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Feb 10, 2006
How To

Online Publishers Made an Estimated $1 Billion Plus From Google AdSense in 2005: Get Your Share

SUMMARY: By ContentBiz estimates, online publishers who placed Google's AdSense contextual ads on their sites in return for a cut of the revenues, made about $1 billion last year. Whether you're considering adding Google ads to your site, or you already carry them but think you deserve a bigger share of that billion, here are our quick how-to tips.
Last year 20% of all US online ad revenues excluding ads on search engines were from ads sold by Google that appeared on third-party publishers' sites via the AdSense network.

Worldwide, MarketingSherpa estimates Google's AdSense revenues were about $2.6 billion, with more than a $1 billion going into the publisher's pockets. This year, we expect that number to rise by at least 15% if not much higher.

How can you get your share of the Google AdSense pie? And, are there legitimate reasons to avoid taking AdSense ads? We interviewed Joel Comm, author of the report 'Google AdSense Secrets' as well as two online publishers currently carrying AdSense ads on their sites.

Quick backgrounder: What's AdSense and how does publisher role work?

Google launched AdSense in early 2003 as a companion media sale to its paid search ads. Instead of appearing on its own site, the ads appear on a network of third party publisher sites.

AdSense ads are contextually served, which means Google uses sophisticated technology to automatically examine the content on the Web page and then pick the most-relevant ads to serve next to it. Although Google claims its contextual serving is close to perfection, it's not (nor could it ever be) guaranteed. There are definitely examples where the ads served were an unfortunate choice given the content.

AdSense is neither the only nor the first contextual ad network on the Web. (Dozens of others include ContextWeb, IndustryBrains and Yahoo! Publisher Network.) It is, however, the biggest in terms of revenues at this time.

It's insanely easy to start carrying AdSense ads on your Web site. You sign up via an online form, and after a human editor approves the example Web site you gave them a URL for, you paste a simple line of code onto your Web page. Then Google starts automatically serving up ads on that spot.

You can decide where on the page the ads will appear and roughly what they'll look like from predetermined template choices. Basic ad blocks contain either two or four text ads. However, graphical ads are also available.

All ads are branded with the 'Ads by Google' tagline, unless you negotiate a position on Google's roster of Premium Publishers.

Premium Publishers also get other benefits such as, we suspect, a different compensation scale than the smaller fry. Generally you must have at least 20 million pageviews per month to qualify, although we've heard anecdotal evidence Google has allowed a handpicked few smaller sites into the group if they are in a critical topic niche.

In total, currently you can place up to three AdSense ad blocks per page of your site, plus one AdLink unit and two Search-the-Web-via-Google boxes. Most publishers we know don't post as much AdSense inventory as that.

Google provides the publisher the option of blocking ads from up to 200 domains. You can stop the competition from trying to advertise on your site via AdSense.

Google pays the previous month's commissions at the end of the next month. (AdSense publishers got paid for December ads in late January.) You can get direct deposit, a first class mailed check, or pay a $25 service fee for Fedex check delivery.

Key -- No one, including ContentBiz and the experts we interviewed for this story, knows for sure what cut of AdSense revenues Google actually pays out to the average publisher, although financial statements say the payments are 75% to the network as a whole. Each publisher is sworn to secrecy about the terms of their deal and told they'll be dumped from the network if they ever give out numbers.

That said, over the past three years we've heard enough rumors and midnight confessions to peg the number somewhere between 40%-50% for the majority of publishers (not including the really big guys.) Your commission rate will depend on your site's size and niche.

The two other biggest no-nos that can get you dumped from the network are:

#1. Click fraud -- Google is reportedly so wary of this that they'll not only dump you for life but then also may dump associated sites that may share the same ownership and/or servers.

#2. Offensive content -- This judgement is in the eye of the beholder. To Google, offensive content seems to include anything X-rated as well as hate speech.

Google also claims they dump sites that are not up to snuff design-wise, but as of now their restrictions on that front are laughable. That's because currently, when you sign up to become an AdSense publisher, you're only required to show Google a single URL you plan to run ads on. Once you're accepted, you can slam up ads over as many of your other sites as you want -- even darn ugly ones.

The debate: Could carrying AdSense hurt your brand or business model?

The lure of easy AdSense profits has created an entirely new category of online publisher: sploggers. The term comes from the words "spammer" and "blogger" smashed together. As the name implies, more mainstream online publishers think sploggers are fairly slimy.

These entrepreneurs use free or extremely low-cost blogging software to launch multiple content sites almost effortlessly. Instead of going to the effort and expense of creating their own content, they pull RSS feeds from other publishers (as well as PRWeb's hundreds of topical press release feeds) to populate their blog automatically.

Then with a simple line of AdSense code, they harvest ad revenues from the pages. Google's habit of ranking blog sites typically higher or as high as publisher sites (due in part to the SEO-ineptitude of many mainstream publisher sites) means sploggers can get plenty of traffic using headlines harvested from other publishers.

End result, your headlines show up on someone else's page and, to some degree, your ad revenues follow them.

The Web surfing public is becoming increasingly aware that "Ads by Google" tend to appear on many pretty crappy sites as well as more professionally produced ones. We have no statistics on how this affects your brand if you also carry AdSense. But it can't be a good thing.

That said, perhaps we're overreacting and the potential revenues outweigh your brand diminishment potential. We've met many publishers, from every camp you can imagine, who are more than pleased to take their Google checks to the bank.

If your primary business model is paid subscriptions or PDF sales, should you worry about AdSense affecting conversions? Well, consider that Amazon allows contextual ads on its sales pages.

“The fact of the matter is that some [online] retailers are making more from AdSense than from their own products on their site,” says Joel Comm, author of the business report 'Google AdSense Secrets.' “The fear is unfounded – there are other links on your site, and a lot of them aren’t to paid content. The idea is that additional content may be of interest” to site visitors and it can be monetized.

What about hurting your advertising sales?

Mark Tisdale, Associate Publisher eMedia Well Publishing, Inc., whose responsibilities include overseeing InsuranceJournal.com, isn't concerned AdSense will cannibalize his ad sales.

“An ironic twist, perhaps it gives us a chance to go after a new advertiser,” says Tisdale. By monitoring AdSense ads on the site, he’s been able to research new accounts that he wouldn’t have otherwise. “It can be a nice flow into a conversation with an advertiser,” he says. “They’ve spent money on an (AdSense) campaign, so we now know they believe in online advertising.”

“I’ve had a couple of sponsors that felt they didn’t want to compete with AdSense ads on the same page as their ads,” says Tim Carter, Publisher of consumer info site AskTheBuilder.com. “That’s not an issue, because I can just turn off the AdSense (on that page) and ask the sponsor to make up the difference.”

In such cases, Carter renegotiates the ad rates with the sponsor, adding in an estimate of the lost AdSense revenue he would have generated on that page. According to Carter, that seems to work.

Specific tactics to making more money with AdSense

Although Google promises useful live online reports that will show you how your AdSense ad placements are doing, many publishers we spoke to said they were underwhelmed with the extent of the data provided. You'll need to supplement with your own home-grown analytics to discover what works best to maximize revenues.

Here are seven specific tactics Joel Comm and others have recommended to us:

#1. Stick with text ads

Anecdotally, the much trumpeted image ads don't get the response rates of text-only ads. And if you're getting a cut of sales based on response rate, that's the endgame.

#2. Put the ads as close to your content as possible

People are reading your page to see the content, so anything close to or contained within the content generally will do better than anything elswhere on the page.

#3. Don't rely on standard banner placement or ad sizes

Web surfers have trained themselves to ignore 468x60s placed in regular banner-ads-go-here spots. Want more clicks? Move your AdSense ads out of that traditional format. We know publishers who have tested location all over the page (including at the very bottom) with great results.

"We tripled our Google ad revenues from last year just by moving some ads around little by little to see what works best," says Janet Attard, Publisher of BusinessKnowHow.com.

#4. Test multiple ads

As we noted above, you can stick in multiple ads per page. If this is critical revenue to you and the extra ads won't dilute your brand or hurt user experience, test it.

#5. Consider "white" borders

Classic ads online have lines boxing them off from the other content on the page. However, you might test a "white" border, which for a white page would effectively render the border invisible. No border means no block to stop the eye.

#6. Match borders to your site colors

Another option: use a border color that matches your site's palette as closely as possible. The ads look more "at home" and often get better clicks.

#7. Create content to match most expensive AdSense clicks

Because AdSense operates as an auction, not all clicks are equal. Some clicks might make you a few cents, others could make you double-digit dollars. We know of entrepreneurs who deliberately check keyword terms that are worth bigger bucks and who then write content designed specifically to attract higher-value contextual ads.

This can mean anything from tweaking the specific verbiage in your headline to actually composing articles focused on topics you might not have otherwise written about. This AdSense-driven editorial, instead of reader-driven editorial, tends to be the most profitable for publishers extremely adept at getting free search engine traffic from SEO.

In fact, more than a few journalists who can turn their reporting hands to almost any topic now make more money from their Google AdSense sites than they do from formal employers.

If you're wondering where all those mainstream publishing editorial layoffs of the last 12 months will find employment, Google AdSense is as good a place as any to expect them to pop up. Self-publishing is alive and well in 21st century America.

Useful links related to this article:

Joel Comm's Report, Google AdSense Secrets: http://www.sherpastore.com/Google-AdSense.html

Screenshots of sites carrying AdSense ads: http://www.marketingsherpa.com/cs/adsense/study.html

Ask The Builder http://www.askthebuilder.com

Insurance Journal http://www.insurancejournal.com

BusinessKnowHow http://www.businessknowhow.com

See Also:

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