The remaining portion that we keep reflects Google's costs for our continued investment in AdSense
Where did Google's honesty go?
Google is wildly profitable. This post tries to convince you that they charge you for their costs only. That's just plain misleading.
A core part of Google's PR strategy, brand image, and even self-conception is that they're just a bunch of cuddly academics carrying the lamp of knowledge to the world and not, oh, a multi-national advertising firm with 35% margins.
jeddy jed jed (are you cool with being called that?) - it looks like you are technically right, but Google perfectly worded the sentence to make it sound like they are not making a huge profit, but instead are simply covering costs. I also strongly believe this is and was their intent.
Thanks for you comment, but I don't see the need for the straw manning you pulled.
I'd at least be able to understand the apparent contempt in your comment if it looked like there were a decent amount of comments in this thread that weren't doing exactly what I did by writing the obvious.
On a side note - cheer up man, life is too short for negativity on a personal level.
You're misreading the tone of the post. Google isn't a charity. Their portion of the revshare includes a portion profit and a portion of the cost of adserving.
The difference is how wildly profitable Adsense is. The sentence does not at all give this intent and I would assume anyone reading this post without a lot of Google-finance-knowledge would not expect their margins to be as high as they are.
Doesn't mention the words Profit or Value, which is either bad business practice (I doubt it) or a touch of being disingenuous.
Some of that revenue goes into profit as you note, even if that profit is then reinvested.
And fee structures should never change only because costs have change, which they indicate may be the case. If you start delivering more (or less) value, it's fair to increase (or decrease) your price / revenue share. Focus on value, not on costs, and you will build a much more profitable business.
I may be missing the point here, but I don't think that this announcement actually says much about what we as individual publishers can expect as rev share.
What I understand from the article is that 68% of the aggregated revenue generated by all the publishers is payed back by Google to the publishers, probably not evenly.
If the figures given are simple averages (TOTAL_AD_REVENUE / TOTAL_NUMBER_OF_PUBLISHERS) then it is not an useful figure for individual publishers. For example, it may mean that a handful of huge publishers are getting a revenue share of 90% but the vast majority of medium and small publishers are getting 20%. You would still not know how much is the typical publisher getting.
Until I see more information about how the 68% and the 51% figures were calculated and about whether all publishers get the same or similar rates, then I will still have no idea what the effective rev share for a typical small publisher (less than 1,000,000 pageviews/month) is.
The Adsense team have clarified this point themselves in a comment to the original article:
"The 68% revenue share for AdSense for content applies to all online publishers, and is not an average revenue share. If you're showing AdSense for content ads on your pages, you're receiving 68% of the amount advertisers pay for those ads. While the revenue share can vary for some major online publishers with whom we negotiate individual contracts, these amounts are not in any way averaged together. Also, there isn’t anything additional taken off the top. You get 68 percent, period." [http://adsense.blogspot.com/2010/05/adsense-revenue-share.ht...]
Thanks. I'm a bit anti-Google in that I don't like any big companies controlling large portions of markets (Google -> Search). But it's important to remember to wait for proof of claims and to see people's true intentions and not taking things for granted. For instance, I immediately muttered "frickin Google" upon reading Battelle's post without even thinking that he was a competitor blogging without proof.
It is interesting that even though my post is still a valid statement, it is getting heavily moderated down merely because a third-party made a boo-boo :-)
There is something about that outcome that could dissuade one from posting references to controversial or mutable statements in future.
At levels above "webmaster welfare" (as my SEO friends call it), you can do direct ad sales or affiliate ads.
A smart guy once suggested to me that when trying to sell ads on a semi-successful site he would "give" one of the six ad slots to an affiliate-using merchant by using their standard affiliate creative in the slot, and watch what revenue was from that. That would both give social proof to the site ("Look! It already sold one ad!"), and give him a floor to establish prices on the remaining inventory. If you can make e.g. $60 a month with on affiliate ad, then charge everybody else $100 a month for the same slot.
Apparently, in many niches, "Your ad in this space. Click here." works well enough to sell out inventory for small sites. There are many, many options for you if you want to make it a self-service thing rather than a "Email me, hammer out an agreement, and after you Paypal me the money I'll add your link directly in myself."
[Edit: At higher levels of deviousness it occurs to me that why have one filled slot and five empty ones when you can have five filled slots and one empty ones. This space is going, going, gone -- get it before it becomes booked!
Don't like affiliate ads? Advertise your favorite OSS project. You can always rejigger things once your "last" spot sells, dropping one of the donated "ads" from the rotation and freeing up another "last" spot.]
What you're calling devious is what most of us would call effective use of marketing psychology. Cialdini has written a bunch about it, and I think it's gotten into the collective marketing consciousness as the "scarcity principal". It's used everywhere else ("Act now! Supplies are limited!"), why not on the web?
I'm going to assume the OP is calling all marketing psychology devious. Would you not agree? I know devious has a harsh connotation to it, but strictly looking at its definition, it seems to fit with your last two sentences.
Direct sales are the most profitable ad solution. Adsense only works (makes you more than a buck or two) with large libraries of content - popular content with high search numbers and lots of advertisers in that space. ie. Articles about dieting and debt will bring you more per click than technology.
The best way to make money on a small site is to go out and contact active advertisers (people advertising on sites like your own) and having a low (no-brainer) price for ads. $10-15/mo. for a small 125x125 px ad will bring you more than an adsense banner (for the majority of sites).
Affiliate marketing is also a great alternative. Find other products like your own and include those banners mixed in with other ads.
How does 10$/mo for a small banner work? Meaning, how often would it have to be displayed? Otherwise I think that approach doesn't lead far, namely, you can only make 10$ per month and advertising space.
$10 was an example price, but for most small sites you can't expect to make hundreds (or thousands) a month. I consider 'small' less than 1k uniques per day.
How you display the ads largely depends on your site and traffic. If you're only receiving a couple hundred pageviews each day, you'd want to have that ad showing as much as possible (to get a better price from the advertiser).
For a lot of these ads, you'd have multiple placements. ie. 4 ad spots for 125x125 pixel banners. On a site with a couple hundred pageviews it's realistic to assume you could get $15 for each of those ads (depending on the topic).
You're delusional if you think Adsense or other advertising networks will make you more than $15/mo. You're lucky if you get a $1 CPM (cost per 1k views) with most networks, assuming 6,000 views/month on a small site (~200/day * 30) - you can do the math there.
Again, this varies depending on the content. I worked for a small content network and we could charge $500/mo. for a banner spot that received about 20,000 views per month. But we only made $100-200 max with Adsense (across the whole site - roughly 45,000 impressions a month).
Just to chip in here, I know you were saying "I consider 'small' less than 1k uniques per day." to give an example, but this example is also most likely assuming you don't have targeted niche specific traffic. My 1K uniques/day pop culture tech/media site makes as much money as my 100 people/day very focused site on Apple products. Both are still serving Adsense only though that is only because I haven't gotten around to changing the latter site's advertising.
Also, $1 CPM with Adsense? If you are mainly a content based site (i.e. blogs) and place say two Adsense ads in prominent locations and maybe one Adsense link ad, you should easily top $5 CPM. I usually stay between $5 to $10 CPM for wordpress based sites.
A good few people I know have been very happy with affiliate ads, especially with Amazon. Those are mainly people with high-quality content - expertise in a niche field or especially fine writers - who are comfortable endorsing specific products.
For example, one person has a rather excellent 'how to' book aimed at indie filmmakers, and owns/demonstrates techniques with video-capable DSLR cameras; readers ready to take the plunge are invited to purchase via his affiliate link, and his original content is so good that it's a pretty fair trade: it might cost the buyer $50 more on a $1500 camera but he has easily saved readers many times that amount. It's not his main source of income but it doesn't hurt.
That's right, as far as I know; it's sales commission as opposed to the warehouse model. I meant $50 more than you might pay by shopping among competitors: Amazon might not have the best price but you've derived value from the person's detailed insight into why it's a good purchase, plus you'll get Amazon recommendations for other purchases from people whose reasons for purchasing are similar to your own, which is also useful.
My point was that while the revenue is intermittent rather than a steady trickle, the intermittent rewards are individually decent - which dovetails nicely with occasional but high-quality content updates rather than drip content + SEO.
For contextual ads, you don't have much more of a choice. The recent decline of Yahoo's YPN was sad in that it was the only real alternative. Chitika and Amazon are fine for product-oriented content but lousy on other kinds of content.
Where did Google's honesty go? Google is wildly profitable. This post tries to convince you that they charge you for their costs only. That's just plain misleading.