad income is strongly connected in an inverse manner to unemployment, in the bigger picture the turnaround will be fueled by the psychology of those 80-85% (guessing here, as official stats are unreliable, and vary by country, of course) who are employed as much as they wish they could be. If Joe and Jane Smith are not worried about losing their jobs, homes, health care, etc. in social Darwinian countries such as the U.S.-- where many are one or two paychecks from utter ruin--they obviously will feel better about making (major) purchases. People are finally saving, which is a rational act in these times, though not in the interest of publishers.

It would certainly help if the G-8/G-20 leaders could get it together to develop semi-coordinated confidence-building stimulus plans where excessive money spent on war-related dead ends could be invested in "green" technologies and, in the U.S., on education for all its citizens (not just the more privileged), which is so necessary to compete on the global stage. But that is pie-in-the-sky thinking when countries such as France and Germany are becoming increasingly protectionist and others are clearly guided by the politics of extreme self-interest and self-preservation.

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