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Old 02-26-2008   #1
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Adsense Income Dropping?

I posted a comment on the blog about the drops in income and poossib,e reasons. Please give it a read and give your opinions.

Last edited by AussieWebmaster : 02-26-2008 at 04:32 PM.
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Old 02-26-2008   #2
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Re: Adsense Income Dropping?

Aussie, I think the economy is in a downturn. Maybe advertisers are spending less. We hit a low point late in the summer. I think many people were on vacation and not sitting in front of their computer at work.

I hope Google doesn't change anything. Our biggest month ever was this last month. We have been doing real well.

I don't think YouTube has sucked that much money. In fact, I quit putting those ads on the site. They didn't pay that well.

Those are my comments.
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Old 02-26-2008   #3
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Re: Adsense Income Dropping?

comScore Reports Flat Y/Y Growth In Google Paid Clicks For January — Google’s U.S. Web Search Paid Clicks were
532MM in January, down 0.3% Y/Y and vs. 13% Y/Y growth in December and 25% Y/Y growth in Q4.

Citigroup analysts believe the comScore report was the primary reason for GOOG’s 4% share price decline on Monday.

Stats are for domestic US only, google.com only
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Old 02-26-2008   #4
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Re: Adsense Income Dropping?

Kevin, that is some good info. I think it shows that Google, like everyone else, has been hit by the bad economy. We used to get a lot of Countrywide ads on our site, but they have gotten fewer.

People talk about the bird flu and how many people would die (like in 1917). Personally, I would hate to see the economy if something like that hit.
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Old 02-28-2008   #5
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Re: Adsense Income Dropping?

I think that Google chose a really bad time to implement changes such as not making the entire ad clickable. While the cause is noble, it should not have been implemented at the end of Q4.
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Old 02-28-2008   #6
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Re: Adsense Income Dropping?

Quote:
Originally Posted by cscgal View Post
I think that Google chose a really bad time to implement changes such as not making the entire ad clickable. While the cause is noble, it should not have been implemented at the end of Q4.
I agree they have had timing problems
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Old 02-28-2008   #7
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Re: Adsense Income Dropping?

There's more press coverage on this today.
"Google Down But Not Out Due To Poor Ad Click Growth"
"Google stock falls after paid click decline"

Google stock is down about 30% since its peak last year. P/E is still around 35, which is too high. Google has to be priced as a mature company, not a growth company, since they're #1 in search ads and none of their other products generate much revenue. So their P/E should be around 15-20. (Microsoft and IBM both have P/E ratios around 16. Yahoo has a P/E of 60 and declining revenue, which indicates their stock is about 3x-4x overpriced.)

Remember when the bottom fell out of banner ads? Maybe that's happening to pay-per-click?
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Old 02-28-2008   #8
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Re: Adsense Income Dropping?

Quote:
Originally Posted by sitetruth View Post
There's more press coverage on this today.
"Google Down But Not Out Due To Poor Ad Click Growth"
"Google stock falls after paid click decline"

Google stock is down about 30% since its peak last year. P/E is still around 35, which is too high. Google has to be priced as a mature company, not a growth company, since they're #1 in search ads and none of their other products generate much revenue. So their P/E should be around 15-20. (Microsoft and IBM both have P/E ratios around 16. Yahoo has a P/E of 60 and declining revenue, which indicates their stock is about 3x-4x overpriced.)

Remember when the bottom fell out of banner ads? Maybe that's happening to pay-per-click?
I don't think PPC is declining... I think there is generally a drop in January following a big push in December.... this is not going away....
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Old 02-28-2008   #9
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Re: Adsense Income Dropping?

That's an excellent analogy, sitetruth. It's easy to forget the first online bubble. I remember going to an industry ad conference where every site said their inventory was sold out - right before the crash.

What's different with paid search: searchers want to find, research, and buy products online. The downturn in the economy and Google's ad changes are the primary reasons I think paid click volume may be down.
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Old 02-28-2008   #10
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Re: Adsense Income Dropping?

Yeah, I really think this has a lot to do with the current state of the economy. I do work for 3 separate industry sites, and 2 of them are what I would consider to be luxury item sites, and they are hit hard right now. It's still close to the slow time after Christmas, but the 4 years I've been tracking them, they slowly had been in a slow 3 week climb, whereas I see a larger decline and very little upturn in their volume this year.
As for the other site, it's not as much of a luxury ecommerce, and that site is doing lower volume, but not anywhere near a low as the 2...

... and it's funny but, I remember when Yahoo stock was going in the high 200's ...
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Old 02-28-2008   #11
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Re: Adsense Income Dropping?

Quote:
Originally Posted by sitetruth View Post
Google has to be priced as a mature company, not a growth company, since they're #1 in search ads and none of their other products generate much revenue.
I think Google is successful because they don't try to make money on everything. Eric Schmidt says they are a publisher's solution. They don't try to force publishers to pay for Google Maps or Calendars etc. If Yahoo developed something like that, I bet they would. LOL

Of course the most important solution for the publisher is the revenue solution. Google ranks supreme on that. They also provide better search results.

I don't like seeing their stock over priced either, but I think they are on track to dominate the Internet (revenue and traffic wise) for the next five years at least. Maybe that has something to do with their P/E.
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Old 02-28-2008   #12
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Re: Adsense Income Dropping?

This is really turning into a great thread.

@ jonydzine - thanks for sharing how the luxury goods sites are faring. I've always tracked Blue Nile as a bellwhether for online retail and pure plays. Not all their inventory is luxury - but their CEO and top mgmt tends to be open about their search engine marketing strategies.

@ dan01 you're right on the money about Google ranking supreme on revenue solutions. While not everyone's excited about Google's growing share of search, the online ecosystem they created resurrected online advertising.

None of the Web 2.0 innovations and social networks would have been possible without Google.

Last edited by Kevin Heisler : 02-28-2008 at 11:40 PM. Reason: add dan01
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Old 02-29-2008   #13
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Re: Adsense Income Dropping?

When I come to this forum, I am interested in all of the search engines. I asked about ASK SEO in the Ask section, and no one replied for a week or so. The Yahoo section is not very robust either. But this Google section is really popular. I think a lot of that has to do with the revenue generated for the publishers and advertisers.

But how long will it last? We all remember AOL buying Time Warner. At the time, AOL was king. AOL had lots of subscribers, but they soon left after the merger. How about eBay? They are now struggling.

Microsoft has been looking at Yahoo as a take over target. If you ask me, that reminds me of the AOL / Time Warner merger. Like AOL's subscribers, Yahoo's eyeballs could disappear too. The purchase of Yahoo could be a mistake, but MS is grasping at straws right now.

Nothing lasts forever. My wife and I have heard about affiliate programs since the 90s. We sold on eBay until mid 2005. Late at night, after completing my work on our eBay business (packaging etc), I would produce content for another of my ebsites(beginning in July of 2005). Already I saw problems with the eBay business. By December we decided to quit selling and devote all of our energy to content / affiliate (Adsense). Good timing to say the least.

I am nearing 50 years of age. I think I have had pretty good timing on things so far. If I had to predict, I think Google will continue to dominate the Internet for the next five years at least. They will continue to generate more revenue than anyone else.
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Old 02-29-2008   #14
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Re: Adsense Income Dropping?

Dan I would tend to agree about Google's time frame
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Old 03-01-2008   #15
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Re: Adsense Income Dropping?

I agree that MS is grasping at straws to find a way to beat Google in the online world.
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Old 03-04-2008   #16
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Re: Adsense Income Dropping?

I saw this article in my email today:

Quote:
A leading theory is that Google decreased the clickable area of AdSense ads in order to cut down on accidental clicks. They did that about mid-November, just before some publishers noticed a drop in earnings, which was just weeks before comScore released a report saying AdSense revenues had flattened.

If decreasing the clickable area of an Adsense ad is the direct cause, why would a smart company like Google do such a thing? The answer posed for that question is that Google plans to make it up by creating a higher value on the clicks that do not happen accidentally. This could be a win win win for Google, Adwords buyers and Adsense partners, as referrals cost more, but are more likely to convert. ...

So even though there were fewer clicks in 2007, Google made more money. It looks like they're trying to repeat that in 2008.

Bill Tancer at Hitwise similarly found that if declines in revenues were economic-based, or an indicator of recession, then Google traffic to retail sites might be among the first hit. However, Google traffic to shopping and classified sites was actually up year over year.

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Old 03-04-2008   #17
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Re: Adsense Income Dropping?

Quote:
A leading theory is that Google decreased the clickable area of AdSense ads in order to cut down on accidental clicks. They did that about mid-November
As someone who has analysis programs that look at AdSense code, I can say that there are still AdSense ads in the wild where the entire ad rectangle is clickable. But the mechanism for doing that isn't strictly valid and may cause browser problems. It involves wrapping an A tag around a DIV tag, which is incorrect but supported by most browsers.

There's an enormous variety in AdSense code, and Google feeds random versions to the same ad sites. There are DIV-based versions, TABLE-based versions, wraparound anchor versions, and Javascript "onclick" versions. There are versions where the ad link isn't set until there's a mouse-over event on the ad. All of these look the same visually, but the client-side implementations differ considerably.
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Old 03-04-2008   #18
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Re: Adsense Income Dropping?

Quote:
I do work for 3 separate industry sites, and 2 of them are what I would consider to be luxury item sites, and they are hit hard right now.
Now you see, this is where I have a somewhat different experience with the economy angle. Similar sectors, but actually quite different.

A small group of niche sites I run are in what I call the overall "discretionary income high-end hobbyist/interest" sector. These folks might be cutting back a bit in their truly discretionary spending -- travel, baubles etc. -- but from what I've seen are still pursuing the things that are important to them.

That said, I did suffer hits across the board when the clickable area changed, and by my own surfing behaviour can understand why G did it -- I have a very fidgety clicking finger. On some sites I'm constantly highlighting text to make it easier to read, then trying to find empty space to click off on. I have a bunch of files where I store copied blurbs for future ref, and yeahI ave to click off someplace again. And then for me there's the Wow! factor; seems like every time I read something and go Wow! my fidgety finger double clicks and now yep I have to find safe blank space to click off.

You can actually disregard most of the above; I was writing it as space filler as I was trying to remember this Why Google's surprising click data are less surprising post from comScore. Takeaway:

Quote:
the evidence suggests that the softness in Google’s paid click metrics is primarily a result of Google’s own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur.
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Old 03-14-2008   #19
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Re: Adsense Income Dropping?

*knocks wood*

So far, my numbers seem to be trending as normal for the main site I run Adsense on. (Domain is 7 years old, site has been live for 3+ years now, running Adsense since day one.)

It's an automotive/hobby site which over the past 15+ months has managed just over $1,000/month in revenue. The current month is trending to reach that level again, but I never count that chicken until the month ends.

When G made the change to the clickable areas in the ads, I watched to see what, if any, differences I might see. I didn't want to lose revenues, but remained open minded.

So far, it's been status quo for me.

Granted, this is one very targeted, niche website, so I'm not sure it counts as a true representative of what's really going on in the majority of cases.

As someone who once lived the lifestyle that my site targets, I can honestly say that folks in this niche spend money on their hobby whether they can really afford to or not. There's a LOT of one-upmanship and every few months sees the latest and greatest item targeting this crowd roll out - and everyone upgrades, etc.

What I have noticed are fewer peaks on high-rev days. I used to see $50 - $60 days once a month, but over the past few months, that trend has abated, though just slightly higher overall averages seem to be keeping the revenues afloat.
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Old 03-15-2008   #20
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Re: Adsense Income Dropping?

Quote:
Originally Posted by Dan01 View Post
Aussie, I think the economy is in a downturn. Maybe advertisers are spending less. We hit a low point late in the summer. I think many people were on vacation and not sitting in front of their computer at work.

I hope Google doesn't change anything. Our biggest month ever was this last month. We have been doing real well.

I don't think YouTube has sucked that much money. In fact, I quit putting those ads on the site. They didn't pay that well.

Those are my comments.
Do you think this means we should start focusing on international markets? I hear the China has the most online users now but I wonder how much online advertising is over there.
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