With a limited number of recoveries nearly a year after Panda, the first bite might seem like a big concern, however the "too many ads" algorithm updates far more frequently than Panda does:
If you decide to update your page layout, the page layout algorithm will automatically reflect the changes as we re-crawl and process enough pages from your site to assess the changes. How long that takes will depend on several factors, including the number of pages on your site and how efficiently Googlebot can crawl the content. On a typical website, it can take several weeks for Googlebot to crawl and process enough pages to reflect layout changes on the site.
And for those who got hit by Panda then tried to make up for those lower ad revenues with more AdSense ad units, they probably just got served round #2 of Panda Express. ;)
However Google has such a rich data set with AdSense that I don't think they would just look at layout. If I were them I would factor in all sorts of metrics like
average page views per visitor
repeat visits & brand searches
clickstream data from Chrome & the Google toolbar (so even if you are using other ad networks, they can still sample the data)
Some sites are primarily driven off of mobile views while other sites might be seen on large monitors. When Google sees every page load & measures the CTRs, tacking actual user response is better than guestimating it.
They could come up with some pretty good metrics from those & then for any high traffic/high earning site they could manually review them to see if they deserve to get hit or not & adjust + refine the "algorithm" until those edge cases disappeared. Google's lack of credible competition in contextual & display ads means they can negotiate pretty tough terms with publishers that they feel are not adding enough value to the ecosystem.
There was no claim of click fraud, copyright issues, or anything like that.
There was no claim of advertiser complaints.
Google offers no customer support phone number, no "you might want to work on this" advice, doesn't list which of the sites in the account they felt could be improved, and RETROACTIVELY nuked past "earnings" ... depending on where it is in the schedule that can amount to anywhere from 30 to 50+ days (I remember Teeceo mentioned how they waited until the day before the AdSense payday to smoke his stuff way back in the day to have maximum impact!)
On Google's latest quarterly earnings call they highlighted how year on year Google's revenues were up 25% but the network revenues only grew at 15%. They also explained the slower network revenue growth as being associated with improved search quality & algorithm updates like Panda.
Is the Garbage Disappearing, or Just Moving to a New Landfill?
If you track what is going on with the Google+ over-promotion (long overdue post coming on that front shortly!) or how Google is still pre-paying Demand Media to upload video "content" to Youtube, Google still may be funding the same model, but doing so while gaining a tighter control of relevancy so they can better sort good stuff from crap (when you host content & track user response you have all the metrics in the world to determine how relatively good you think it is). If they over-promote these sites then in the short run they create the same skewed business model problem.
Sure hosting the user experience makes it easier to sort the wheat from the chaff, but the other big risk here is the impact on the rest of the publishing ecosystem. There will be lots of thin spam from popular people on Google+ (anyone launched a celebrity-focused Pay-Per-Plus site yet?) & in-depth editorial content might not be economically feasible in certain categories where there literally is no organic SERP above the fold.
I will complement them on their efforts to clean up some of the worst offenses (from the prior generation of "bad incentives"). If you were hit by it, Panda was every bit as big/brutal as the famous Florida update. If this update is anything near as significant as the Panda update (in how it impacts smaller independent webmasters) then it is going to force more of them/us to move up the value chain.
That may mean pain in the short run, but (for those who take it as a wake up call to develop brand & organic non-search traffic streams) far more rewards in the longrun for those who remain after the herd is thinned.
My grandfather was an autoworker, and I have a weapon he manufactured to protect himself from the company that he would carry to work. It's a big iron pipe with a hunk of lead on the head. I think about how far we've come as companies from those days, where workers had to protect themselves from the company.
I think for many SEOs the idea of starting over is painful, but the best SEOs often enjoy the forced evolution & the game of it all. They don't roll over & play dead or forget SEO. And if Google didn't put hard resets in every once in a while, then the big hedge funds would be mopping up the SERPs and cleaning our clocks with the help of Helicopter Ben.
Areas For Improvement
Of course this could be taken as a positive post toward Google (and it mostly is), but I don't want to come across as a fanboi, so I thought I should do a shout out to a couple things they still need to fix in order to be consistent:
If Google is going to tell people that thick deep content is needed to gain sustainable exposure then they shouldn't be ranking thin + pages in the SERPs just because it is a Google product. Even people who have *always* given Google the benefit of the doubt (full on fanbois) found the Google+ placement in the SERPs distasteful.
Google's AdSense is still sending out some of those automated "you are leaving money on the table" styled emails reminding publishers to use 3 ad units. If such behavior may lead to a smoke job, then the recommendation shouldn't be offered in the first place. Right below the "use 3 ad units" there needs to be a "proceed with caution" styled link (in red) that links to the recent "too many ads" post.
Old case studies that are no longer in line with best practices in the current market should have some sort of notice/notification added to them so new webmasters don't get the wrong idea.
Some of the AdSense heatmaps are roadmaps to penalization. These should have been fixed before yesterday's announcement, but if they are still up there next week then Google is willfully & intentionally trying to destroy any small business owner that follows that "best practice" advice.
Your Feedback Needed
Since this update impacted far fewer sites than the Panda update, there are fewer sample/example sites. Did any of your websites get hit? If so, how would you describe ...
So the conversation in tech media of late is that Facebook is set to become a bigger cash cow than Google.
People spend more time on Facebook. Facebook has users locked-in (kinda). Facebook "owns" the social map. Facebook is popular. Facebook is everywhere. Facebook is big.
Facebook may be all those things, but when it comes to translating "viewers" into revenue, Google currently wins hands down.
Google wins because Google's advertising is closely aligned with the users primary activity, which is to seek topics and click links. The primary activity of a user on Facebook is to socialize. Translating this activity to a commercial imperative, in a way advertisers find profitable, is the challenge Facebook faces.
The primary user activity on Facebook isn't yet as conducive to effective advertising as the topic-matching system used by Google. This shows up in the revenue data.
Google's revenue, with supposedly fewer users than Facebook, is $23.531 billion - and rising. Facebook, with more users, who reportedly spend more time on the site, has estimated revenues around $1b. Admittedly a bit of an apples-and-oranges comparison, but useful to get the two entities in perspective. Facebook is nowhere near Google in terms of advertiser revenue.
In short, being popular doesn't necessarily translate into revenue, or marketing value. Ask any popular blogger who is blogging on a non-commercial topic. It can be difficult to convert some audiences, and some activities, into revenue and advertiser value.
As a commenter, Chris Norstrom, on the TechCrunch page I linked to above pointed out:
500 Millions users does not mean those users want to accomplish EVERYTHING on your site. Facebook already tried their own version of "yahoo.Answers" and it failed. People come to facebook to lol with friends and waste time, nothing more. Not to check inboxes, not to ask questions, not to participate in groups, not to rate stores or check into places, not to send or receive money, not to edit documents.
Is he right, do you think?
Like Button Replacing The Link
Some commentators have suggested that the "like" button on Facebook will replace the link
Enter the Like button, the social solution to search, and the replacement of the link as a voting mechanism. The people as a whole are more effective at determining what content is relevant and most of those people are unfortunately not effective at creating links
A "thumbs up" system doesn't say much. It may help people find out what is most popular amongst the heard on any given day, but as anyone can see from Digg, exploding pancakes doesn't mean much, popular as the topic may be. I suspect Facebook users will use the Like button even less when they come to realise it's a form of permission marketing.
Google, on the other hand, is oriented around topical queries. Relevance is decided by alorithms that measure over a hundred different factors. It's fair to say that if a simple "Like" button worked as a means to determine relevance, Google would have implemented it years ago. They pretty much have one, but who really uses it?
In short, user voting is fraught with problems. It won't replace sophisticated algorithms. The link, the basis of the web, isn't going away.
Fit The Message To The Medium
Which, in a rather long-winded way, brings me around to my point.
The Google vs Facebook contest doesn't really matter as far as marketing is concerned. Both environments are valuable to marketers. Both need to be approached in different ways.
As we discussed in Google Keyword Research Tool: Not Popular, search is suited to concepts and services of which the searcher is already aware. Facebook is better suited to distraction media, viral campaigns, and marketing targeted at specific demographic groups.
Facebook may be useful at introducing people to new concepts - especially if those concepts fit into an existing social activity, as defined by members of a specific demographic i.e. the group "Porsche Owners Club" may be interested in new Porsche merchandise, whether they're actively seeking it or not.
Keep in mind the core function of Facebook. The Facebook user isn't likely to be actively hunting for something. They are killing time, or socializing. As a result, Facebook is less suited to direct sales, as it is difficult to determine which phase the buyer is at in the sales funnel. Facebook is more suited to brand building and awareness campaigns. It is suited to relationship building. Adjust your marketing approach accordingly.
I wonder if at some point in time if AdWords advertisers selling the scammy government grand & biz-op offers will get to use this data to target poor people with low credit scores. It only makes sense that Google would spin this positively stating that it is good for brand advertisers to find credit-worthy customers, which is the story that was marketed in the above linked piece:
Consumers with high FICO scores demonstrate some unique attributes that show they shop carefully for the best cards. For example, shoppers begin using search earlier in their application process, they use the term "best credit cards" at three times the rate of lower FICO shoppers, and they are more likely to use branded terms.
Consumers with high FICO scores use non-branded search terms more than branded -- approximately 60% of high FICO searchers. They tend to search on terms, such as "travel rewards," "low rate," and "balance transfer."
From a marketer's perspective this makes a lot of sense. Smart people who manage their credit well look for tangible benefits in their financial choices...they don't just blindly buy the brand.
Overall, we find that debt literacy is low: only about one-third of the population seems to comprehend interest compounding or the workings of credit cards. Even after controlling for demographics, we find a strong relationship between debt literacy and both financial experiences and debt loads. Specifically, individuals with lower levels of debt literacy tend to transact in high-cost manners, incurring higher fees and using high-cost borrowing. In applying our results to credit cards, we estimate that as much as one-third of the charges and fees paid by less knowledgeable individuals can be attributed to ignorance. The less knowledgeable also report that their debt loads are excessive or that they are unable to judge their debt position.
I teach contract law at Harvard Law School and I can't understand my credit card contract. I just can't. It's not designed to be read. Read the Government Accountability Office (GAO) study on this. The GAO looked at credit cards and they said: "Nobody can understand this stuff." Are you kidding me? And understand when you've got terms that say: "In effect, we'll charge anything we want any time we want for any reason or no reason at all," what's the point of reading it?
She later commented on the ideal credit card customer
Every credit card for a credit card company is like a lottery ticket. They're just waiting to see who's going to maybe stumble a little. Maybe get into trouble on a car loan. Maybe nothing at all except they just look vulnerable. They're just in the right zip code. They're just the right profile for people who won't be able to run any place else. And those are the ones you slam. Those are the ones you hit with the 29 percent interest rate, the 35 percent interest rate, the new fees. And then, because of course if you can't pay it, then you get hit with a fee for not paying or for paying late, for going over limit. And the game is afoot. With any luck at all from the credit card company's perspective, these people will become little annuities that will just keep generating profits for the credit card companies for months, for years, maybe forever.
The idea of only servicing legitimate debt needs of customers that can afford their credit card bills has made banking industry executives so angry that they are threatening hitting consumers with lots of bogus new "conveninece" fees:
Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
This new consumer-credit profiling Google is offering will be far more profitable to use on the poor, the weak, the desperate, the ignorant, and the uneducated. In early research Lawrence Page and Sergey Brin stated
Since it is very difficult even for experts to evaluate search engines, search engine bias is particularly insidious. ... We believe the issue of advertising causes enough mixed incentives that it is crucial to have a competitive search engine that is transparent and in the academic realm.
So were they right back then? Or are the right now? They can't be both.
Update: Sandra from Google's PR team emailed me the following
I've included an outline of the research methodology below the body of this note. Please let me know if you have questions or need clarification on any of the below -- or anything else, for that matter.
* Compete conducted a clickstream analysis on their opt-in panel of 2 million US online consumers, to associate FICO score categories with sites in the Google Content Network.
o The analysis took a look at the online behavior of Compete's opt-in panelists who shopped for or applied for a credit card online between January and March 2009, for the 30 days prior to the application and/or research.
+ Compete, via a sister company that provides secure matching of certain characteristics (one of which is FICO scores) to anonymous/anonymized individuals in the Compete panel, segmented the opt-in panelists into one of three categories, based on their FICO score: Super Prime (720 and above), Prime (600 to 719), and Sub-Prime (below 600).
+ Individual scores and personally identifiable information were not used by Compete, nor were they received by Google.
o Google provided Compete with a list of all sites in the Google Content Network.
o Compete compared how panelists in each FICO band searched and where the panelists spent time on the GCN, and ranked each GCN site based on its ability to reach consumers in particular FICO score bands.
o The ranking/scores of the GCN sites were passed on to Google -- not any information about the credit scores of individuals.
Some areas of the economy are going well still, but many are crumbling. If you are a publisher that monetizes via advertising one way to make up for lost earnings is to add more ad units to a page, but if something is not working then doing more of it is probably a bad solution for fixing the problem. If ad prices drop then adding more irrelevant and cheaper ads to the site will not do much for increasing your current revenue, and it might sacrifice some of your future revenue!
Another option is to show fewer ads to create a better user experience. Under-monetize today to make your site look more appealing, increase usability, be more linkworthy, and steal market-share from larger competitors. If the ad market goes too far out of whack you can always move from being an ad seller to becoming a strategic ad buyer. If you gain enough marketshare to tread water while competing businesses and business models collapse then you are doing well, while positioning yourself nicely for the rebound.
Then when the market turns up you can place more ads on your site and monetize aggressively while it is actually worth doing so. Then you would have higher monetization * better rankings & traffic * more ad units per page, with each input compounding the earning power of the next.
On some sites we only monetize key pages while making others white as snow easy to link at. For new sites I skip the ads until the site gets some links, starts ranking and has a solid traffic stream. I like to call this line of thinking conditional advertising, where you adjust your monetization strategy based on your site's market position and the condition of the market.
In the past I have been a bit hard on AdSense, stating how it cannibalizes publishing, but there are some up sides to Google's AdSense too. Many people talk about the ease of implementation, scalability, and lack of maintenance cost, but 4 more rarely talked about benefits are...
Safety From Google Editors: Since AdSense is a Google product you never have to worry about internal Google quality rating guidelines calling an AdSense link a sneaky redirect (like they do with CJ links).
Profit From Spam: If you have a pharmacy affiliate or payday loan site then many people will consider the site spam by default. But if you tastefully write an article about such topics and then just happen to have AdSense on the page you are not viewed as a spammer by the general web public - Google (and AdSense) are a ubiquitous part of the web.
People Under-estimate Your Earnings: Many web publishers have published AdSense sites and made nothing. Thus if they see you publishing an AdSense site they may assume that your site earns nothing, and be less likely to clone your site and more willing to link at your site than they would be if your site appeared more commercially oriented.
The Informational Bias of Organic Links:Information is generally considered more citation-worthy than pages that sell stuff. Thus if you monetize via AdSense you can get inbound links to the money making pages without having to buy links. With most commercial offers you are stuck building links to other related pages and hope that internal anchor text & domain authority lift the page's rankings.
Longterm from a business sustainability standpoint it is nice to have direct ad revenues not controlled by Google, but AdSense can make for some nice short-term cash flow.
"We're heading down a path where it no longer suits our business needs to work with ad networks," said Eric Johnson, executive vp, multimedia sales, ESPN Customer Marketing and Sales. Sources say that ESPN would like to rally support from other publishers behind this move and ultimately tamp down ad networks' growth. Turner's digital ad sales wing is rumored to be considering a similar move, though officials said no decisions are imminent.
The two logical options from there are
set a floor price on house content and show fewer ads to offer a better user experience
look at currently hot stories, key markets in the weeks and months ahead, and market positions where you are close to leading but do not yet dominate and advertise your own products and services
add interactive features to your own site which increase brand loyalty and reduce content creation costs...which end up making the ad networks a more viable offering for back-fill content
If the ad networks are too cheap buy out inventory on competing sites to further distance yourself from them as the market leader.
All of those strategies allow you to buy market-share in your vertical on the cheap. The more of your market you own the better you will be able to sell ads for. If ESPN was 60% of the sports market Nike would be required to buy ads with them, largely based on ESPN's terms. Part of being remarkable is about creating featured content, but an equally important piece is making sure you are branded as the leading source. There is no better place to market your content and ideas than your own site.
Big news by Google. After announcing the DoubleClick acquisition (~ 60% of the display ad market), Google announced the launch of Ad Manager, a free ad management tool with built in yield optimization. Ad Manager allows you to sell direct ads, and then backfill with AdSense and/or any other ad networks you choose. Huge for Google for 5 reasons:
minimizes the value and risk of competition from larger ad exchanges like Right Media, smaller start ups like the Rubicon project, and open source ad networks like OpenAds
gives them yet another way to follow web users across the web to create a proprietary web graph based on usage data (along with Google Analytics, Feedburner, RSS Reader, iGoogle, AdSense, search accounts, Gmail, Google Talk, Youtube embeds, and Google Toolbars)
allows them to spy on other ad networks such that they can quickly buy out the competition and/or clone any features from newer ad networks more profitable than their own
this allows Google to establish more meaningful relationships with publishers, and help recruit publishers to the DoubleClick level once they get big enough
Google has yet another way to spy on any competing web service (outside of ad networks) and be alerted to change before any competing networks
YouTube probably gets about as many pageviews as Google does. By aggressively running display ads on YouTube, Google could likely take that 60% marketshare to 75% in a matter of months. Add in the self-serve expanded network for smaller publishers, and they are well over 80% of the ad display market inside a year.
When the economy is good and advertisers have robust ad budgets, an ad network might be willing to sell them whatever they are willing to buy. If the advertiser wants to overpay for some ads and associate that spend with branding then so be it. But when the economy slows down, the ad marketplace needs to separate the best ad inventory from the weakest ad inventory to protect the rates of their best ads.
From Google's perspective, search is the golden goose tied directly with conversions. Syndicated ads, which can lead to conversions, may often carry a premium price based on branding value. Here are some of the forces that might be lowering AdSense earnings
Some brand advertisers cutting their ad budgets, trimming brand related ads before they cut direct response ads.
Those brand ads being replaced by less trustworthy ads from smaller advertisers who bid less and are less likely to get clicked on.
Google changing the clickable region of AdSense ad units.
Google lowering the estimated value of content clicks to help protect the value of search clicks and shift more of their network spend toward search.
Given Google's market dominance over the contextual ad market there is virtually no floor to how low they can price AdSense ads on non-premium publishing partner websites.
I have one site where the ads are AGGRESSIVELY integrated into the content, where that site gets thousands of search driven visitors per day in a big money vertical. That site has a CPM rate which is roughly equal to what one to two clicks would cost if I had to buy that traffic from Google directly (rather than me arbitraging their organic search results then selling that traffic). Clearly there has to be a better way to monetize that site. The ad prices are so cheap that I would be the buyer if I had a higher value model in that space.
If you have been using AdSense as a business model now is a great time to create new revenue streams and test shifting from an AdSense ad seller to an AdSense ad buyer.
Since Google largely tends to favor ranking informational websites over commercial websites, some authoritative blogs tend to rank for valuable queries based on posts they make in passing.
Even if you had no intent to monetize a post, it just became easier to monetize accidental rankings. If you use analytics to track your stats and notice that you start ranking for some good keywords you can use Triggit to embed links to merchant products directly in the text of your blog post.
Shoemoney created this quick video to show how Triggit works
Unlike the automated ad solutions like intellitxt or AdSense, these Triggit ads
look like other regular links on the page (so they should get a high CTR)
can easily be applied on a page by page level (so you do not have to clutter up every page to monetize the few pages that can make a lot of money)
link to products recommended by the editor (to preserve editorial integrity)
can link to merchants that pay via affiliate payout or CPC (offering multiple monetization models)
allow you to keep your pages clean (and easy to link at) until they rank, then have you add monetization after you have a leading market position for related keywords
Triggit ads are easy to set up and should require little maintenance on the end user's side, but they are still a small start up, so if you start doing well with them make sure you remember which pages do well so you can keep monetizing the pages if the Triggit partnership stops working, and so you can track which pages you should try to monetize more aggressively and/or build links to.
As blended semi-editorial in content ad networks like these evolve, the distinction between optimization and spam blurs. And since Google has a similar product, it is going to be hard to view this in a negative light without looking hypocritical in the process. From Google's pay per action page:
Text links are hyperlinked brief text descriptions that take on the characteristics of a publisher's page. Publishers can place them in line with other text to better blend the ad and promote your product.
For example, you might see the following text link embedded in a publisher's recommendatory text: "Widgets are fun! I encourage all my friends to Buy a high-quality widget today." (Mousing over the link will display "Ads by Google" to identify these as pay-per-action ads).
Though the maximum length of a text link is 90 characters, we've found that shorter links perform better because they allow the publisher use the link in more places on her/his site and in different context. The maximum length is 90 characters but less than 5 words is best. Even better, just use your brand name to offer maximum flexibility to the publisher.
As an advertiser and a publisher I have ad CTR data spanning hundreds of millions of impressions and about a million ad clicks across a wide array of verticals. One of my early opinions on contextual ads and search ads was that people are far more likely to click ads if they are desperate, stupid, or ignorant. While I was flamed for my opinion, this opinion has only been confirmed from talking to friends who have much more data than I do, and Dave Morgan from AOL also confirmed it.
Based on what I've seen qualitatively, my hypothesis would be that heavy ad clickers are:
More representative of lower income households than the average user.
Less educated than the average user (or from less-educated environments in the case of minors).
More likely to live outside of the major metro regions.
More likely to be using [social networks] to meet new people than the average user (who is more likely to be using SNSs to maintain connections).
The problem with catering to the lowest common denominator is that the people who are clicking the ads
have less of an ability to buy premium products
are less likely to do follow on marketing for you to promote your products to other
are a small minority of your visitors
are driven away from your site when they click
each day many ignorant users learn more about the web and click less ads
the new users coming on the web replacing those who are learning about it are even poorer and less socially connected than those already on the network
In the next couple years there is going to be a major shift in online ad based business models where many publishers push themselves up the value chain. The trend for profitable publishing, is going to include the following aspects
ads with more information
ads that look more like information
ads tighter integrated into the content
having a semi-porous brand which allows your free content to do your marketing for your paid content
in many case selling ads that include personal endorsement, and ads for white label products or house products (often via subscription)
As more premium publishers shift from ad based models to selling white labeled and house products it is going to get harder to buy ads affordably on the clean parts of the web. And the trend has already started. If you look at some of the most popular investment sites you will see that many of them provide free offers for products that lead you into buying a subscription service.