Google AdSense as a Terrible Business Model

I am still a fan of AdSense as a way of determining a baseline income potential for a site, but I don't see it as a long-term viable business model for most small publishers. Why?

Smart Pricing (or Maybe Dumb Publishing?)

I friend told me how much he made from AdSense a year ago, and in spite of increasing his network pageviews 200% since then his earnings this month are 10% lower than they were a year ago.

And Google still does a sloppy job policing their partner network. What happens if their editorial review costs increase. What does that do to the percent of ad income Google needs to keep to keep growing?

A Glut of Publishing:

It is getting easier and easier to publish online. The number of people writing is probably growing at a faster rate than the number (and income of) of people reading, which means you will have to be more compelling and put more effort into your content and marketing if you want to keep your pageviews up.

And Google has been placing more weight on authoritative domains, which is squeezing many small players out of ranking in the search results.

Newspaper & Magazine Archives: More Glut:

As business deals are worked out, and trusted archived content comes online, many business models based on AdSense spam will lose a large portion of their traffic to mainstream media companies that are not currently fully leveraging their archives.

If Google bought YouTube how long before they buy Olive Software or create a similar technology?

Frothy Ad Market:

I just saw a big, ugly, and obtrusive AOL ad on Amazon.com's home page. If people are buying general untargeted graphic ads on the largest retail site they must be overpaying for it.

A Lack of Competition:

Some of the executives of Yahoo!'s Publisher program recently announced they were quiting, and with Google's lead in the contextual ad space with virtually no competition, I have to take that as a bad sign for Yahoo!, and for independent publishers in general.

Google's General Arrogance:

Today many publishers noticed bright Google logos in their ad boxes inviting readers to sign up for AdSense.

Potential Text Ad Blindness:

People have learned to ignore banners and common ad locations. How long until people learn to ignore common AdSense formats, especially as the ads appear so prevalently on so many sites? What if people become more receptive to identifying ads (even in the content area)?

Not Worth It:

Add all those up and it gets a bit bleak looking to AdSense as anything more than a baseline estimate for effortless income or a backfill for unsold inventory.

What if instead of monetizing every page, niche publishers used most of their pages to keep attention and link equity flowing their way, and then just monetized targeted high value sections of their sites using well integrated affiliate offers and/or selling direct products?

How Google AdWords Ads Manipulate Google's Organic Search Results

SEO Question: I was thinking about buying Google AdWords and AdSense ads or placing AdSense on my site. Will doing any of these increase my link count, Google rankings, or rankings in other search engines?

Answer: PPC ads go through redirects, so they do not count toward your link popularity, but there are other ways to tie together PPC ads and organic search placement. Search engines claim there is no direct linkage between buying ads and ranking, but they only talk in ideals because it helps reinforce their worldview and help them make more money.

Buying AdWords Ads

What They Won't Tell You:
Highly commercial keywords may have the associated editorial results go through more relevancy filters and/or be editorially reviewed for relevancy more frequently. Also, because they want people to click on the AdWords ads there is a heavy informational bias on the oranic search results.

I know some people who have large ad spends that get notifications of new ad system changes ahead of time, and others who get to give direct feedback to allow them to participate in cleaning up search results and minimizing unfair competing actions in the ad systems. So that is one type of cross-over / feedback that exists, but I think that tends to be more rare, and the more important cross over / feedback that exists is an indirect one.

Just by Being Real
You can't really explain why and how everyone does what they do. Some people who find your product and enjoy it enough to leave glowing testimonials will even tell you that they don't know how they found it.

In the same way that targeted ads can lead to purchases, they can also lead to an increase in mindshare, brand, reach, usage data, and linkage data. Just by being real and being seen you are going to pick up quality signals. If you try to factor all of those into your ad buys most markets are still under-priced.

Cross Over Due to Buying AdWords:
A well thought out pay per click campaign can feed into your SEO campaign more ways than I can count. Here are a few examples.

Integrating Offline & Online:
In a TV commercial Pontiac told people to search Google, and got a ton of press.

Big Controversial Ads:
Mazda quickly bid on Pontiac.

Many companies also have strong ties between the legal and marketing departments. If buying or selling an ad gets you sued and gets you in the news the value of the news coverage can far exceed the cost of the ads and legal fees.

Small Controversial Ads:
When I was newer to the field one friend called me the original link spammer. He meant it as a compliment, and I still take it as one. In much the same way I was an aggressive link builder, I was also quite aggressive at ad buying.

I caused controversy by buying names of other people in the industry as AdWords ads. I was prettymuch a total unknown when I did that, but some of the top names in the industry elevated my status by placing my name in heated discussion about what was fair and reasonable or not.

You can always consider placing controversial / risky ideas or ads against your brand or competing brands as a way to generate discussion (but of course consider legal ahead of time).

Drafting Off New Words & Industry News:
When the nigritude ultramarine SEO contest started I bid on AdWords. Some people discussing the contest mentioned that I bid on that word. If an event bubbles up to gain mainstream coverage and you make it easy to identify your name as being associated with it then you might pick up some press coverage.

Industry buzz words that are discussed often have significant mindshare, get searched for frequently, and larger / bureaucratic competitors are going to struggle to be as plugged into the market as you are or react as quickly to the changing language.

Snagging a Market Position Early:
When a friend recommended I read the TrustRank research paper in February of last year I knew it was going to become an important idea (especially because that same friend is brilliant, helped me more ways and times than I can count, and was the guy who came up with the idea of naming the Google Dances).

I read it and posted a TrustRank synopsis. In addition to trying to build a bit of linkage for that idea I also ensured that I bought that keyword on AdWords. Today I rank #1 in Google for TrustRank, and I still think I am the only person buying that keyword, which I find fascinating given how many people use that word and how saturated this market is.

Buying AdSense Ads

Buying Ads Creates Content:
If your ads are seen on forums people may ask about your product or brands. I know I have seen a number of threads on SEO forums that were started with something like I saw this SEO Book ad and I was wondering what everyone thought of it. Some people who start talking about you might not even click your ads.

Each month my brand gets millions and millions of ad impressions at an exceptionally reasonable price, especially when you factor in the indirect values.

Appealing to an Important Individual:
I have seen many people advertise on AdSense targeting one site at a time, placing the webmaster's name in the ad copy. It may seem a bit curt for some, but it is probably more likely to get the attention of and a response from a person than if you request a link from them.

Ads are another type / means of communication.

Appealing to a Group of People:
I get a ton of email relating to blogs and blogging. And in Gmail I keep seeing Pew Internet ads over and over and over again. Their ads range from Portrait of a Blogger to Who are Bloggers?

Going forward they will have added mindshare, link equity, and a report branded with that group of people. When people report on blogging or do research about blogging in the future the Pew report is likely to be referenced many times.

Selling AdSense Ads

Don't Sell Yourself Short:
Given the self reinforcing nature of links (see Filthy Linking Rich) anything that undermines your authority will cause you to get less free exposure going forward. So you really have to be careful with monetization. If you do it for maximal clickthough rate that will end up costing you a lot of trust and link equity.

There are other ways to improve your AdSense CTR and earnings without costing your credibility and authority.

More tips:

Don't Monetize Too Early:
Given the lack of monetization ability of a new site with few visitors and the importance of repeat visits in building trust and mindshare you don't want to monetize a new site too aggressively unless it is an ecommerce type site. It is hard to build authority if people view your site as just enough content to wrap around the AdSense.

Spam, Footprints, & Smart Pricing:
In the past search engines may have discounted pages that had poison words on them. Search is all about math / communication / patterns.

If your site fits the footprints of many spammy sites then your site might be flagged for review or reduced in authority. MSN did research on detecting spam via footprints, and link spam detection based on mass estimation shows how power laws could make it easy to detect such footprints.

Graywolf recently noted that landing page slippage may be an input into landing page and site quality scores for AdWords ad buyers. Google could also use AdSense account earnings or AdSense CTR data to flag sites for editorial reviews, organic search demotion, ad payout reduction, or smart pricing.

Off Targeted Ads as an Opportunity

If you create a site about information retrieval and see medical ads on it that might be a good sign there is a bunch of money in that market.

  • Google's internal AdSense optimization is based on earnings potential. If they give an ad excessive exposure, even on off topic sites, it probably means that the ads stand a good chance of being expensive.

  • If advertisers are buying expensive clicks from off topic sites then they got plenty of budget to blow through.

I am not saying that off topic ads are a great thing long-term, but they might make for an easy way to follow the money trail. If you have any interest in the ad topic then create a few pages about it and test the earnings potential. You might also consider joining a related affiliate program and buying cheap traffic through other ad networks, such as AdBrite.

In case you think this off targeted advertising is a short term condition, consider the following data points...

Recent market size:

The most startling fact about 2002 is that the combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses put together ($33.7 billion). - Marcia Angell

Future growth prospects:

If medical spending rises to 25% of gross domestic product by 2030, as many economists expect, health care's share of jobs could grow to 15% or 16% of the labor market from today's 12%, based on historical patterns.

Such a shift in employment would require health care to be the single biggest creator of jobs in the economy for the foreseeable future. And while the U.S. could in theory afford to spend 25% of GDP on health care, it's hard to imagine a world in which our children have to choose between working for the local hospital or the local health insurer. - Business Week

Drug companies are off manufacturing diseases to make up for our poor rushed choices and hollow lifestyles:

75 million Americans may have something called metabolic syndrome. How Big Pharma turned obesity into a disease – then invented the drugs to cure it. - Wired

Drug companies sponsor research

The Center for Science in the Public Interest found that 96 percent of the industry-funded efficacy studies of drugs like Prozac, Zoloft, and Paxil in children were positive. That compares to just 63 percent of independently funded studies published in medical journals.
...
If one looks at just published clinical trials that contained a placebo-controlled arm, industry-funded clinicians reported the drugs were effective in 9 out of 10 cases. But among researchers not funded by industry, only 5 out of 9 reported positive results, which is surprisingly low given that other studies have shown that medical journals are biased toward publishing positive reports. By comparison, just 3 of 15 FDA reviews of pediatric antidepressant trials, many of which have not been published, were positive. - Center for Science in the Public Interest

Drug companies market directly to consumers via shady prescribe yourself websites.

And if all the above wasn't scary enough, consider the fraud baked right into the system:

The Justice Department has charged a former chief of the Food and Drug Administration with lying about his ownership of stock in companies regulated by the agency, according to media reports on Monday. The government accused Lester Crawford with falsely reporting that he had sold stock in companies while he continued holding shares in firms governed by FDA rules, the Associated Press reported. - MarketWatch

Do AdSense Earnings Scale With Page Count?

WebmasterWorld has a thread about scaling AdSense earnings out with site size. The thesis being pushed is that site earnings is not a linear function tied to site size. For many sites that statement is true, but part of the reason it is true is that some webmasters do not leverage feedback their current site gives them. On small sites I look at ad clicks on a per page level to see what pages are bringing in real money. I like to start new sites with at least 3 (and sometimes up to 5 or 6) global navigation sections. Each global navigational section acts as a mini site which can be expandable based on market feedback. Wherever I start ranking AND getting clicks on decently priced ads gets more attention.

Given the amount of authority a site has (or will gain due to the amount of effort I am willing to put into a project) you can sorta estimate how deep you can go and how broad your initial site focus should be. The beauty of my partitioning idea is that I do everything with includes such that it takes under a minute to add another global navigational element and it is also easy to broaden the overall site focus if it is ranking well in all the verticals you targeted and there is not much left on the depth front in the verticals you are already targeting.

Also if your site is small enough and you set up page level clickthrough tracking and track the search queries sometimes early in the morning you can see what a page is earning or what some specific queries earn. Another big indication of page level earnings for some of the more important concepts is going to be a change in overall site earnings due to a page suddenly ranking well or a page that dropped out of good grace with one or more of the major search engines.

When you branch out with new sections it is also important to give yourself the opportunity to put a foot in the water before committing to a bunch of work. For example, a friend recently started creating pages about topic + all 50 states. I told him that I would have started off with the 3 to 5 states that best fit the purpose of the site and had the most demand. Now he is 30 states into the project and a bit bored with it, and as it turns out the ad targeting on those pages is not as great as the ad targeting on the other pages, and there isn't much search traffic.

A couple of the other pages on the site are making the bulk of his earnings due to being highly commercially oriented, heavily using semantically related words, and avoiding excessive duplication.

If a site is working on limited authority it might be worth spending extra time to create a bit of link bait to help ensure you have enough authority to keep getting new pages indexed and ranking. A while ago I also made a post titled Factors Affecting AdSense Ad Clickthrough Rate and Earnings Potential.

Factors Affecting AdSense Ad Clickthrough Rate and Earnings Potential

This post topic has the ability to quickly get me steamrolled and a lot of hate, but I think advertisement clickthrough rate is something well worth considering before creating any website that is monetized via pay per click ads. I have recently launched a number of AdSense monetized sites and these are some of my early thoughts on factors affecting monetization and CTR.

Are there Any Ads? Are the Ads Relevant? Is There Any Search Volume?
If you search for Google and nobody is advertising for your targeted industry or phrase sets the opportunities to make money are going to be rather limited. The same holds true if the traffic volume is low or the bid prices are dirt. The Google Traffic Estimator Tool makes it pretty easy to get an estimate of the bid prices and AdWords click volume while the Google Keyword Tool lets you check the depth of competition quickly. You can also use Shawn's Google AdSense Sandbox to see how compelling and relevant ad offers are for a specific topic.

Signs of Desperation, Ignorance, or Stupidity
I am sure this category might get me a bit of heat, but I own one website that was getting about 400 pageviews a day about a specific topic. Adding a single page catering to some ignorant people in that vertical (one could assume a certain level of ignorance by their search queries - sorry but I can't give that term away) added 50 pageviews a day and doubled the ad clicks and earnings for the site.

Dumb or naive people are less likely to realize they are clicking paid ads when they land on your page.

What are some common signs of intelligence or lack of intelligence? Or signs of naiveness?

  • topics for kids - they clearly are going to be operating on limited business experience and limited financial and business understanding, and thus may click click click without thinking anything of it. I have a site that caters to a broad field, but the page most focused on kid friendly searches has a 50% ad clickthrough rate, whereas the next best page is coming in at 18%, and the site averages around 10%.

  • searching for things that do not exist - these are going to be easier to rank for than their official alternatives. These searches may be an indication of intelligence or lack of intelligence depending on vertical and query. From my limited experience, more frequently they will likely indicate a lack of intelligence, but it really depends on the reason WHY the market has yet to fill the demand.
  • misspellings and misuse of language - I am a bad speller so I offer no hate here, but on average most misspelled queries come from people who are below average on the intelligence scale
  • poor credit or lack of financial planning - sure we all go through ruts, but the average person looking for a payday loan is going to be less intelligent than the average person looking for a mortgage loan
  • general topic - the average person searching for scientific information is going to be smarter than the average person searching for a personality on Fox News or American Idol.
  • demographics - old and young people may not be clued into how the web works. Some other demographics may be more or less clued in. Many search queries may do a great deal to identify the gender, age group, or ethnicity of the searcher.
  • traffic source - On average the average Google user is going to be smarter than the average MSN Search user, who is going to be smarter than the average free spyware download search accelerator searcher.
  • query length and syntax - advanced search queries and specific long tail searches are most likely going to be from smarter searchers or searchers closer to purchasing.

Searches That Signify the Desire for Advertisements
Targeted buying searches and comparison searches may be searchers that are looking for just a bit more info before converting, perhaps through one of your ads.

Ad Integration
The more ads look like content the more they get clicked on. Default blue is a beautiful link color. Some people do well by placing images near their AdSense ads.

Quality and Quantity of Ad Alternatives
Content that is of amazing quality that solves the visitor's problems may make the ads look less appealing, although if it allows you to become the industry standard resource that additional distribution can more than pay for the added cost of creating real quality content.

If a page is a resource link list or has many alternative paths to leave the site outside of an ad click many people will take those paths.

Are the top SERPs dominated by real resources?
If the top results are quality informational PR7 .edu pages best of luck on the rankings front. You are going to need it ;)

If the top sites are cloaked pages or other sites that do not look like real resources it is easier to get your listing clicked on by crafting a quality page title and meta description.

Does Your Site Have Enough Authority?
As recently posted by Quadzilla, if you have authority it seems you can extend it out cross topic. If you lack link authority and age related trust it is an uphill battle to compete in Google.

How Much Commitment is Required to Buy?
Buying a home is a much more extensive and expensive process than buying a treadmill.

How Web Friendly is Your Product Offering?
Ads for physical books, heavy commodities or things like diamonds (which perhaps require some amount of trust to purchase) are going to go for far less than they are worth when compared to ads for items that fit the web nearly perfectly (take software or ebooks as examples).

AdSense vs SpamSense: AdSense Tips and Linkworthy Content

Many affiliate and AdSense sites make their goals so obvious that it likely hurts the linkability of their websites. Sometimes you can still get a fairly solid clickthrough rate on your ads while still having a site that is much easier to link at than the typical SpamSense site.

The few biggest keys I would suggest to increasing your income per pageview without hurting your linkability would be:

  • Build decent topical authority and a good link profile before worrying about getting as much money as you can out of visitors. Links are a currency, and without them your other options and earnings potential are at best limited.

  • Less ads on the homepage than the rest of the site - for many sites (even many entirely legitimate ones) the bulk of the link popularity flows in through the home page. In some cases that link popularity is self reinforcing to where people search for your main topic, find your site, and then link at it. Making a quick proper impression in those cases is huge. That link popularity makes your other pages more authoritative.
  • Adding a search box is easy incremental income without increasing your perceived ad weight.
  • Blending adlinks into navigation or near images can help improve CTR.
  • A skyscraper ad on the left column where navigation usually is can pull a great CTR without making the whole site look spammy, so long as the site looks like its main goal is to push the ads.
  • A skyscraper on the right hand column probably won't make much because that is a traditional ad location.
  • If you control your page width it is easier to integrate high CTR ads than if you use fluid designs.
  • If you put ads in the content area near the top of the page, if they go left and the content floats right around it that looks pretty spammy. If you float the content to the left side of the ads it can still get a decent CTR without looking anywhere near as spamtastic.

Google Adlinks: Selling User Trust on Bait and Switch Targeting

I have not tested Google Adlinks on many of my sites much, but there are other sites that talk about me in threads.

I was sorta curious how Google picked "Aaron Wall SEO Book" as a link topic and wanted to see what ads they display for it.

I have so many relevancy points for those types of searches:

  • I rank #1 for either phrase or them both together

  • My conversion rate for those searches is amazing and I have Google Analytics enabled so they know how amazingly high the conversion rates are.
  • If you search for either of those phrases (or the phrases together) I am at worst #2 on AdWords (am typically #1).
  • I have AdSense content ads enabled with a wide variety of those types of terms in it and am nowhere near my daily budget on that ad campaign

and yet when I clicked that Aaron Wall SEO Book adlink I did not appear in the ad search results. I also clicked the SEO Inc. adlink and their ad was #9 for their own trademark name.

I realize to Google it is all just math, numbers, money-in-the-bank, yada, yada, but if it is wrong for competitors to use trademark terms in ad copy how wrong (and perhaps even a bit unethical really - since search engines want to push the bullshit ethics angle) is it for Google to create adlink searches using trademarked terms to drive them and potentially not list the trademark sites or any editorial search results?

Is that legitimate comparative advertising? What would Sony think if Google delivered Playstation adlinks that delivered ads for nothing but XBox games. What happens if Yahoo! sells a link named Google that leads to transexual porn ads? Where is the line drawn in the sand?

Is everyone that develops a legitimate brand forced into paying Google through the nose for Adlinks on their products or brands so they don't have Google flush their brand equity down the toilet?

I bet if you search around there are probably some interesting adlinks that are complete bait and switch on trademark terms. Is there any cases associated with the liability of doing that? Should there be?

I am a big believer in aggressive advertising, but is it deceptive for Google to use a trademark term in a link to drive a query to a bunch of ads that may have nothing to do with that topic?

How is this Google adlinks technique any better than typosquatting?

Johnny Cash Biography AdSense Targeting on Amazon.com

Recently there was a biopic by the name of Walk the Line featuring Johnny Cash's life. The movie is so popular that the soundtrack and 2 of Johnny Cash's CDs are on the Amazon top 25 CDs list.

Johnny Cash's autobiography is a top 500 selling book on Amazon and yet the page had the following ads:

Off targeted AdSense ads.

I thought AdSense was better at targeting than that? Especially for such currently commercially popular and in the news topics? Hmm.

That certainly shows Google still has a long way to go to improve their targeting and profits from contextual ads.

As a special bonus, if you like music you really ought to watch this video.

Ford Explorer Teaches Me to Ignore Google AdWords Ads

So I have been doing a bit of surfing around recently and I have been seeing Ford Explorer AdSense ads everywhere.

Are they bidding on a list of stop words or the letters of the alphabet perhaps? At $8 a click? Or what is up with those ads being everywhere? I thought the US auto industry was screwed? While GM is in the hurt locker it doesn't seem Ford is fairing much better.

By Google delivering those damn Explorer ads that are so far off target they are teaching site visitors to ignore the ads, and may be costing themselves and publishers a lot more than they realize. If people learn to ignore textual ads then funding good content production is much harder. If people can't afford to make good content then Google is going to be full of garbage.

I know I have read a number of times about how Google did not like when people bought off topic links. Do they think they are doing the web a favor by putting those Explorer ads on exceptionally off target websites? Where does the targeting end? Why is it legitimate to publish AdSense ads so far off topic if off topic links are bad?

Of course it would be ironic if the ads were behavioral and typing this post meant Ford ads for the next 5 years for me.

Angel Funding Via Google AdSense

When I recently interviewed Matt Cutts he stated that many companies at the Web 2.0 conference were powered by AdSense. Kevin Burton hopes to take AdSense one step further, using it for angel funding for TailRank. Some others are already donating their AdSense.

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