Your AdSense Earnings Less in 2012 than in 2003?

[martinibuster]

I made more in August 2003 than I did in August 2012!

Someone posted the above statement in the August 2012 AdSense Earnings Observations [webmasterworld.com] thread. There is a lot going on in that statement. The question to think about is, what got us to the point where some are making less today than they were nine years ago? It's intellectually lazy to scoff that web publishers are making less in 2012 than in 2003 because of the economy. This is how we miss the truth, by scoffing at the obvious without looking at what's happening deep down. Number one, there are billions more ad dollars being spent in 2012 than there were in 2003. On page 7 of this report of online ad spending compiled by the Internet Advertising Bureau [iab.net](IAB), their measurements of online spending in the U.S. show that in 2003 there was just $7.27 billion spent on Internet advertising. By 2010 that figure had risen by almost 400% to $26 billion dollars. By other measures, global 2011 advertising spending grew by almost 17% over 2010. IAC had a great second quarter, whose earnings rose by 40% [hollywoodreporter.com]. Google had a great 2nd quarter, too. Google's paid clicks increased by 42% [zdnet.com]. How does that compare to your paid clicks? It's not the economy. Clearly the world has changed, but not in the way you might suppose. The world has changed to the extent that more money is being spent on online advertising today than at any other time. So what is going on?

A major problem with the AdSense program is that it is poorly promoted. Now ask yourself, how does Google benefit from an AdSense program that underperforms? Let's count the ways:

1. AdSense doesn't siphon off ad dollars from the AdWords program
Google makes more money from the AdWords program. Make no mistake, the AdSense program competes for limited advertising money with the AdWords program. A weak AdSense program keeps more money in Google's pocket.

2. AdSense is good for Google because it's bad for affiliate programs
Think about it. Why would Google create a competitor against affiliate programs but not promote it to it's advertising clients? Because the AdSense program increases advertising inventory at the expense of affiliate companies. Affiliate programs were competitors for advertising dollars that Google would rather see flow to them. But competitors compete with advertising inventory. AdSense gave Google a way to lock up advertising inventory and keep it from their competitors. By not promoting their AdSense program, whether they planned it or not, Google created a way to keep advertising inventory from their competitors while simultaneously not allowing it to compete with their more profitable AdWords inventory. That's a win-win for Google AdWords but a lose-lose for web publishers, affiliate companies, and ecommerce sites that would otherwise be advertising on pay for performance affiliate networks.

3. AdSense is good for Google because it is bad for competing search engines
For awhile the AdSense program blatantly allowed spam sites to participate in their program. Why? How did it benefit Google to host thousands of copyright infringers and article spinners in the AdSense program? One benefit is that it was bad for Yahoo and Bing. AdSense Spam flooded the index of Bing and Yahoo. There is no smoking gun where someone at Google admitted as much. But the reality is that for a time AdSense was a defacto weapon against the other search engines, a weapon that degraded the search indexes of Google's competitors.

4. Data, data, data... and more data
Mediabot, for "bandwidth saving purposes" shares data with the search index. I am not saying that Google shares AdSense information with the search department, particularly which sites are connected. But the associated data is very rich for identifying spam networks, linking patterns, etc.

When someone posts that they are earning less in 2012 than in 2003, it's easy to dismiss it that the world has changed. It's too easy. But then again it's always more difficult to take a moment to think things through, so one can't be faulted for dismissing such a statement. But if you do dismiss that statement then you'll miss out on what's really going on behind the scenes.

[edited by: martinibuster at 2:57 am (utc) on Sep 13, 2012]

[Play_Bach]

Great post! Thanks for summing up much of what I've been wondering about so well.

[Reno_Chris]

I certainly agree that there are many potential causes and effects swallowed up in the formative statement of this thread.

There are also many other strong reasons why a significant number of sites are generally trending down in Adsense income. Some have nothing to do with Google's conflicting interests in promoting or not promoting the Adsense program. Since 2003, Adsense has become far better known among website owners and while ad spending dollars have certainly increased as the OP pointed out, at the same time the number of participants in the Adsense program has also increased astronomically, so there is far greater competition for those same dollars. Over the years, many site owners wanting to increase their Adsense income adopted similar website design styles and similar user created content formats - because it was easy to do. Some of these styles have been depreciated by the G search team as low in worthwhile content through updates like Panda. Others have fallen victim to just too much competition from similar websites.

While there are many sites with generally down trending Adsense income, it is certainly not universally true.

[Lame_Wolf]

Clearly the world has changed, but not in the way you might suppose.

Really? Lets not forget the wars, huge redundancies, long existing shops that no longer exist, fuel bills going through the roof, food bills shooting up. People, esp in the UK, do not have the money to spend like they did back then.

The world has changed to the extent that more money is being spent on online advertising today than at any other time. So what is going on?

Can't comment on that because I have done better each year.

[londrum]

i've done better every year as well (doubled it every year), but only because i've managed to increase my traffic. if i look at my CTR and eCPM they are all massively down. so you have to constantly pull in more and more visitors to get anywhere.

i think its mainly to do with the economy as well. everyone thinks the big downturn happened in a few years ago so it must be over, but we've never bounced back (im in the UK). i think its just as bad as it was back then, and it's not going to get better any time soon. ive just seen on the news that they reckon growth will be 0% this year. maybe americans are spending more ad dollars but not everybody's visitors are american

maybe the total ad revenue has gone up, but that's a bit of a red herring because we don't have access to every single ad. you can only make money off the ads in your sector, which is a tiny-weeny percentage of the total. if our individual advertisers are spending less then there's fewer quality ads to go around, so less clicks, and less money.

[netmeg]

All these things make sense (and I am making a lot more from AdSense in 2012 than I did in 2003 - partly cause I didn't join it till 2004 or 2005, can't remember) but I don't think it replaces any of the other reasons (including the economy, although I believe that's had the least impact) why AdSense doesn't work as well as it used to for some.

Of course, as always, the question is, what are you going to do about it?

[IanCP]

Comparing August 2012 with 2003?

Page Views [minus] 70.04%
Clicks [minus] 91.63%
CTR [minus] 71.85%
EPC [minus] 40.70%
RPM [minus] 83.50%
Earnings [minus] 95.05%

Page views largely reflect the Google Zoo. The clicks and CTR would reflect tightening the click area etc which we all know. EPC I can't fully explain but the rising $A would account for most of it.

RPM and Earnings reflect all of the above.

[incrediBILL]

A major problem with the AdSense program is that it is poorly promoted.

How can you claim the largest advertising program to ever blanket the internet with advertising in the history of the internet (to date) is poorly promoted?

It's like a poison ivy rash, it's everywhere, mostly where you don't want it.

People, esp in the UK, do not have the money to spend like they did back then.

Can't comment on that because I have done better each year.

If people have less money to spend than previously, how are your earnings increasing each year?

Does not compute.

[martinibuster]

How can you claim the largest advertising program to ever blanket the internet with advertising in the history of the internet (to date) is poorly promoted?

What you are referring to is the promotion of AdSense to publishers. What this discussion is referring to is the lack of promotion of the AdSense program to the advertisers.

Here's an example. Go to the External Google AdWords Keyword Tool. It helps advertisers target keywords and their associated trends across Google Search. There is no such exernal tool to help advertisers get the most out of Google's Publisher Network.

Yes, there is an internal tool for contextual advertising, but why don't they get behind the publisher network and put an external tool out? Is it because it's confidential information? Why isn't that the case with the keyword information? Is it an oversight?

Even in Google's Support page for the Internal placement tool [support.google.com], a tool for finding sites to place ads on the publisher network, Google still promotes one of it's own sites, YouTube:

You can use the Placement Tool to help you find placements in the Google Display Network that are relevant to your ads. For example, you can use the Placement Tool to find a video placement on YouTube or look for websites about a specific topic.

On a support page that is supposed to help advertisers place ads on the publisher network, Google appears to be subverting the publishers by subtly promoting one of it's own websites, YouTube. Is it just an innocent coincidence? Perhaps. Or is it evidence of Google's preference for it's own network?

Before anyone starts putting any labels or motives on me, I am not anti-Google. My sites rank exceptionally well. I don't wear a tin foil cap. However I believe any organization will benefit from constructive criticism and the above is posted in that spirit. I believe it is good for publishers to discuss the network, and that is what this forum is about.

[Lame_Wolf]

People, esp in the UK, do not have the money to spend like they did back then.

Can't comment on that because I have done better each year.

If people have less money to spend than previously, how are your earnings increasing each year? Does not compute.

Yes it does compute.

For starters, most of my clicks come from the US, not UK.

Secondly, the amount of sites I own have grown over the years.

Thirdly, I only have adverts on about 20% of the [main] site. If my money dips, I place adverts on some pages that haven't had adverts before. If I earn more than is needed, I remove adverts.

Simples.

[ember]

I am making much more today via Adsense than I was in 2003.

[Robert Charlton]

For starters, most of my clicks come from the US, not UK.

Ah, 'the land of milk and honey'. Don't imagine that the economy is all that great here.

[Lame_Wolf]

Ah, 'the land of milk and honey'.

No, as per info given by Adsense. Most of my earnings come from there. I have never seen the USA as a place of milk and honey, even before the recession.

Don't imagine that the economy is all that great here.

I am extremely aware of what is going on over there. I have friends and family there.

[buckworks]

but only because i've managed to increase my traffic

That's a big issue. For publishers, there's more competition for eyeballs than there used to be.

I see this from the advertiser's side, too. We already spend more on the content network than on search ads, but in both cases we have to balance the cost of our clicks against how many sales we get from them.

If we miss the balance point we'll lose money. Conversion rates create a natural constraint on how much we can pay per click.

A smart advertiser will monitor the conversion rates from different traffic sources, and will organize their campaigns so they can bid more aggressively if they discover a "conversion hot spot".

If your traffic converts better than average for me as an advertiser, I WILL try to bid more for it.

The reverse is also true ... sites that send lower converting traffic get lower bids, or even blocked from showing our ads.

My biggest exclusion list has over a thousand sites.

[ap_Rhys]

buckworks

From your side of the equation can you see the effect of interest-based ads on conversion in comparison with those on websites about relevant subjects?

Are ads for 'widgets' visibly converting worse on pages about 'bananas', 'pancakes' etc than those actually focused on 'widgets'?

Might be an additional reason why people with non-targeted websites are doing well while those with targeted pages are doing worse.

[buckworks]

can you see the effect of interest-based ads on conversion

From the advertiser's side I can't usually tell if ads were served because of interest-based targeting.

Once in a while a clearly off-topic site gets a few impressions and shows up in the reports, and I assume those are interest-based. But if there's a way across the board to distinguish interest-based ad impressions from normal keyword/theme targeting, I haven't figured it out.

The one place I can reliably see a difference is with our remarketing campaigns, which I suppose could be considered a sub-category of interest-based. They're targeted by the historical fact that the user already visited our site. Those campaigns are small but they convert well.

As far as I can see, the vast majority of our content-network impressions and conversions look like they're coming from normal on-topic pages.

[MrSavage]

I'm doing worse in 2012 than in 2011. Let's say that much? Instead of moving upward year after year, I'm moving back significantly.

Everything is just a theory. I just happen to think mine is correct. It's quite simple.

When you can see an ad about real estate services when you're visiting a website about how to cook turkey, isn't it pretty clear? It's called ad relevance. The whole key in the past was making your content clear so that the ads would be RELEVANT to YOUR content. The more RELEVANT the ads, the more people clicked.

In reality who gives a S if 2 hours ago I searched and was looking at books. If I'm on your site about cooking, guess where my freaking head is at? Yeah, cooking.

Yes things aren't going back apparently but the only place you appear to get relevant ads is where? Answer is? Yeah on the Google search result. People click those because. Golly they are completely relevant to what you were searching for. Imagine Google putting ads on search about bikes when you were searching for restaurants.

Tell me that's not F up and I'll look for more theories. I won't because there is just a bunch of rhetoric about the subject. People made money in the past from Adsense and people clicked on their ads when the ads were completely relevant to their content.

It's like trying to sell shoes in your store when you have a store front and sign that says "Simple Pie Pizza". Yeah that works all right...

[Play_Bach]

+1 MrSavage

The gumbo mess of off topic ads hailed the beginning of the drop in my AdSense earnings, no doubt about it.

[dhaliwal]

MrSavage has said it correct. I would support that point as the ads are not relevant. But, ads on their search pages are very much relevant to search keywords.

Maybe, thats the plan of Google to make more money from its search network.

[MrSavage]

Well to point out the asinine nature of this situation, think about this.

When have you typed, I dunno, used cars into Google search and see ads on the results page for, I dunno, restaurants for example wouldn't that be odd? Like, when does that ever happen? My website obviously doesn't follow the same guidelines because my site is about cars but people are seeing ads about, I dunno, how about cosmetics?

You can't argue with idiotic situations for which you have no control over. I just wonder though if you start seeing ads on Google search result pages for cars when you are searching for cosmetics how long that might last before somebody said something. They might think geez this is kind of weird. I wonder how many people would be clicking those ads should they be as irrelevant as mine on my site that I'm serving to site visitors. Ah yes, but there must be more to it. Uh, really?

[netmeg]

Google's not in it NOT to make money, so it must work across the board. Perhaps it depends on the niche. I for one would be out of business if Google served ads that were 100% relevant to some of my sites. I get ads that are relevant to my *audience* not my site, and that has worked out pretty well for me (specially this year).

[ap_Rhys]

I for one would be out of business if Google served ads that were 100% relevant to some of my sites. I get ads that are relevant to my *audience* not my site, and that has worked out pretty well for me (specially this year).

Which is one reason why some people with general, wide-ranging or untargeted sites are doing well and others with expert content sites are doing badly.

Makes no financial difference to Google where their ads appear but probably gives Google better relationships with large organizations - the ones with commercial clout.

[Play_Bach]

Google's not in it NOT to make money, so it must work across the board. Perhaps it depends on the niche. I for one would be out of business if Google served ads that were 100% relevant to some of my sites. I get ads that are relevant to my *audience* not my site, and that has worked out pretty well for me (specially this year).

Thanks netmeg. I was thinking about this yesterday afternoon as I was driving off to attend a wedding. For example, what is it about fireworks anyway? First thing that comes to mind is that it's not really a product as much as it is an event (a very popular one here in the USA on July 4th). So having a wide base of advertisers and a ton of traffic is a winning formula with this new AdSense set up.

Unfortunately, my site is very niche specific and so the shift from having site relevant ads like in the past to this general ad blanketing has resulted in a ten fold drop in clicks and corresponding income loss. Kudos to you again for getting it right.

[MrSavage]

If I get somebody to buy pizza in my store when the front of my store front and sign says "Shoes By Savage", then those people really really like pizza. Advertisers will likely be getting a S load more impressions (not having to pay) with fewer clicks but those clicks will be better converting. Right? If somebody buys pizza from a shoe store then that's obviously the "quality" traffic Adsense wants from us.

So the answer is that people with sites about A-Z can do well, but people with sites about A are going to suck for the most part?

Whatever the case it's stupid. If your site is about A-Z then local ads make sense and Google should figure that out. However, given the way this works now, shouldn't your site in LA see ads from Dallas if you were looking around Dallas websites lately? Ah but apparently the system is much smarter than that.

So the answer is?

Again if this is such a great idea why isn't it being implemented on search result pages?

To be counter intuitive on this, and this is the opposite of what's recommended, but perhaps blocking every category of ad that isn't related to my site content is a worthwhile experiment? I suppose that's the ultimate control. Then again I'm guessing that means .01 clicks and or blank ad spaces because an ad couldn't be found for that spot.

I suppose the way to get converting clicks is to put an ad in a bizarre spot. Put it in a situation where it doesn't make sense. If a person show interest in that situation and clicks, they must obviously be very interested in that item. There are many real life examples where this system makes no sense whatsoever. If it's so great then of course Google would be using it on their homepage. However, that's not the case. And I would bet 2 nickels that the best converting ads are... on the Google search results. We all know why those are the best converting. I simply can't understand why it makes sense to have irrelevant ads showing on my site and why this is the "new way".

[londrum]

google aren't going to change it, so you just have to work with it. interest-based ads make them more money.

imagine a situation where a supplier wants to advertise his "golden widgets". there are only so many golden widget sites on the web. so google will only get money out of the advertiser so many times.

but with interest-based ads they can potentially show the ad everywhere. they are not limited to certain types of site anymore. they can get much more money out of the advertiser, because the extra clicks will blow through his budget quicker.

as a publisher, we just have to accept it even though it might not do us any good. that's just the way it is.

[ap_Rhys]

but with interest-based ads they can potentially show the ad everywhere. they are not limited to certain types of site anymore. they can get much more money out of the advertiser, because the extra clicks will blow through his budget quicker.

Does this mean that advertisers are being ripped off?

[steve40]

Big G has so many more of their own properties to show adds than back in 2003 ( Gmail, Youtube, Maps, Places Etc. Etc why do you think they are continuing to push Google + ) plus they show more adds on their search results above results and below the results and at the side.

They are a business when all said and done and have shareholders, they continue to increase profits each year because they continue to show context related adds which in turn leaves less for publishers so unrelated personalized adds follow the visitor around.

All the while they continue to dominate the market they will continue to increase profits even during a poor economy.

Do I like it NO but it is currently their ballpark and I have not seen any other company making inroads so we live with it and have to accept that is the way it is.

I suspect the reason they are no longer promoting publishers is they do not want to dilute their own earnings by facilitating advertisers who could pay less per click and Google would only get a percentage of the click.

Only time will tell if it swings back in favor of the publisher but I suspect never back to the heady days of 2003 to 2007

[Leosghost]

Where the visitors you used to get in the "old days"and the ads and the clicks you used to get have gone..you tube and ehow
[wired.com...]
the article is still largely valid..
Panda hurt ehow for around 3 to 6 months, then they changed their model , they still pay people to rip of your content on subjects that they know nothing about, what they did was change their page layout to avoid panda..then they got into bed with Google to make videos for youtube on contract.. and gained themselves a free pass from future panda runs apparently..because they are waaay back up there with scraped, human respun content, ruling the serps again..

Google reps avoid talking about ehow in public, they change the subject, ignore the question, or say that they don't discuss individual sites in public in relation to their algos,..but they do talk about other sites, by name sometimes, strange that ;-)

Between ehow, Google's own properties and personalised ads..what independent adsense publishers can expect is far less than it was..

There are other lesser factors, hence not everyone has had a drop in income, but these are the major factors in the falls in adsense income..

If you put any search term into Google "signed out" and you use the personalised search parameter limitations ( so that only GEO IP targeting may affect your results ( this has been posted many times here ) ..how to see what the underlying non personalised results are ?
* * *
copy the below

[google.com...]

paste it into your address bar,

click to "refresh" the page..

the address bar will now read

[google.com...]

now put "whatever term" into the search box

click search..

Try many search terms..

See how many times youtube and ehow are waaaay above anyone else..

That is the base line SERP..non personalised..everybody's personalised SERPS are a "tweaked version of that" with more or less youtube and ehow in the mix, depending on their personalisation..

That... Publishers ...is the real face of "the competition"..like when you mix acylic paint, you change the colour by adding pigment, but the "liant" ( binder and drying agents, gloss or mat additives are always the same, just their amounts vary a little with each different personalised colour that you mix )..other independent or small publishers are not nearly so important to your site(s) position, as G properties and ehow..

[buckworks]

Does this mean that advertisers are being ripped off?

No, it doesn't. Advertisers only pay if their ads get clicked.

Interest-based ads are not spewed around randomly, which some people seem to think. They show up because the algo has reason to think that particular user would be interested in that particular ad, AND the advertiser is bidding high enough to get past whatever ad(s) would otherwise appear from normal keyword/theme targeting.

[Leosghost]

Advertisers only pay if their ads get clicked.

Apart from those advertisers who are buying CPM for branding..

CPMs, which can also be served as personalised ads and be on your site(s) if Gs algos consider there are no alternatives ads available, or that the other advertisers have exhausted their budget at that time, or no other advertisers have targeted your GEO IP etc etc..

I see many obvious CPMs on many sites..