Google Updates to how publishers monetize with AdSense: CPC to CPM

[LucasPerez]

New news

[blog.google...]

[Conro]

Is bad or not?

[kegnum]

Looks like they will no longer show ctr or cpc... Hiding stats is never a good sign for the publishers. That is what they are doing regardless of how they frame it.

[ChanandlerBong]

they're doing this either to make a bit more money or a bit less money.

a shiny dollar to the first person to guess the correct option.

[CommandDork]

As always, it's a "wait-and-see" to see how things turn out by end of 2024. Maybe good, maybe bad.

But Publishers are waaaay down the totem pole so I'll remain pessimistic.

[not2easy]

Since they say they are changing to pay per impression rather than per click, they have no need to show your ctr because they will be paying per impression even if you have a low 'CTR":

This is why we are making two changes: updating AdSense’s revenue-share structure and moving to paying publishers by impression. These changes will provide a consistent way for publishers to compare the differing fees across the various technologies they use to monetize and will provide even greater transparency into the media-buying process.

Based on our tests, we don’t expect publishers to see a change in their earnings as a result of these updates.

It is clear what is changing, but you would need to read the article.

[Vishal]

How would this work for high CPC fields, i.e. if you have a site in 'injury lawyer' category, vs. a site in 'cooking' category? I assume, giving both sites same $$ for CPM would suck.

[netmeg]

"We're from Google and we're here to help you!" Honestly, I'm surprised it took them this long.

[breeks]

I think the bottom line is it will make more money for Google, or they would not be making the change.

[Skips]

The only thing this is clear is that this is meant to make more money for Google. Just because that's what corporations are for - create money for shareholders in the end of the day. What remains to be seen is how this change will work out for publishers. CPM-based can be a good thing. Especially, for cases when you are fed cheap ads that tend to have quite low CTR as well - because advertisers with low budgets don't typically hire professional teams for creating good ads. So, if we would be given a predictable CPM that would be great - earnings would be predictable and proportional to the work we do by creating content and attracting traffic. For example, I could work with 2.50 CPM. However, somehow I think this is going to be exactly the least transparent and least predictable area and we're going to see same unpredictability and variations with CPM as we have now with CPC. Hate being pessimistic, but as the saying goes: a pessimist is a well-informed optimist :)

[ember]

I don't get tons of traffic but I have a high RPM so it all works out. If I get paid the same as I do now, fine. If I get paid some lower random CPM based on category or astrology signs or whatever, then not fine. Just wait and see, I suppose.

[Andem]

I have a really bad feeling about this.

My main concern is that we've spent a lot of time over the years trying to find an optimal user experience with ad placements and have done really well with such a limited number of ads but pretty good engagement/CTR surrounded by high quality content. Targeting is usually pretty spot on, too.

Are we going to have to switch from a great user experience to just filling up the page with ads without having to think of where they may provide advertiser value?

I really can't see how this is helpful to advertisers or publishers nor how it helps AdSense's competitive advantage over the countless other networks.

It's probably the first time in 20 or so years that I'm actually thinking seriously about finding an alternative to AdSense. I've given some other networks a go, but mainly CPM-based and never came close to what AdSense has done for us.

[fearlessrick]

The last two years have largely been a waste of time for me, and the latest blow came late in October, as I've largely been de-platformed by our overlords. I was hoping to make the minimum by the middle of November (I'm about $8 short), but these last four days have been the absolute worst since i started back in 2005.

I'll be lucky to make $1.00 since Monday, including today. I have well over 3000 pages on my site. Google is showing page views of less than 300 a day. That's simply not possible, considering just a week ago my page views were 3,568. It's quite depressing, but, as most of you know, once you get on G's bad side, you get the shaft.

Well, it was a good run for almost 20 years. Kind of sad, the way people operate these days.

[Conro]

As far as I know, the advertising agencies that pay the best don't pay per click but for impressions. However, Google claims that earnings should remain the same even if you switch from impressions to clicks. It seems that YouTube also generates income through impressions rather than clicks. Perhaps Google has observed that it's more profitable or that there is a higher demand from advertisers for view-based advertising rather than click-based advertising.

[Senechal]

Here's what's changing:

1. The percentage of AdSense Revenue that Google takes is now being separated into two categories:
* Inventory purchased on the Google Ads platform: Pubs keep 67%
* Inventory purchased on 3rd party platforms: Pubs keep 80%

2. AdSense is moving to CPM


My takes on this:

Regarding the shift in revenue percentages: The only change here is in third-party platforms. The revenue cut Google takes from Google Ads revenue isn't changing. So Google is passing on a larger cut of third-party revenue to publishers, so overall I consider this a moderately good improvement — depending on how 3rd party platforms react. Keep in mind though, that most 3rd party platforms are likely to see this as an opportunity to take a larger cut.


As for the shift from CPC to CPM...

This is pretty huge... but it sounds like Google is taking steps to mitigate the impact to publishers.

Obviously, this could play out in a few different ways, depending on how Google charges for CPM on each site moving forward.

One possible analysis is:

Does your site have a large amount of impressions but a low CTR? That *could* benefit you if CPM's were to stay the same.

The trouble is, that's a big "if", because:

Based on our tests, we don’t expect publishers to see a change in their earnings as a result of these updates.

The fact that Google predicts that these changes will have a relatively neutral impact on publisher revenue, suggests to me that they've taken the potential revenue impacts of this shift into account, and they'll be modifying each publisher's CPM accordingly.

So a low-traffic site with formerly high CPC's *should* get a high CPM. And a high volume site with a low-interaction rate, *should* see a relatively lower CPM. But obviously... we'll see how this plays out.

Most importantly ... don't forget the elephant in the room...

What wasn't mentioned in Google's post is the most important event on the horizon for publishers:

Chrome will be phasing out 3rd party cookies beginning in "Early 2024".

Early 2024 just happens to be the same time the above revenue / CPM changes are expected to go through — so one must assume this is all part of one giant shift for AdSense.

Why is this important? Because industry-wide CPM's will likely fall the moment 3rd party tracking is curtailed. (Advertisers aren't going to pay the same amount for less-targeted traffic). So while the above changes from CPC to CPM, and percentages of 3rd party revenue might have some bearing on publisher revenue, the elephant in the room is still the coming Cookie-pocalypse, which will most likely collapse the total net revenue spent on online advertising annually.

To me it looks like Google is slipping in these relatively minor changes along with the coming major change to tracking cookies — which will likely have a far bigger impact on publisher revenue. (And those changes will impact publishers based on the contextual value of site content... but that's a whole other conversation)

My 2 cents, of course.

Good luck everyone. 2024 is going to be a crazy year for all of us.

[mark79]

I am quite skeptical about this
Based on our tests, we don’t expect publishers to see a change in their earnings as a result of these updates.

Maybe earnings will be the same for site with low ctr but i am quite sure that site with high ctr will experience a massive drop.

[LucasPerez]

Visits depend on Google, clicks do not.
Now we are at their mercy and whim.

If they feel like it, they can tell you that you had 100 visits and they pay you for them, when in reality you had 1000. Where do you complain?

Now I understand why they have changed Analytics, because it no longer counts real visits, it does not follow the same Adsense count.
Adsense marks fewer visits, many fewer...

Great strategy

[fearlessrick]

@Lucas, Now we are at their mercy and whim.

Pray tell, when were we NOT?

From day 1 of Adsense, when Google refused to reveal the exact terms to which millions of publishers were committing, we were all at their mercy. For many of us, it worked out OK. Other than getting pages dinged for policy violations, or, getting an entire website banned for things that had been online for years (happened to me), we all made some dough. The good times are well past, it appears. Google has always considered websites their own little fiefdoms, and webmasters their slaves.

That hasn't changed and it appears to be getting worse. The good thing is that Google may eventually fail completely. What replaces it - AI, bots, Bing? - might be worse still, but, if pricing power is returned to publishers - where it rightfully belongs - that is a positive development. I'm not holding my breath. I'm moving on.

I've thought about ditching G for a long time and over the years have toyed with other ad platforms, which, sadly, had Adsense as their default. When they couldn't fill inventory, Adsense would show up, but at a reduced rate in the final accounting. That's why I not using any of them and planning to sell my own ads to clients of my own choosing, at rates that I make. Old is new again.

[Skips]

Perhaps a naive question, but nevertheless: As all seem to agree that G has excessive power over websites and webmasters are entirely at its mercy, would it not be sensible to have some sort of publisher unions protecting the interests of the publishers? Similar to labor unions? I mean, an entity representing several billion page views a month is a lot more likely to succeed in obtaining reasonable and transparent terms than any single publisher alone. Or perhaps, there is already something of this sort that I'm not aware of?..

And second question: has anyone been able to find ANY indication of how G is planning to determine the CPM in their new system? Will it depend on visitor country, website niche, ad placement? Or will it be just some arbitrary number that G will display in adsense reporting that we just have accept if we choose to use adsense?

[Conro]

It's also possible that Google will display ads similar to how Mediavine does, with banners shown only under specific conditions to maximize ad performance. Of course, this increased ad effectiveness will come at a higher cost.

[allhearts]

We will see how this works out, but with the way things are going lately with adsense earnings, anything is worth a try.

I will stay hopeful until there isn't a reason to be.

[engine]

I'm sure related to the forthcoming demise of 3rd party cookies in Chrome [webmasterworld.com...] and, of course, ad blockers.

anything is worth a try.

I agree. I'm hopeful it'll breathe new life into this programme.

[LucasPerez]

@fearlessrick completely agree with everything you say.

[LucasPerez]

Little information to see results, but to conspire a little more, this doesn't look good, I hope I'm wrong!

Pages with few visits but good clicks will feel the impact more.

But in the end, sites with many visits, hundreds of ads, and thousands of impressions, taking into account that only the first ad or two per editing url will be counted, will not see good results either.

Favorable income only for sites with a certain authority and first in search engines, so many updates were redirected towards a goal.

It's just my opinion and I repeat that I hope I'm wrong!

[allhearts]

Also keep in mind that although google hasn't clarified anything yet, that I do think publishers will only get paid for "Active View Viewable" impressions, otherwise why would advertisers pay for their ads not to be seen... it just wouldn't make any sense for them.

[Senechal]

I just spoke with an ad-industry friend of mine.

According to him, the real reason Google is moving away from CPC next year is that the legislated shift away from third-party tracking cookies is going to make click-fraud very hard to detect for Google.

He says they're shifting to CPM because in the post-cookie world it'll be a lot easier for fraudsters to profit from click-fraud than with fake CPM views.

Until now they've had the tracking tools to adequately track CPC fraud. Now with the new tracking laws, they're afraid they're going to lose their shirt to fraudsters.... so ... it's all going CPM.

Sounds plausible to me.

[LucasPerez]

@Senechal, what your friend from the advertising industry told you is a good argument.

The topic will be click fraud, for sure.

We all hope that these changes are for the best, both for Adsense and for the publishers, because we all want everything to work correctly.
​

[fearlessrick]

@Senechal and Lucas Perez:

Yep! I was just thinking about clickbots, click fraud, etc. when I came to this thread. Without click fraud, Google can also reduce headcount. Fire a bunch of people who's only purpose in life was to protect the Google-verse. 25 years on and Google has become a dinosaur, not useful to free speech and freedom of expression.

Being a lifelong iconoclast, I welcome their demise!

Publishers, sell your own ads at your own rates.

Just wanted to add, I have been working on a new site and have literally done no SEO, but my pages are showing up on G and Bing and page views are increasing at a steady rate without any promotion other than speaking my mind, offering something a little different and writing articles I think have broad appeal. I'm a happy webmaster again!

[LucasPerez]

@fearlessrick thanks for your experience, it has reached me.

On the 21st of this month I eliminate Adsense from my sites, after 20 years, I do not want to be manipulated or directed by Adsense anymore, I want to express myself freely, and the only way is to stop depending on Google and the CIA.

Even so, I appreciate how Adsense was before, and everything it offered me in the past.

[ember]

@LucasPerez, you have to do what is best for you, but why not wait a few months to see how the new CPM payout model works? If it's worse than the CPC model, then I'm with you as far as moving on from Adsense. But maybe we'll all be pleasantly surprised "early next year."