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europeforvisitors
Joined: May 23, 2002
# Posts: 23
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Posted: 2003-Jul-16 02:51
A few more quick comments:
1) Curt talks about "high-performing sites" like his site that earns $2,500 a month from 20,000 page views by selling products. My response: You're comparing apples (e-commerce sites) with oranges (information or "content" sites). AdSense is a program that's designed for information or content sites, so comparing its revenues with e-commerce earnings is irrelevant. The real comparison should be between AdSense and traditional ad networks like Burst, FastClick, and Tribal Fusion. (And while it's true that some content sites, including mine, do well with affiliate sales, that's also irrelevant since AdSense ads coexist peacefully with affiliate links.)
2) Talking about traditional "revenue splits" of 50-50, 65-35, or whatever is also irrelevant, because it's based on an old paradigm: the ad network as an alternative to sell-it-yourself-advertising. The traditional ad-network pitch is something like, "Instead of dealing with the hassles of selling ads, billing advertisers, and running an ad server, outsource the job to us and we'll split the money with you." Google's AdSense "targeted-by-the-page" ad program is an entirely different concept: It isn't something you're already doing on your own, or that you could be doing on your own; it's something that you *can't* do on your own. In fact, you can't do it at all without Google. So the issue isn't what percentage you get, but how much you earn. While FastClick, Burst, etc. are talking about the revenue share they'll give you, Google is letting you place code on your pages and see for yourself whether AdSense is likely to be profitable for you. If you're sold, great; if you're disappointed, you can pull the code off your pages and go back to whatever you were doing before.
3) It's likely that Google isn't using a simple 50-50 or 65-35 revenue split, because it doesn't have to. Unlike ad networks, Google is a company whose entire business is based on sophisticated algorithms, and it's more than capable of designing a payment formula that takes any number of variables into account--from a site's revenue levels to the percentage of revenue-producing ads served to how badly a site or page on a given topic is needed to fulfill Google's AdWords inventory requirements. (There's nothing new about paying different amounts to different Webmasters; affiliate programs do it all the time. For that matter, sales reps and book authors had tiered commission or royalty arrangements long before anyone heard of AdSense, Google, or the Internet.) IMHO, it would make a lot of sense for Google to use a complex payout formula because (a) it would allow Google to give the greatest incentives to the publishers it needs most; and (b) it would make life harder for competitors. (Why should Google make it easy for an AdSense clone to say, "Google is giving you 50%? Hey, we'll give you 60%."
Side note: This month, AdSense will probably pay me 8-10 times what I've ever earned from a traditional ad network. And that's incremental income: I've seen no evidence yet that AdSense is cannibalizing my affiliate sales. If some publishers want to hold back because Google chooses not to spell out the details of its payout formula, more power to them. I'll sympathize with them and bemoan their foolishness all the way to the bank. 
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jpalbicke
Joined: Eons Ago
# Posts: 32
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Posted: 2003-Jul-17 16:44
I just read this thread last night and so I wanted to hit on a couple of things not necesarily related to where this ended up. I agree with Jcokos that the so called tracking/reporting of impressions is whacko, and completely irrelevant. Also makes me wonder how they are serving the ads to visitors, which has also been alluded to. This really hit home this morning when I looked at the (impression) stats. They are completely out of line with how many visitors we have had to those pages already today.
I also agree that the saturation of this product is going to be quick, and I am sick of seeing the ads already myself. I quess the way to look at that, is not as a web developer but as an end user/casual web surfer and hope that he/she is enticed by the relevance of their particular topic when hunting around and seeing these ads over and over.
I did drop the Google Adsense Team a note weighing in on the customization issue. That would go along way towards some transparency to the end user, if they did not stick out like a sore thumb, especially for sites like mine that have no place for any hue of blue. They responded stating they were hoping to have customization/better integration of the ads, as an option in the future.
As far as percentage of sales, I am happy with the CPC that I am receiving and as long as I am satisfied with that, I could care less what the percentage is, because the technology that Google created to serve relevant ads is unique, easy to implement, (I don't care if it took me a whole day to dress up my site, which it did not.), and nobody else is paying out what they are, end of story for me. To kick a dead horse, CPC and actual click through percentage is what really matters to me. And we are getting a 2% click through rate which is fine by me. I don't think I violated the TOS with that disclosure.
Equally important, I believe is that the ad revenue is more addition by addition, than addition by subtraction with respect to affliate programs, and boosts overall revenue to my site. I am sure there is some minute cannibilization of affiliate programs, but I believe that as a centralized resource for the content and products we provide, ultimately this is an added value, including, most importantly from a revenue perspective.
And really, I think that the clicks to Google ads are by and large, an exit click anyway. But ultimately, I do have a wait and see attitude over how this is going to flesh out over the longer term.
And silly as it sounds, I care more about the color of the pie, than how big a portion I am getting.
JP
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Curt
Joined: Eons Ago
# Posts: 3735
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Posted: 2003-Jul-20 10:52
When everyone is getting smaller and smaller pieces of the pie, I hope you remember this issue and say, hmmm perhaps he had something there.
Oh well, some people (the majority in this thread) don't mind being in the dark. That's your preferences and fine by me. Just thought more would agree that they too would like to know the percentages. Guess people prefer darkness over light--LOL what can I say 
And just to clear something up in an earlier posting... I was NOT insulting anyone intentionally, but was truly puzzled and amazed over people's reasonings.
Don't complain when the percents get stacked against you and you are no longer making anything, but can't figure out why. Sometimes the "Why" is nearly as important as the "how much". Some day some will get it.
---
When-O-When are the long dashes and smart quotes gonna be fixed! A pain in the posting--keep messing up on me.
[ Message was edited by: Curt 07/20/2003 03:02 am ]
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Curt
Joined: Eons Ago
# Posts: 3735
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Posted: 2003-Jul-20 11:01
Actually, I hope for all of the publishers' sakes that the percentages remain good and high so all make a nice living from ads. However, if history is any indicator, the one in control seems to take a bigger and bigger piece of the pie until they have choked off most of the profits and only the largest publishers are making barely enough to survive. I hope it never comes to that for all your sakes.
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jpalbicke
Joined: Eons Ago
# Posts: 32
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Posted: 2003-Jul-21 03:06
I personally don't think that disclosure of the percentage will change the dynamics of the relationship between small web owners and Google. It will only invite alot of complaining and extra PR work on Google to manage this program. I think right or wrong this is one of the reasons I think, that Google has chosen to keep everyone in the dark. I will also admit that my bias in liking Google as a company colors my opinion, and is influential in giving them a pass on disclosure. Also the (current) high CPC payout, at least in some of the relevant topics/ads in my market niche, doesn't hurt
But if and/or when the financial dynamic of this deal changes, I will pull down their towers and search out other revenue sources, pure and simple.
JP
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jpalbicke
Joined: Eons Ago
# Posts: 32
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Posted: 2003-Jul-21 03:06
No pun intended with the PR comment...
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europeforvisitors
Joined: May 23, 2002
# Posts: 23
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Posted: 2003-Jul-21 04:08
>>When everyone is getting smaller and smaller pieces of the pie, I hope you remember this issue and say, hmmm perhaps he had something there.<<
You forget that "the pie" is growing, and that competition for high-profit keywords is likely to increase.
I do think there will be a shakeout as the AdSense network matures. Advertisers will demand more control over where their ads appear, and a flood of opportunistic quasi-content sites may prompt Google to raise its standards for admission and retention. This will hurt marginal sites and the get-rich-quick crowd, but it will make AdSense more appealing to advertisers--which will mean more competition for ad space on quality information sites in niches that appeal to online spenders.
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Curt
Joined: Eons Ago
# Posts: 3735
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Posted: 2003-Jul-21 07:45
You forget that "the pie" is growing, and that competition for high-profit keywords is likely to increase.
True, but only provided that the percentages are not decreased as a result and we end up with no appreciable increase in commissions.
It's very possible that bids could go up over time but you won't see your commissions increase simply due to smaller percentages. If they don't shrink the percentage of payment it'll be good for you, but if they do shrink the percentage as the bids get higher, you'll never know whether the bids are higher or not.
10% of $1 and 5% of $2 is the same amount and makes the bid appear to be the same, but you'll not know the difference. That's what I meant by shrinking your pie slice. Don't look at the volume, look at your percentage of each click. You would want your percentages to be higher, not lower.
As for people complaining about percentages, that would seem like something that google would not have to worry about even if they did disclose the percentage. If people didn't like it, they could simply not join. For others it would be a guage to help in determination of joining or remaining in the network or not. Knowing more is better than knowing less. But still, some people prefer ignorance hence the saying "ignorance is bliss".
As I said, when I originally opened this thread, I figured people would have some of the same questions that I had--that's not the case it seems or some of the others are not openly admitting that they have similar/same questions for fear of something or another, who knows.
So far AdSense seems to be paying OK for people running the right ads. Hopefully the percentages stay high.
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bhartzer
Staff
Joined: Jun 08, 2000
# Posts: 7042
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Posted: 2003-Jul-21 16:27
"A few days later, that page is still in the top spot for that particular search, but the Adsense ads are the generic..."
It's most likely that there weren't any relevent ads (no Adwords advertisers bidding on your keywords) to show on your page, so Google ran public service ads.
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Rivux
Joined: Dec 08, 2002
# Posts: 77
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Posted: 2003-Jul-21 18:44
This is getting beaten to death but I still don't see where you are coming from Curt so I've got another question.
If Google said upfront that everyone gets 15% of the click thru, how does that make your job any easier when deciding whether you should work with them or not? We have no idea what ads are even going to appear, and we have no clue how much those ads are paying, so them being upfront and saying everyone gets 15% is useless, since we don't know what we are getting 15% of.
Lastly Curt, how would You like them to handle this? What information would you want them to show that would make it easier for you to decide on whether you want to use them or not.
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dave920
Joined: Aug 15, 2001
# Posts: 14
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Posted: 2003-Jul-21 20:10
I would love to know what percentage of each click's revenue I receive -- but I'm not going to worry too much about it, so long as the money keeps rolling in. I think of it in terms of the employer/employee relationship.
An employer rarely pays employees a salary based on the percentage of revenue earned (well, maybe in the movie or music industries). Instead, the employer works out a salary it feels fairly compensates the employee. If the employee isn't happy with her paycheck, she can walk out and find a new place to work. And so is true with Google .. but right now, I think Google is the best "employer" in this case, so I'll be sticking with them.
For those of you commenting on how the stats provided by Google may not match up with your own, you should take into account charity ads. Google does not pay for charity ads (like the Red Cross, or National PTA) and as far as I know, they don't record them in the stats either. So that may be why the stats from Google and from your own logs are off.
As for me, I've been with Google about a month now and have loved the program. I've easily made more in the past month than I have in the past year with companies like BURST! Media and Fastclick (though I'm still a greatful member of each). So for the time being, I'm quite pleased.
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jpalbicke
Joined: Eons Ago
# Posts: 32
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Posted: 2003-Jul-21 22:01
"Don't look at the volume, look at your percentage of each click. You would want your percentages to be higher, not lower. "
I just want to reiterate that that is exactly what I, and I think everyone else would look at if they could, so instead, they are paying attention to the CPC payout.
If that shrinks then I am history. If it stays the same but Google is making more, so be it. Ignorance is bliss!!!
I am being fecetious however, the program is paying me a decent CPC and that is the main reason that, I AM HAPPY, and that is my main point. I also think that perhaps it would help Curt if we all said that we would love to know the percentage of each sale, however due to the currently high payout, lack of disclosure is not a deal breaker.
JP
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Curt
Joined: Eons Ago
# Posts: 3735
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Posted: 2003-Jul-21 22:34
I agree that CPC is important and very important at that. Without a high CPC, a high percentage doesn't matter much.
But the percentages do help in knowing what piece we are earning. People want to compare us to employees of Google. We are not employees, but commissionable sales force--a sales force that works percentages and such. Having some idea of what we're making is the only measuring tool we have. Alas, none of us have any method of determination except perhaps CPC. However, when earnings drop, we don't know if it's because of lower bids or that GG is cutting our commissions.
Senarios:
If the bids are simply lower, we perhaps could adjust our pages to locate better paying terms or wait for the bids to come back up. If the commissions are being cut we would know that it's time to pack our bags and look for better pastures. However, without knowing the percentages, we have no way to determine quickly either case and therefore it makes the whole program that much harder to guage as to whether we should wait it out or bail out when the going gets bad.
If it were simply low bids, I might be inclined to give the bids a chance to come back up. However if commissions were cut significantly, I might be inclined to dump the program much faster since I would not make what I made previous to the cuts. But not knowing the percents can cause delays in decision making due to missing information. I'd like to know why commissions are smaller if they got smaller.
For now people are making good returns and it's paying better than the other ad networks--certainly do not dispute that. I hope it holds true for everyone for a long time.
(((please fix the long dash)))
[ Message was edited by: Curt 07/21/2003 02:38 pm ]
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jpalbicke
Joined: Eons Ago
# Posts: 32
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Posted: 2003-Jul-22 02:18
I know that I am perpetuating this thread as a dead horse kicker, but it is a good time to say that you have made excellent points (Curt of course). And they may be useful to me in some way.
I should lob a message to the Google Adsense Team and say hey!, how about some percentage disclosure, or else, hehe... The point is, it is not a deal breaker for me, bottom line, because every day my piggy bank steadily climbs, and the CPC is pretty strong on balance.
I would also trust getting paid by Google over most if not all PPC revenue sharing deals, or just about any other lead generation affiliate program, or any other CPC affiliate program for that matter.
I suppose right now, I could go sifting through some of the ad networks for programs that paid for clicks, or leads, and find some that look good, providing all of the stats on payout, percentages, etc I could ask for... Chances are high that the program(s) would be littered with fraud, apprehension about getting paid, and ultimately the program might shut down.
And so it is pragmatically in line for me to leave the Google Content Ads up, enjoy seeing the $$$ grow despite the crazy impression reporting figures, and lack of percentage disclosure, and leave it at that for now.
Perhaps I can leave this thread alone too... I promise I will try.
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europeforvisitors
Joined: May 23, 2002
# Posts: 23
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Posted: 2003-Jul-24 04:11
>>We are not employees, but commissionable sales force--a sales force that works percentages and such.<<
Actually, we're publishers, and we're selling ad space. We happen to be selling it on a CPC rather than a CPM basis, but ultimately there are just two numbers that matter:
1) The effective CPM (our revenue per 1,000 impressions), which is a unit of measure for the value of the ad space that we're selling; and...
2) Our bottom-line revenue.
If the effective CPM is better than we can earn by other means (e.g., by dumping the "Ads by Google" box and adding more affiliate links), then we should stick with AdSense.
Similarly, if the bottom-line revenue is better than we can earn by other means, then we should stick with AdSense.
If not, then we should go with the alternative that pays better.
As for whether Google should disclose percentages, I'll refer anyone who's interested to my earlier posts in which I explained why it's reasonable to believe that Google isn't using a simple percentage split the way traditional ad networks do.
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Silv
Joined: Aug 10, 1999
# Posts: 1668
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Posted: 2003-Jul-24 09:10
If the effective CPM is better than we can earn by other means (e.g., by dumping the "Ads by Google" box and adding more affiliate links), then we should stick with AdSense.
And for me, that's the nail on the head.
I have to agree with Curt in that I'd feel better knowing more about how they are arriving at the $$$.. but as long as the CPM stays up (comprable or better than other methods of ad sales), I'm happy.
I also agree that with things being mysterious, there's no real protection against Google taking a bigger piece of the pie; but the defense there is carefully monitoring your average CPMs. If the program can't compete with other possililites, drop it.
Also on the side of caution.. I'm not putting all my eggs in one basket w/ this. Probably 35% of my possible impressions.. so other avenues remain open/growing.
While I'd love to maximize sales, I'd much rather have steady income that is average or above average. Perhaps that's a unique view, but I'm happy.
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Curt
Joined: Eons Ago
# Posts: 3735
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Posted: 2003-Jul-24 16:23
Silv, agreed on all aspects :D
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jpalbicke
Joined: Eons Ago
# Posts: 32
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Posted: 2003-Jul-24 17:44
silv and europeforvisitors both expressed the important aspects of evaluating the value of Google Adsense, (in my view), much more succinctly than I have done...
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stravaig
Joined: Apr 25, 2001
# Posts: 73
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Posted: 2003-Jul-26 11:35
Just a small point to add - not only does Google not tell us which pages are bringing in the revenue, they don't even tell us which sites.
I'm currently running the ads on a site which is up for sale. Although it has low traffic and no other income, it may be that the Google ads are enabling it to break even or even be profitable. I guess my only answer is to apply for a separate Adsense account for that site. But when British banks charge a fortune for currency conversion, I'd rather only have one cheque for all my sites.
Other international companies allow you to choose your currency (eg CJ pays in sterling - albeit at a higher minimum). Maybe Google should think about doing it too.
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Silv
Joined: Aug 10, 1999
# Posts: 1668
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Posted: 2003-Jul-27 07:00
Just a small point to add - not only does Google not tell us which pages are bringing in the revenue, they don't even tell us which sites.
I'm almost positive they're working on this, from a reporting standpoing. Probably won't be terribly long..
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