I just wanted to share an interesting experiment I did recently. In the past I have always been an advocate of diversifying income streams. Don't put all your eggs in one basket I would always say. I monetized my site the same way:
- Google Adsense
- TribalFusion for CPM banners
- VibrantMedia for in-text links
- Various other affiliate product partners
This I felt was a stable way for me to maintain income in the event that one or more took a dive. I was minimizing my exposure to risk.
Well years rolled by... and I slowly watched the landscape and economy change. My traffic was steadily increasing over this time, but most of my ad revenue partners were paying out less and less:
-- Tribal started earning less and less. They also started becoming difficult to manage as I would get complaints from users weekly saying the ads were trying to download spyware on their machines.
-- Vibrant's in-text ads started earning less and less and less each month to where they were earning far less than generic CPM banners.
-- Affiliate product sales never seemed to keep pace with my growing traffic.
The only revenue stream that seem to keep pace was Adsense. The more traffic I had, the more money I was making from them.
So it hit one day. Why am I diversifying with ad networks that are paying less and less as I drive more and more traffic to their ads?
If I'm worried about Adsense going away tomorrow, well then I'll just fall back on these other networks if that day comes. But until then, I'm going to try and utilize the best paying network in the most places I can on my site.
So here is what I did:
1. Replaced all CPM banners with Adsense display ad units. Instantly saw a 50% increase in eCPM.
2. Removed in-text links. No replacement. The payout had dropped so low it just seemed to be more annoying to visitors to have those ads versus none at all. Plus I might get more clicks to my Adsense ads, which were more pleasant and relevant ads.
3. Replaced my affiliate product ads with Adsense Link units.
What was the end result? Well, my revenue stream diversification is down the tubes, but my monthly revenue is up. In all fairness, there was some other changes that took place during this trial (new Adsense layouts rolled out, etc). But before that, I was still making more money per month as a Adsense only shop than when I had been diversified with 3 -4 different ad networks.
I realized I was living in a false sense of stability by thinking that spreading my revenue sources out was the most stable and lucrative model for my business. In reality using the highest paying partner for as many channels as I can ended up being the most lucrative and stable option, since Adsense has been the most stable of the ad networks (for me) over the years.
And if Adsense goes away tomorrow, I can always fall back on the other networks. So my risk is not any different if I diversify my revenue streams or not.
This may sound like common sense to most, but I guess it took a few years for me to see it and try it out.
For those of you that fall into a similar category as me, it might be worth looking into.