How Google AdSense Cannibalizes Content Based Business Models

Contextual advertising makes it easy for people who are not good at selling but good at building an audience to profit from their traffic stream. But the traffic stream that contextual ads work best for are search referrals, especially since

  • the contextual ad networks are extensions of the search ad networks

  • regular visitors learn to ignore ads
  • the contextual ads typically have little to no editorial pre-sell

Sorry, You're Done. Thanks for Playing Webmaster

As mentioned on Sphinn, without warning Robin Good recently had his Google search referrals wiped away. In a post about the event he stated:

Google keeps changing and refining its own approach and policies to improve the quality of its results and in this effort, it appears that it may have become more restrictive and intolerant of issues and deviations from the official standards that it didn't bother about before.

The Difference Between Large & Small Publishers

If you monetize via Google's ads, much (perhaps most) of your revenue comes from Google searchers landing on your site, and thus you are stuck with Google's editorial search guidelines, which sometimes shift arbitrarily. In spite of Robin being a premium AdSense partner he was punished without warning. Google does it to their business partners large and small, though typically with more vengeance if the partner is small.

Likely because of Robin's distribution and influence (and the damage it would have cost Google to not fix the issue), Google started ranking his sites again, but that still doesn't change the experience from being unjust:

the fact of the matter IS that GOOGLE CAN and DOES arbitrarily penalize sites without being transparent about the reasons it does so.

Is it right that Google has so much power over my ability to "exist" as an entity over the internet? Isn't this the case, as Fabio Masetti says, of Google being able to play with the same net neutrality issues we fear from large telcos, for by having the mere possibility to switch off any content without official justifications, while asking me to plead guilty before I am even re-considered?

Some of those with a smaller following found their problem never had a chance to be cleared up.

When & Why I Stopped Trusting Google

If you have read this blog for the last month you could probably tell Google recently killed one of my sites as well. While it may have seemed my posts were due to anger, they were more to show how my perspective changed as I discovered and experienced how sleazy Google's business practices are firsthand. I still speak truth, but as my experiences changed so did my understand of truth. I still like Gmail and some of Google's other services, but I am finding it incredibly hard to trust them as a company.

Imagine re-branding a site you built over 10,000 organic links to, only to have Google view it as a deceptive redirect and KILL ALL OF YOUR LINK EQUITY while paying spammers to steal your content.

A single Google engineer can decide to kill the viability of a site because of who owns it. Then they pay people to steal your work. It is a long, drawn out, perhaps endless process to protect work from theft, especially if Google decides they would rather pay a thief to steal your content than to pay you directly. How could they do that without expecting you to speak publicly about how unjust that is?

If I wasn't an SEO they might not have taken vengeance on me so heavily, but because I know SEO, and I shared too much honest information they decided the only appropriate thing to do was to punish me by nuking my site. I respect that perspective, but it doesn't mean that I have any respect left for them.

Google: the Ultimate Parasitic Business Model

The more you trust Google the harder you fall when the day comes that they have a technical error, or one of their engineers is having a bad day and decides they no longer need you.

Relying on them to build your business is like relying on self-destructing genetically modified seeds to boost your harvest.

For a few years maybe the yields are a bit bigger, but then the seed prices go up, and so does the cost of the fertilizer required to make the seeds grow. Your margins keep going down until you are financially insolvent, while the engineering team gets a raise every year.

Why You Don't Need Google

To maximize Google AdSense earnings you have to place the ads front and center, which scare visitors away from your site, and make people less likely to read your site, trust your site, revisit your site, link to your site, or subscribe to your site.

If you don't plaster Google ads all over your site then your site is likely going to be viewed as being far more credible, and easier to link at, subscribe to, trust, etc. As your industry grows you grow faster than competing sites that use AdSense do.

To appreciate the difference between mediated growth with Google and natural organic logarithmic growth you can compare the sites Google just killed versus the growth in earnings of SeoBook.com. A couple years ago Google created a poor relevancy algorithm that filtered out thousands of websites for their official business names. Even when they filtered out SeoBook.com the site still earned 85% of what it made the month prior, and that is with a business model that sold information on how to rank on a site while that site was not even ranking for its own name!

The point being here is that if you use Google you set yourself at a specific spot on the value chain. If you try to maximize those earnings you prevent yourself from growing as quickly as you could/should. If you move yourself up the value chain Google not only controls less of your traffic, but they also only touch the least valuable portions of it. Unless you use Feedburner Google does not control your brand evangelists.

Should you trust your business to Google? Do you trust them more than you trust yourself? If so, submit a job application.

Published: August 18, 2007

New to the site? Join for Free and get over $300 of free SEO software.

Once you set up your free account you can comment on our blog, and you are eligible to receive our search engine success SEO newsletter.

Already have an account? Login to share your opinions.

Comments

Justin
August 20, 2007 - 7:32am

Isn't Google's motto "Do no Evil" or something like that? Doesn't sound like they're following it.

Marketing
August 20, 2007 - 12:56pm

They give and they take away. They set the rules.

Dink
August 20, 2007 - 9:07pm

Sorry to hear that you have suffered at the hand of Google. Glad, however, that you saw fit to relate to us the how and why of it.

If you think the big G is arrogant, vindictive, selective, secretive, and capricious now, wait a few more time periods. G is bound to increase it's reach.

Doing it (whatever your 'it' is) without G is an admirable goal. It's, sadly, not an option for lots of us.

Paul Hancox | T...
August 21, 2007 - 12:42am

I just wrote about precisely this very issue on my blog. If I'd have found this post in time, I would have linked to it.

Personally, I've never been a fan of the Adsense model for this very reason - you have only one customer in this model - Google. If they decide they don't like you for whatever reason, you lose 100% of your customer base.

I wrote a few solutions to how to get off Google dependence in this post.

Thanks for alerting your readers to this potential danger.

Best,

Paul Hancox

August 21, 2007 - 5:12am

this system is broken, you can just Sense it, pun intended ;p thanks for the very informative post!

i'm here via copyblogger

Cata
August 22, 2007 - 12:40am

Monopoly is where all this is headed. However, a savvy businessman should know that you can never rely on a single source of income. In the case of online businesses traffic means income, however, one should be more preoccupied in branding and creating a loyal list of potential buyers. This is far more important in my opinion. As far as the Google paranoia, I think it all boils down to Adsense fraud. Adsense is being abused by many webmastes.

August 22, 2007 - 12:45am

Hi Cata
Adsense may be abused by many webmasters, but most of those are not premium AdSense publishing partners, and Google knocks out many legitimate websites from their organic search results...many times with reason, but many times without.

James Dunn
August 19, 2007 - 1:15am

It's really tough to build a site without relying on Google though. Even huge sites that have other solid traffic sources (like digg and wikipedia) still get a significant amount of traffic from Google.

August 19, 2007 - 1:23am

Hi James
True, but it is nice if you create a business model that would work even if they decided to try to kill it.

August 19, 2007 - 1:43am

... or create a site that Google (or another dominating Web presence) *needs* more than it doesn't. Easier said than done though.

Sorry to hear about this experience man! I can't imagine the frustration. It would be interesting to hear their side of things. Do you know why they targeted you? You've been critical of them, but never unfair.

August 19, 2007 - 1:50am

Hi Adam
The domain I bought a couple years ago had a couple hundred links to it when I bought it.

I built over 10K additional organic backlinks, and from their perspective the rebrand was a shady redirect, even though about 96% of its links were built by me.

Because my site had a couple hundred links years ago and my marketing and content developement grew the site into something so large that a rebrand made sense Google decided to kill it.

You can tell they killed all the links (not just the old ones) because there are content ideas on the site that I created and made popular, and for the keywords related to those ideas, hundreds of sites referencing our site outrank us.

August 19, 2007 - 3:25am

I would wonder if Google was doing a crackdown on 301 redirect schemes (or perceived schemes) but if so it's probably by hand. I know of a site with 99% of it's links coming from straight up spam redirects (link cloaking) and ranking #1 on Google for probably the 2nd largest key phrase in the student loan industry.

August 19, 2007 - 6:25am

Hi Jeremy
I have seen the results of many other 301 redirects recently (some exceptionally shady) and have to believe that this was manual.

August 19, 2007 - 11:24am

Aaron, you also mentioned GMail and Feeburner in your post.

In fact, many of us are using Google Analytics, GMail and probably also Feedburner. We'd have to drop all that stuff to pretend being transparent to Google in the future. Google says they don't use data of those services for any searchengine calculations, however, it's really something to think about.

Where to go, though? Microsoft started an Analytics Beta Program which shall compete against G-Analytics. Microsoft has Hotmail / Live.com, but nothing like Feedburner until now.

Personally I love Google Apps at the moment, but shifting all my domains on Google Apps is indeed something to think about. The advantage: A great e-mail provider with no costs, the disadvantage: Being eventually even more transparent to a company.

I do trust Google as company. The real question is, can you trust every single Google Employee.

What do you use for e-mails?

Andreas

fantomaster
August 19, 2007 - 4:12pm

Aaron, I'm sure glad to see you actually write openly about Google The Parasite now - not that you gave the impression of pussyfooting around before, but confrontational it certainly was not,
and as you said, it's obviously been a (painful) learning process for you.

Coming to terms with the way the cookie crumbles beyond the marketing hype and the feel-good spinmeister crap they keep doling out to the public is certainly not the easy way out. It requires looking beyond the fancy make-believe and, even more excruciating for many, beyond your own hopes, wishes, expectations - and arguably your own angst.

But at the end of the day a sober no-bs look at things is always a boon, if only because it may prevent you from pouring even more heart's blood into untenable delusions in future.

IMV, the notion of "trust", while quite essential in business on the one-on-one level, is entirely misplaced and fundamentally naive when dealing with anonymous megacorps/behemoths like the search engines (ALL engines, not merely Google!).

You might as well put your trust in gravity - until you're hit by next earthquake...

August 19, 2007 - 4:40pm

Eventually the lawyers will have their day... and Google will pay! ..Hey that rhymes :)

American Airlines just sued them for selling their brand as keywords in Adwords.

Will Rayment
August 19, 2007 - 5:32pm

Sometimes I think webmasters obsess too much over Google. Of course, it is hard not to when your livelihood is largely dependent upon them. I live in daily fear that my "internet empire" (on the rise) will go the way of the Romans due to some slip of the wrist at Goog HQ.

The real problem, of course, is that Google has too great a market share, and thus it can operate in a monopolistic fashion. That's the bad news. The good news is that monopolies eventually become complacent and innefficient. Eventually, Google will slip up, and some newcomer will clean up the floor with it. It happened with GM. It happened with IBM. I have noticed that no one seems to fear Microsoft anymore.

So, someone get on the stick and develop a new search model that will bring a little balance back into the world of search!

WJR

p.s. I try to follow Matt Cutt's advice and pretend like Google does not exist. But that is impossible when Google doesn't like you to interlink your own sites, or sell links, or blow your nose on a dirty hanky.

MyZine.com
August 19, 2007 - 6:45pm

Is a love-hate relationship between G & SEO guys!

MyZine.com
Just Share

Paul M
August 19, 2007 - 8:22pm

Hey Aaron;

If Google 'killed' one of your sites that has tones of backlinks, don't those backlinks provide any monetize-able traffic for you?

It seems that SEO is becoming somewhat irrelevant to creating sites any more, and one must truly build a site who's traffic generation model ignores Godgle, since they will be cut off from Godgle sooner or later for whatever reason (has been my experience too). One must build a site that relies entirely on traffic from non-Godgle sources to provide income, even though CTR will be less due to factors you've mentioned above.

We have a 7 month old PR4 site with more than 1200 REAL backlinks & over 120,000 pages, which some pros have said is just on the border of being spam (I know that sounds fishy, but each page provides unique valuable LOCALIZED content, really). The site gets about 4,000 uniques a day, 90% of which comes from Google. With almost 7,000 pageviews a day, average time on page is over 3 min., and when eliminating ad clicks, bounce rate is less than 20%, so I know the site provides good user experience. We are totally transparent to G as we are using AdSense, G-Analytics, G-Sitemaps and Feedburner for our blog. As mentioned, I know from past experience with other sites that we will experience extreme dips in traffic from G whenever there is an algo tweak, sometimes to come back a few weeks later, sometimes even much stronger. BUT, for long term solidity, we are building toward a model which will provide sustainable income WITHOUT the almighty G (of course part of that is leveraging current G traffic with CTA's that ASK for links, and Stumbles, and social bookmarks, etc... we have become active in the industry community, and we provide contests that bring non-G traffic). We're doing this knowing that someday there will be a Godgler who doesn't like us, and whamo! No more G-spot traffic...

My point of the above (and all your recently wonderful 'anti-G' posts) is that one can no longer depend on G as a reliable long term traffic generator, and that one must move to a 'Google-less' traffic and monetization model...

So when will your new site 'TrafficBook.com' be launched (I see the domain is for sale)? ;)

PS: It is very refreshing to see an A-lister not be an A**-kisser to Godgle. Sweet.

PPS: We're almost ready to launch our mashup site that takes G SERP's and reorders them using data from a few social bookmark sites PLUS actual non-G human reviews (and a lot more actually)... this way you know you're not getting 'gamed' SERPs, but REAL quality results. This should help quality sites that are page 3+ in SERPS to get their just reward. We would love to have you on board as a partner, please get in touch if you're interested.

PPPS: Sorry for such a long-ass post.

August 19, 2007 - 10:10pm

If Google 'killed' one of your sites that has tones of backlinks, don't those backlinks provide any monetize-able traffic for you?

That is the thing though. The rebrand was done because the site needed a stronger brand, hiring more staff, raised on the value chain, etc...all that good stuff. Before it was held up mostly by flavor of the moment hot linkworthy content, but it was not a real brand. Some of the links send real traffic, but that traffic does not monetize as well as it could given the current model of that site.

Also, as noted in the post, since it was monetized by Google the site placed itself lowly on the value chain, and since it syndicates low value Google ads it was in a position to where Google traffic was more valuable than traffic from any other source.

Stumbles, and social bookmarks

These people are good at spreading the word about your site, which leads to direct and indirect links, which leads to higher rankings in Google, which leads to sales through Google, but from my experience social bookmarks rarely lead to monetizable events unless the stuff they are bookmarking is a sales pitch, which is a rare event.

We would love to have you on board as a partner, please get in touch if you're interested.

I am also launching some big stuff soon, so I am lacking time to do another big thing like that, but thanks for the offer. Best of luck with the launch Paul.

June 18, 2008 - 4:08pm

Great post. It still amazes me how many websites and startups still rely on Google Adsense. According to Bizak.com startups that use Adsense only earn $0.06 per visitor (EPV). Subscription models average $1.02 Earnings per Visitor (EPV). This is much better than most advertising models that range from a low of $0.06 EPV (Google Adsense) to $0.19 EPV (In House Advertising.) Even though subscription models tend to be more profitable than advertising models they still are only used by 8% of the startups listed on Bizak.com. Advertising makes up 58% of online revenue models with Adsense representing 21.5% and In House Advertising 25%.

June 18, 2008 - 4:33pm

Hey Tom,

I agree that adsense isn't a perfect solution for most sites (I never planned on using adsense for any of my sites, because the idea of having my traffic acquisition rely on mostly Google was already painful, let alone having them control my traffic stream & monetization - I guess Aaron's philosohpy influenced me here)

But I must say I highly doubt that comparing how much money adsense sites make in comparison to subscription models is a good idea - I bet a large part of the people who run adsense sites aren't very sophisticated when it comes to traffic acquistion and marketing in general (in comparison to people with subscription models).

I think the whole difference of 6 cents vs. 102 cents could be caused by the fact that people running adsense sites are on average way worse at marketing/traffic acquisition than people who are running sites with subscription models.

I think such stats would only be worth looking at if they had stats on how much money/certain number of visitors they make, it'd be a more relevant comparison (maybe they actually have these, but I can't look it up right now :-)).

New to the site? Join for Free and get over $300 of free SEO software.

Once you set up your free account you can comment on our blog, and you are eligible to receive our search engine success SEO newsletter.

Already have an account? Login to share your opinions.

  • Over 100 training modules, covering topics like: keyword research, link building, site architecture, website monetization, pay per click ads, tracking results, and more.
  • An exclusive interactive community forum
  • Members only videos and tools
  • Additional bonuses - like data spreadsheets, and money saving tips
We love our customers, but more importantly

Our customers love us!






    Email Address
    Pick a Username
    Yes, please send me "7 Days to SEO Success" mini-course (a $57 value) for free.

    Learn More

    We value your privacy. We will not rent or sell your email address.