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Ever since Google first allowed Analytics to be linked to AdSense, I've been exporting the data from Analytics into my web site's database so that I can easily see which articles and which writers are bringing in the most ad revenue. When I first did this, I was shocked at the disconnect with the amount of readers an article received and the amount of ad revenue it brought it.
Many of the most popular subjects earned very little from AdSense, and many un-noticed niche articles with little traffic earned a lot of revenue.
I tried to consciously change my way of looking at writers, because the the ones that got all the attention were not the ones bringing in the revenue. For example: political commentary and current events have been the worst paying topics of all.
For the past 6 weeks or so, I've noticed something different: Ad revenue has evened out among the writers. To a much greater extent, ad revenue is proportional to the number of readers a writer receives on their articles.
The only explanation I can come up with is that this is because of interest based ads. CPM has gone up a small amount over this period of time. It seems that ad revenue has been evened out across the many topics.
My understanding of interest based ads is that the ads will be matched to the interests of the person viewing the ads, not the content of the page on which the ads are displayed. This could explain why political commentary and current events pieces are now bringing in close to the same ad revenue as real estate advice.
Are there other obvious explanations that I'm missing? Is anyone else seeing this?
Two effects of this I think should be pointed out:
1. If you operate a web site with a niche topic which pays out higher than average CPM, this could make your earnings go down.
2. This could be a windfall for newspaper web sites which primarily display news and current events information.
It's as if a tourist interested in five product niches wanders into town and visits all five of the niche stores one by one and makes a lot of purchases (obviously a context-based advertising model).
Then he goes and sits on a bench outside and eats his picnic lunch, not expecting to buy anything (comparable to landing on entertainment-oriented content), except the owner of one of the rollerblading stores has followed him out and has sat down next to him. After lunch, the tourist goes to that store and buys another set of rollerblades.
Now, the rollerblading store owner realizes he can reduce his store hours (niche advertising budget) because he can reach customers outside his physical store (in other words, outside the smattering of niche content on the Web). So, no longer physically restricted by a storefront, he worries less about competing against the other rollerblading stores around and spends more time figuratively fishing, throwing lures to the wind....
All the stores in town follow suit, until the storefronts begin to slowly rot from disuse and disrepair...hmmm, not a pretty picture for niche publishers.
The suitability of interest-based ads for non-niche subjects is why I think Google AdSense should offer different kinds of targeting on different kinds of websites instead of making us choose one or the other. Once they do, there should be a virtual explosion of certain kinds of content that were hard to monetize before--including but not limited to news content.
I'm still not sure what will become of niche content. Maybe if there's a uprising by the tourists, who don't like to be followed about...?
And by the way--thanks for posting these stats. Been waiting, vulture-like, to hear reports on interest-based advertising. I opted out at the beginning because I'm a strong niche writer (in part at websites like yours). Anyone else have any stats to share? (swooping low)
I have an alternative explanation, that I think works without resorting to interest-based advertising. Basically, I saw something similar happen on my site, long before IBA came along. The site is a fairly small niche, but years ago ads tended to cluster around 3 or 4 related but distinguishable topics. One of those clearly paid significantly more than the others per click. Over the course of a couple of years, those better-paying ads began to appear throughout my entire site. CTR went down because they weren't as relevant in other areas, but they were relevant enough that they did get clicks. Overall income didn't change much, but this was in a time when many site owners were seeing their income go down, so the effect, arguably, was positive.
Something similar may have happened to dataguy.
I think dataguy that you have an interesting theory. One argument I have against it though is that I have a variety of sites on diverse topics, and I haven't noticed any drastic changes in the average CPMs. My low paying topics are still low paying, and my high paying topics are still high paying. So if your theory was correct, then I think that people like me with diverse topics spread among different sites, as opposed to someone like you with diverse topics on one site, would also see a melding of average CPMs. But for me that hasn't happened.
I'm not saying your theory is wrong, and it certainly is a logical possible conclusion based on your analysis. But you couldn't prove it by looking at my CPMs, either across my sites or even across my pages on each individual site.