Has AdSense shot themselves in the foot?

[grynge]

First off I don't want this discussion to be about SEO or how people shouldn't have relied on Google to make money from, or is Google trying to keep all their traffic, I would like to explore the future AdSense.

I don't think anyone will argue with me when I say that Google have over the last year or so made it extremely difficult to get free traffic from them. Even if you manage to be 1st independent cab off the rank you have all the google cabs infront of the queue.

Obviously Googles intention is to keep their traffic to themselves for as long as possible or to make money from them leaving their site. Googles revenue share has changed and they are becoming less reliant on other websites serving their adverts, from a high of 49% of their revenue in 2004 to 27% of their revenue last year and falling by the looks this year.

But I have to wonder has google shot themselves in the foot. First they made it easy to place their ads and earn money, a lot of people became reliant on that money. Now if you look on any webmaster forum (including this forum) now Google are keeping their traffic and advertising revenue to themselves large amounts of webmasters are A. Looking for new sources of traffic B. Looking at new sources of income

If webmasters are looking further afield for their traffic and revenue, more and more sites will start using other methods. Will this mean more advertisers will have to start using other forms of advertising.

What will be the future of Adsense? I am in no way saying Adsense is dead or even dying but I have to wonder will it be the powerhouse it once was? Is this an opportunity for another company to come to the fore and take on the might of Google? Am I counting the chickens before they hatch?

Is it one of those funny conundrums, where Google makes it harder to get free traffic, so webmasters have to start paying google for traffic whilst they start looking for other sources of free traffic. Google thinks excellent our revenues are up, lets make it even harder to get free traffic. Now more webmasters incomes are being lost so they have to now look for Free traffic as well as a new source of income, whilst still paying for traffic from google. Googles revenue increases again wooohoooo google thinks more free money so they make it harder again whilst they try and keep that traffic to themselves. Googles revenue increases because they are keeping all that free traffic as well as sending paid traffic. How long can that cycle continue?

Am I just in a drunken stupor, is anyone else seeing this cycle?

[Kay]

Great posting, grynge.

It has got much harder to make money from AdSense. That's something I'm going through personally, but it's not just about G making it difficult to get free traffic. IMO, there are several other reasons. OK, so the Panda bit one of our most profitable AS sites but that doesn't explain the whole situation. There's no longer any correlation between the traffic and the AS earnings. Traffic goes down, earnings go down. I'd expect that. But traffic drops by, say, 25% and AS earnings completely tank, there has to be more to the story.

I'm sure there must be other reasons which others have noticed, but I think some of it is to do with this darned geo-targeting and personalisation stuff they do, instead of targeting the ads to the content of the page.

I was looking at something today on one of my sites, can't remember what it was about now - let's say banking for expats. So, what AS did I see? One large one in a foreign language which I can't understand, and a huge one advertising a place to buy hair. Buy hair? I have plenty of hair on my head, why would I be interested in buying hair if I'm looking at a page about banking?

Another issue is that the other side of the AdSense coin is AdWords. I've used them in the past but they keep changing their interface and it's got to the stage where you need a PhD in AdWords to be able to use it. I think (hope?) maybe advertisers will look elsewhere for alternatives. Maybe AdWords/AdSense clones or they'll just contact the sites they want to advertise on direct and cut out Mr G the middleman.

Certainly, I'll be replacing the AS units with something else when I can. I don't like the adverts they're showing for me anyway - they are not relevant! And I'm seeing less and less reason, as a publisher, to use AS. I'm sure I'm not the only one.

Maybe they have shot themselves in the foot. Maybe they'll take action and recover by making AdWords easier for the advertisers and posting more relevant ads so the publishers can still earn. Maybe they won't care as long as they're raking in the cash by promoting their own stuff. But people are moving elsewhere. I'm seeing a definite move away from G and towards Bing as traffic sources on some of my sites. (Maybe that's because G isn't sending the same amount of free traffic any more?)

But as long as this Internet myth persists that you need to chase free traffic from Google to make money online, then I don't think much will change in the short term (except that AS publishers make less).

AS still has a lot in its favour. It's easy to use, easy to set up, they're good payers and always pay regularly by a variety of means - GBP straight into the UK bank account if that's what you want. All you have to do is stick a bit of code on your site and sit back (or sleep!) and receive the payment every month. What could possibly be easier?

I don't think it's really in any danger of dying off unless a) people stop obsessing about free traffic from G, b) they carry on with this stupid personal targeting rubbish instead of targeting ads to page content, and c) keep trying to squeeze out the smaller publishers, because in that case we'll have no choice but to look elsewhere and G will be left just as a big business who advertises other big businesses. People can move to Bing (or elsewhere) for search and the small AS publishers will find other ways to fill their advertising real estate.

[crabfoot]

it was not so long ago that Yahoo! were selling context-targeted adverts that paid about the same as Adsense, same modus operandi. These were officially "not available" outside the US, but there was a trial arranged via an agency in UK - if you knew about it, you could get on the trial.

Most people I knew that participated in the trial reported back that it was a viable alternative to Adsense, with similar payouts for the traffic volumes. Yahoo didn't like something, though, and discontinued the trial just before knocking the whole contextual ads system on the head, leaving only the equivalent of Adwords.

Meantime, Google has mucked about with Adsense so much that it is hard work to get results from it. I've got sites for electronic parts that require constant monitoring to prevent them showing ads for stair lifts (the cognoscenti of the target audience are middle age plus), and the traffic is low, so the sites are not worth working on.

Yahoo has the technology in place, they could re-implement it - nobody likes Gargyl's ideas for Adsense improvements, we're all fed up of being followed by ads for our last search term. A great business opportunity - but they ignored the chance in the first place, so what's the betting some dik'ed at the top says it still don't fit the "big plan"?

[grynge]

Great posting, grynge.

It has got much harder to make money from AdSense. That's something I'm going through personally, but it's not just about G making it difficult to get free traffic. IMO, there are several other reasons. OK, so the Panda bit one of our most profitable AS sites but that doesn't explain the whole situation. There's no longer any correlation between the traffic and the AS earnings. Traffic goes down, earnings go down. I'd expect that. But traffic drops by, say, 25% and AS earnings completely tank, there has to be more to the story.

I have noticed the same thing, most of my sites have recovered so the traffic is back but the AdSense payments have taken a huge dive. They say their proportion of the earnings/payments has stayed the same, so I would bet that they now have very definitive proof of keywords that pay with clicks and as such they concentrate on those keywords being the ones that have the most google real estate at the top. So the clickers are being kept on the Google sites and the browsers are being sent off to other peoples sites.

I'm sure there must be other reasons which others have noticed, but I think some of it is to do with this darned geo-targeting and personalisation stuff they do, instead of targeting the ads to the content of the page.

I was looking at something today on one of my sites, can't remember what it was about now - let's say banking for expats. So, what AS did I see? One large one in a foreign language which I can't understand, and a huge one advertising a place to buy hair. Buy hair? I have plenty of hair on my head, why would I be interested in buying hair if I'm looking at a page about banking?

They probably have enough information to work out which people click adverts and which ones don't, hence you may not click ads, so you get off target adverts.

Another issue is that the other side of the AdSense coin is AdWords. I've used them in the past but they keep changing their interface and it's got to the stage where you need a PhD in AdWords to be able to use it. I think (hope?) maybe advertisers will look elsewhere for alternatives. Maybe AdWords/AdSense clones or they'll just contact the sites they want to advertise on direct and cut out Mr G the middleman.

Certainly, I'll be replacing the AS units with something else when I can. I don't like the adverts they're showing for me anyway - they are not relevant! And I'm seeing less and less reason, as a publisher, to use AS. I'm sure I'm not the only one.

That's part of my reasoning, I would love to know if they are losing external advertising sites or gaining them, with all the webmaster forums talk I would have to say they are losing publishers hand over fist.

Maybe they have shot themselves in the foot. Maybe they'll take action and recover by making AdWords easier for the advertisers and posting more relevant ads so the publishers can still earn. Maybe they won't care as long as they're raking in the cash by promoting their own stuff. But people are moving elsewhere. I'm seeing a definite move away from G and towards Bing as traffic sources on some of my sites. (Maybe that's because G isn't sending the same amount of free traffic any more?)

But as long as this Internet myth persists that you need to chase free traffic from Google to make money online, then I don't think much will change in the short term (except that AS publishers make less).

Google isn't a small competitive company any more it's a large behemoth and as such my bet it has the procedures of a large behemoth in getting things done. Can anyone say that Googles overall business acumen has seriously changed over the last couple of years?

AS still has a lot in its favour. It's easy to use, easy to set up, they're good payers and always pay regularly by a variety of means - GBP straight into the UK bank account if that's what you want. All you have to do is stick a bit of code on your site and sit back (or sleep!) and receive the payment every month. What could possibly be easier?

I don't think it's really in any danger of dying off unless a) people stop obsessing about free traffic from G, b) they carry on with this stupid personal targeting rubbish instead of targeting ads to page content, and c) keep trying to squeeze out the smaller publishers, because in that case we'll have no choice but to look elsewhere and G will be left just as a big business who advertises other big businesses. People can move to Bing (or elsewhere) for search and the small AS publishers will find other ways to fill their advertising real estate.

Will one follow the other is what I am wondering, if you can't get traffic and can't make money from google will the webmasters change ships? If you can only advertise on Googles products will the advertisers jump ship? It's pretty obvious from Facebook that advertisers will test new waters, but will they stay the long course? I know there is another whole argument about google ads working and facebook ads not working, maybe that is a topic for another thread?

it was not so long ago that Yahoo! were selling context-targeted adverts that paid about the same as Adsense, same modus operandi. These were officially "not available" outside the US, but there was a trial arranged via an agency in UK - if you knew about it, you could get on the trial.

Most people I knew that participated in the trial reported back that it was a viable alternative to Adsense, with similar payouts for the traffic volumes. Yahoo didn't like something, though, and discontinued the trial just before knocking the whole contextual ads system on the head, leaving only the equivalent of Adwords.

Meantime, Google has mucked about with Adsense so much that it is hard work to get results from it. I've got sites for electronic parts that require constant monitoring to prevent them showing ads for stair lifts (the cognoscenti of the target audience are middle age plus), and the traffic is low, so the sites are not worth working on.

Yahoo has the technology in place, they could re-implement it - nobody likes Gargyl's ideas for Adsense improvements, we're all fed up of being followed by ads for our last search term. A great business opportunity - but they ignored the chance in the first place, so what's the betting some dik'ed at the top says it still don't fit the "big plan"?

I would love to see another serious competitor to google and I think just about every serious webmaster also would love that as well. You have in one corner Google and in the other Microsoft and Facebook can they do something to take on the might of Google, could we see a facebook version of AS on external sites?

[golles]

i sit on the other side. we have relatively little adsense income but we are a largish adwords advertiser.

this is my take from the advertisers perspective.

the display network (where we advertisers place ads to appear on your websites as adsense ads) - was wildly profitable for us for a period of time a few years back (then called the content network) - since then cpc or cpm prices have increased to cut margins to a wafer thin level.

good advertisers will then start testing new tweaks for their ads - our main one has been site targeting. we all know the more targeted the ad to the audience the better the conversion and hence should be more profitable. by targeting very specific sites for our display advertising we are still running profitable campaigns.

by targeting different types of media on those sites we target has massive impact on results.

my theory (read 'guesses') on why you are seeing less relevant ads and decreasing revenue from an adsense perspective are things like:

less savvy advertisers let google choose their placements, I am not saying this is wrong, but you do end up with ads showing on web pages that are somewhat irrelevant to your offering if you let others control your placements.

those less targeted ads are also usually the ones with the lowest bids /cpm rates

retargeting is also posing an issue for some (those pesky ads that follow you around the web wherever you go) - the bottom line for an advertiser is these ads actually do work on many occasions.

If I were an adsense publisher - keeping my points in mind above (remember these are only my theories / guesses) - I would ensure that my ad spots are completed in as much detail as possible (in adsense) ensuring that potential advertisers know (from looking at their doubleclick ad planner) what your site is, what the demographic is, what the pages are about and what each ad slot is - scope, topic etc. I would also ensure that I am always testing different media types for each ad slot. In my view adsense publishers should split test ad slots as much as advertisers split test ads / creatives. This will help capture the advertisers that target placement for better conversion of their ads, that are more aligned to their offer - they will bid more with better conversion.

and I would say this but I would always try to think from an advertisers perspective - what do they want from an ad on your page, where ideally would they like it displayed, what are the goals of the ad etc, etc, - if you think in this way you are more inclined to move into the mind of the advertisers and extract more CPC from them as their offers are more likely to work on your website.

anyway just a few guesses / theories.

hope this helps

[crabfoot]

Funny peculiar?

I thought I'd take a look around at what Yahoo are doing now about those ads - the Yahoo Publisher Network beta for "small people" was nailed up on April 30th 2010, but the larger version, roughly equivalent to "Gargyl doubleclick", was not discontinued.

So my Gargyl search turned up one "pink ad" - it looked like this -

Yahoo Ads On Your Website | AdShack.com
www.adshack.com/
Get Yahoo Publisher Network Ads On Your Site And Start Earning Today

But when I clicked on that I got the message

Oops! Google Chrome could not find adshack.com

Suggestions: Search on Google:

What does that look like? You pay your money and Gargyl takes it ...

WTH ignore the link and go to Adshack, they are up and running - maybe some of us have our alternative to Adsense ready and waiting.

[Matteo]

I am an Adwords and Adsense user. When I setup Adwords campaigns for myself or clients I opt out of the content network and choose search only. I then allow ads to be shown only on highly targeted, specific hand picked sites.

[crabfoot]

I am an Adwords and Adsense user. When I setup Adwords campaigns for myself or clients I opt out of the content network and choose search only. I then allow ads to be shown only on highly targeted, specific hand picked sites.

It might be nice if you told us the reasoning behind the method, what you tried before you decided your present strategy, and gave a rough idea of the field you're working in.

[golles]

It might be nice if you told us the reasoning behind the method, what you tried before you decided your present strategy, and gave a rough idea of the field you're working in.

whilst I clearly cant speak for matteo - I think he means that he opts out of the display network (just terminology i Know but the content network no longer exists) and then when he has campaigns profitable on the search network he opts back into the diaplay network - but only site targeted placements on specific sites (if matteo didn't opt back in to the display network he wouldn't be able to any site targeting).

we adopt a somewhat similar approach but we setup separate campaigns for search vs. display and we choose site targeting purely for conversion rate reasons. if we could get as good conversion rate without targeted placements we would probably do it. fact is we cant. we also launch display and search campaigns at the same time (note - i would not recommend this if you are new advertiser - test search first).

re: our market - we work about 70% in eCommerce retail and wholesale and 30% lead gen for B2B and a very small amount of b2c lead gen.

[grynge]

I am an Adwords and Adsense user. When I setup Adwords campaigns for myself or clients I opt out of the content network and choose search only. I then allow ads to be shown only on highly targeted, specific hand picked sites.

the display network (where we advertisers place ads to appear on your websites as adsense ads) - was wildly profitable for us for a period of time a few years back (then called the content network) - since then cpc or cpm prices have increased to cut margins to a wafer thin level.

Matteo and Golles you both mention opting out first and then once you get some statistics down you start looking for targetted external sites. I was wondering as advertisers do you get a sense that finding good external sites is becoming harder or easier?