Revenue Sharing

[csdude55]

I spoke with a Google rep a few weeks ago who informed me that their old system of revenue sharing (which was extremely complicated) has been deprecated and no longer works.

Which is unfortunate, because for the last year I've been working with partners and developing a system that revolves around the ability to share revenue with them! LOL Just my luck, I guess.

By "revenue sharing", I mean that partners were going to generate content on my websites, and I would give them a percentage of the Adsense revenue generated from their content.

The only suggestion that the Google rep had was to create a channel for each partner so that I could track how much they earned, then cut them a check each month. The downsides to that:

1. I have the potential for hundreds of partners, and this would force me to create a channel for each one manually instead of an automated process;

2. the partner wouldn't be able to see how much money they generated, and would just have to take my word for it at the end of each month;

3. since the money would come to me and then sent back out, I would have to pay taxes on it, then they partner would pay taxes on it again.

Can you guys suggest any other way that I can set up Adsense revenue sharing? I'll be using DFP (against my wishes, honestly), so I'm open to any system using Adsense, DFP, or any other program that might work.

[MayankParmar]

Just put the one or two ads from your partner's AdSense account? It works very well.

[LifeinAsia]

I would have to pay taxes on it, then they partner would pay taxes on it again

You would also deduct the amounts you paid to your partners as expenses, so your amount subject to taxes should be the same.

I've always felt that Google's lack of an easy way to do revenue sharing (and now even more so) is a huge opportunity for someone else to come in and take over that part of the market. It's a lot more work (but potentially a lot more money), but getting direct advertisers would probably be your best bet unless/until someone else comes along with a better mousetrap.

[csdude55]

Just put the one or two ads from your partner's AdSense account? It works very well.

It's my understanding that that wouldn't work anymore because their account wouldn't "own" my site; I would. It's been a long time since I set up my account so I could be wrong, but wouldn't they have to create the account, verify that they own my site, and then get approved?

And since they would only be getting revenue from the pages that they create, would that negatively impact my earnings for the rest of the site?

Also, this method assumes they get a 100% revenue share...

You would also deduct the amounts you paid to your partners as expenses, so your amount subject to taxes should be the same.

Excellent point. I just spoke to my accountant today, and she said that same thing :-) Wise you are!

getting direct advertisers would probably be your best bet unless/until someone else comes along with a better mousetrap.

That's a whole 'nuther conundrum. I do sell local ads on my sites, and they do pretty well, but only about 1/5th as well as Adsense. And they take a lot more work (direct sales, customer service, etc), where Adsense is just... well, free money with no extra work.

If I made enough from it to justify hiring a salaried salesperson and partner manager then it might work out, but that's probably going to be awhile down the road :-/

[child please]

Why would you pay taxes on the revenue that you are paying someone else? It would be like paying an employee or independent contractor. That counts as an expense which deducts from your overall revenue. If taxes worked like that, we'd all be getting screwed!

Edit: Whoops, it would serve me well to read all the responses before replying like a lunatic. Sorry.

[topr8]

>>Also, this method assumes they get a 100% revenue share...

i think the idea is that you only serve those ads on the pages they create and say you are splitting 50/50 then half the time show their ads and half the time your own - this is pretty easy to do assuming you are using php or any other server side language to generate your pages.

[csdude55]

I gotcha, topr8. But if they don't already have their own website (which most of my partners would not), can they get approved for an account while using my domain... that's already approved for my account?

I REALLY don't want their money coming to me, it's just asking for trouble... I would much, much rather Google pay them directly, so if they can get approved for an account using my domain then I'm cool with that.

[LifeinAsia]

can they get approved for an account while using my domain

We are working with one blogger who we allow to use his AdSense code on the content he creates on our site. We have the capability to set a percentage of time that we swap out his AdSense code for ours (although in this case we allow him 100%). He does not have his own site, although he created his AdSense account years ago. So I don't know what the current requirements are for creating new accounts.

[steviec79]

Just use something like Ad Rotate. You share your ads % of the time and the other person the remaining %.