Is Google in Trouble & Facing Bankruptcy?

[NEW YORK - Wednesday] - by Devon Melk. Rumors are now running amok that the 2nd most powerful website on the entire Worldwide-Web may file BANKRUPTCY, with the deadline set for this December; being the date of both discharge and dissolution in a Federal Court of Law.

This would come as a SHOCK to investors and "Googlers" alike who both profit and benefit from the use of the World's largest and most powerful search engine which receives far in excess of 100 MILLION unique daily visitors and well over 300 million individual searches daily - making it perhaps the single most valuable public data resource as an "information bank" online the world over.

But is the rumor true or false?

The origin of the rumor occurred when some savvy Internet marketers began making statements that they had heard "insiders' talk" that the company (now publicly traded since April 30, 2004, just over 3 years ago) may face financial disaster with the release of a "new system" that would allow advertisers to get their otherwise pay-per-click (PPC) advertising completely free.

This, of course, would naturally lead directly (like a domino- effect) to the collapse of Google's sibling program AdSense; as its only revenue comes from the direct sales of AdWords "clicks."

The "new system" in question and responsible for the controversy over getting AdWords pay-per-clicks free is that developed by Dr Jon Cohen of New York City, New York (now retired) who discovered a simple, yet effective means, for getting Google PPC ads without having to suffer the costs involved.

The retired New York doctor and native has a publicly disclosed net worth now in excess of $70 million [US], having generated well over $377 million in product sales from sixteen (16) separate online businesses within just nine

(9) years since first venturing online in 1998 (about the same time as Google was founded).

It is estimated by company insiders and leading financial analysts that the

"good doctor" (as he's called by "all who know him") has purportedly saved well over $93 million (some estimates suggest closer to $136 million) in otherwise paid advertising at Google and the other major players in the PPC targeted-search arena online - including Yahoo, MSN, AskJeeves, AllTheWeb.com, HotBot, AltaVista, Lycos and Netscape, just to name a few.

The "secret" became available to the general masses last April, and its very release caused such a major sweeping stir among the community of Internet-marketers, affiliate-marketers, webmasters, ecommerce company owners and surfers alike that the site quickly rose to break the top most visited 1,000 websites on the entire planet briefly; and as can be seen here:

http://tinyurl.com/39lnjn (Alexa data on this!)

When asked if the "secret" would somehow ruin Google, Dr Cohen revealed almost cryptically that it actually would bring about just the opposite effect, and "stimulate" even more business volume for the virtual giant.

Many people were dismayed to find that Google itself is deliberately allowing the purchase of 100,000's of PPC ads offering the secret system to the general public -- which indicates to most observers that either they [Google] haven't caught it, or they simply feel that it somehow is not a threat to their continued operation.

For anyone's inspection factual and hard evidence supporting this can be seen by simply looking to the right-hand column when doing a search for

"get google ads free" (specifically in quotation marks) at Google.com under the "Sponsored Links" section.

Or take this direct and instant SHORTCUT:

http://tinyurl.com/2ctu6j

You can also see nearly 100,000 specific results in the "organic" fields index located in the center and which occupies the bulk of the results pages.

One would think that if Google felt threatened by such a release as this earth-shaking "secret" is, they would hardly allow for either paid-ads or organic content to make the top searches regarding it.

However, evidence supports to the contrary - and this being the case now for a full six (6) months.

Mysteriously, within just two (2) hours of its initial release last April, Google itself actually did in fact 'pause' the parent firm's attempts at advertising the new system using PPCs on their search engine - only, however, to release the hold after a Review Team consisting of some of Google's top executives completed performing an in-depth investigation and made the determination to ALLOW the ads to run.

The secret system was recently revised however to include "major new content" and "more exhaustive instructions," and is now available at its Home Site:

http://www.DigitalProductSearch.com/freegoogle

The most important addition is that of a so-called "string of code"

(tech-talk for some HTML) that can be added to any webpage(s) that instantly causes the elimination of the page owner's AdWords costs right away.

Even a "live" woman spokes-representative ("Rachel") has been added to the site, and who appears to literally walk out onto the webpage and talk to visitors and explain a bit more how the mysterious new breakthrough system works.

Since the addition of this new "live" spokes-woman has now appeared at the site, company Vice President of Sales & Marketing, Mr Todd Coutrin states that "sales for the system have skyrocketed above 2,430 percent suddenly and

with no limit in sight."

Coutrin continues: "With the newest revision now in place, plus all the additions added, affiliates for the new system can expect to earn even more than ever before!" (Note: Affiliates make up the bulk of the firm's sales generation.)

The refund rate for the new revised version of the secret (named V5.1) has dropped to less than half of what it was before the newer version's release; meaning it's now even more readily-received and put to use than ever before

(perhaps in large part to the newer simplicity of application) - now making it the safest and one of the best resellers for the networks of affiliate marketers who earn their revenues from the reselling of other electronic publishers' stock and digital product lines.

When asked, Google company representatives stated matter-of-factly that the rumors of bankruptcy for the ecommerce giant are simply not true, and that the rumor millings are in fact simply the result of "panics" brought on by the usual hysteria associated with anything large, new or revolutionary - or in this case, all three.

Attempts to contact both Sergey Brin and Larry Page, the former Stanford University students who founded Google in 1998, to request comment were unsuccessful.

Again, Google itself seems to be the biggest supporter of the "new system" as it's allowing more and more advertisers to promote the new system on its search engine before over 100 million daily searches and surfers.

10 Tips To Improve Google Adsense Earnings

As predicted in last months MyBlogEarnings, my Adsense income has taken a bit of a hit this month as advertisers start to reduce their spend. So far this month my CTR has remained fairly constant, but my CPM has dipped by a few dollars.

I haven’t really worked on my adsense optimisation for a while, as after growing my adsense income from a few hundred dollars to over $4k in 8 months, I’d assumed that I pretty much had it cracked.

However, after this months CPM reduction I’ve added adsense optimisation to the list of things I’m going to focus on this month. Here are 10 Tips To Improve Google Adsense Earnings that have worked for me in the past, that I’m going to focus on this month to get my CPM back up for the rest of the month.

Make The Most Of Google Love

One of the common reasons bloggers don’t make a lot of money from Google Adsense is because they don’t write about topics that people are searching for answers on i.e. using Google. Just writing interesting articles isn’t going to get you a lot of clicks on ads as your readers won’t be searching for answers or certain products.

If you take a look at my top posts in the sidebar you will see that most of the posts are giving tips, or useful links for services, or are product reviews i.e. posts that get lots of Google love which sends lots of click happy people through to my site. If you post more articles of this ilk your adsense earnings will increase. These articles are also timeless and will continue to get Google traffic long after my regular readers have moved onto newer material.

To maximise your Google traffic don’t forget the basics like making sure your post titles are clear and that your first paragraph clearly explains what the post is about, so that even if you are not the top result you have increased your chances of being clicked on. Take a look at my top posts - every one of the post titles makes it clear what the post is about, which is why they do well on Google.

Smart Pricing - Less Is Better

I’m stunned by how many blogs haven’t factored in Google Adsense Smart pricing into their site design. If you haven’t come across Adsense Smart Pricing before, then in one sentence this is where Google looks at your site’s overall CTR and if it’s low then it will display lower value ads and if it’s high it will display higher value ads.

So, for many sites a quick way to improve earnings is to actually display fewer ads i.e. to remove poorly performing ad units like sidebar ads, or ads that are below the fold etc. This will increase your site’s average CTR, which will make Google display higher value ads in your better performing spaces which will raise your overall earnings.

Smart Pricing works across your Adsense account, not just on a site by site basis. So, if you are displaying a significant number of Adsense ads on other sites that have a poor CTR then you should remove them as your main sites will benefit.

If You’re Going To Place Ads Put In Best Spots - Don’t Kop Out

In my view, if you are going to run ads on your site then it doesn’t make sense to do it half-heartedly i.e not put your ads in the best slots. If you do you’ll never get to see the full benefits - if you’re going to do something in my view, then do it right!

This heatmap shows where the best positions for Google Adsense Ads are.

Blend Your Adsense Units

Following on from the previous tip, again if you are going to add Adsense ads to your site then again I think you should make sure that they are fully optimised. The best way of doing this is to blend the ads into your site by making sure that the text and link colours match.

To maximise CTR you should also wrap text around your ads. Many sites have tried placing ads above text or even before articles, but in my opinion this is a bad move, as all it does is encourage readers to ‘jump’ past your ads straight to the content.

Get A Good Stats Package

One of the difficulties with Google Adsense as it’s virtually impossible to see for certain which posts have a high CTR. But, if you have a good stats package then at least you can see which of your posts are popular so that you can try and write more of the same to further grow your traffic.

How to Test Google AdSense Ads (and Improve Your Revenue)

Improve your revenue from Google AdSense ads by using this simple PHP code to test your ads and identify the ones that pay better. You could run one ad format for a week, then run the second format and compare results. Better yet, test formats simultaneously and start getting side-by-side results to compare the same day.

Lots of articles suggest trying out different types and formats for your ads. Then they say you will figure out the format, size and placement that gives you a better click-thru rate and increased revenue. That's all very nice. But, because of all the ways you can vary your ads (different sizes, shapes, locations on your page, link colors, text, border colors, etc.), this can be a long process. That is why I wrote this.

This site recommends Google AdSense for targeted ads This article is written specifically for Google AdSense ads. You might be able to modify it for other types of ads. Because ad providers and their code is always changing, this article is about Google AdSense only, but the general concepts might apply to other advertisers.

The Ad Testing Code

Google lets you vary many settings including colors of links, borders, text, backgrounds, plus ad sizes and shapes. Modify the default Google AdSense ad format and you are likely to increase your earnings.

In our example, we test an ad without a border against an ad with a border. This page has a white background, so “no border” means the color of the border is set to white. I wrote this code to test ads and found that ads without a border had better click-thru rates than ads with a border.

Take a quick look at the two ads formats we are evaluating in our coding example before we get too deep into the explanation. Only the border color is different. Everything else remains the same so we do not confuse and confound the test. (The channel ID assigned by AdSense changes, but that is not part of the appearance of the ad.) You could easily vary some other setting for your own purposes.

Building the Ad Testing Code

Log into your AdSense account and create 2 custom channels for your site. One channel is for each format you are going to test. (Adsense help explains how to set up custom channels.)

In the PHP code on your site, generate a random number of 0 or 1. We use this number to serve up one of two AdSense ads.

srand(time());
$random = (rand()%2);
?>

In your AdSense account, generate the AdSense code for the first channel. Our first channel has no (a white) border. Paste it in to your PHP code. Then, back in AdSense, generate the code for your second channel, selecting the appropriate custom channel and setting the border color. You will build something like the following:

To make it easy to see below, the border color we are varying is in bold text.

if($random == 1)
//test with white border (no border)
{
?>


}
else
//test blue border around ads
{
?>


}
?>

Let the ads run. In your reports you will see roughly equal numbers of each ad being served up. When you determine which format is better, try changing another setting to see what will give you even better click-thrus and revenue.

Download the code source (adtest.txt)

View page with both ads showing so you can see the differences.

Notes About Testing AdSense Ad Formats

Just like we tested two different border colors, we could have varied another setting. For example, if you want to see whether black link titles perform better than blue, set one color:

google_color_link = "003366";

and a second color:

google_color_link = "000000";

You can run a more complex test, with, say, three options for a single variable. Modify the random number generating portion of the code to generate a 0, 1 or 2. You should test only one variable at a time (holding all other variables constant). If you test too many variables, you do not know what is performing better.

When you get more comfortable with custom channels and with testing various ad formats, you can get more sophisticated with your tests and how you use my little PHP script.

AdSense’s Terms and Conditions require “not modifying the JavaScript or other programming provided to You by Google in any way.” The above ad test does not modify Google’s code. We are simply randomly serving up one of two scripts. When you look at the HTML source for each format that PHP generates, the scripts are exactly what AdSense generates. We have not modified Google JavaScript or programming in any way.

Mobile Advertising Click Through Rates of 5%, 12%, 25% and 29%?

I am not the only one who finds the recent high profile comments about Click through Rates hard to swallow.
It started with Vodafone’s Ray de Silva quoting 25% at Mobile Advertising and Marketing Forum in London in January.
Then, at the MoMo Peer Awards Blyk’s CEO quoted 29%. Both Vodafone and Blyk have not shown any proof about this and they do sound like figures pulled out of that hat.
I spoke candidly to AdMob about the “reality” of these figures and there was agreement that these figures can only come out of very controlled circumstances or campaigns managed within a week or month. These are not the industry standard for on-going mobile advertising services.

As a market leader AdMob says that its click through rate on average is about 10 to 15% - which is impressive and on top of that realistic. But quoting figures as high as 29% is doing little that building up home for mobile advertisers in the market.
I would actually go so far as to say it’s like a “please advertise with me” number that sounds appealing but without justification or signing up – one will never know.
We know mobile advertising is a growing market. But quoting figures without substance is a bad move.
If you look at the chart above it’s from a campaign that I ran with AdMob. I made the same charts in more detail for campaigns run with Decktrade, Google and JumpTap and others.
By using examples of bkimedia.zinadoo.mobi and gomonews.mobi in campaigns run over 2 weeks I managed to track to see what campaigns were more effective by terms of cost and click through over each vendor. If you would like to know more, then contact me – but in the diagram above over two days the sheer volume of impressions on AdMob drove down the click-through vs cost ratio. The above is only a very small example and the click through rate for the campaign was about 2% - but then the cost of the campaign was also only pennies.
Finding a rational between cost vs click through vs impressions is the first step that companies need to take in the mobile advertising and marketing space before quoting unrealistic click through rates.

Google AdSense Expands Contextual Ad Placement Program To Small Sites

Google has expanded its contextual ads program to allow many more content sites to carry its paid listings. The new Google AdSense program allows site owners to sign-up for the program in a self-serve manner, similar to becoming an Amazon affiliate.

Google's contextual ads program, Google Content-Targeted Advertising, was officially launched in March. In the program, Google negotiated deals with large web sites to integrate its paid listings into their web pages. Smaller web sites were not able to take part.

"When we rolled out content ads a couple months ago, we had set a threshold of 20 million page views per month for web sites we'd consider for the current program," said Susan Wojcicki, director of product management for Google's ad syndication programs. "We found there are huge number of very high quality web sites that did not meet that threshold."

The new AdSense program corrects this. It allows any site to apply, even those with only a few thousand page views per month.

"We built an online automated way for web sites to come to Google, sign-up and apply to be accepted into our network," Wojcicki said. "This program will be a way for web sites to earn money by putting ads on their pages."

Those accepted into the program simply insert some short JavaScript code into their web pages. In response, Google will deliver a banner or skyscraper-sized ad module filled containing paid listings.

While the program opens the doors to many more sites than before, not all will be accepted. Google will review the sites to ensure that they meet certain program policies. Among those not eligible are sites that include content about drugs, pornography or gambling.
Google Ads & Blogs

The program policies do not allow "personal pages" to take part. What's a personal page? This isn't defined. However, a traditional personal home page listing things like interests or family news certainly wouldn't be eligible. Similarly, some blogs may find themselves rejected, under this rule.

"In general, we're looking for at this stage web sites with more standardized content," Wojcicki said. "Blogs are an example of a gray area, and we will review them on a case-by-case basis to see if they fit our network."

This will be a difficult area for Google, because blogging tools aren't just used by those wishing to express personal views. Some use them simply because they are an easier way to publish a web site focused on a particular topic.

Gary Price's great search and research site, ResourceShelf, is an example of this. Gary moved to using the Blogger.com tool, now owned by Google, not out of great love to be blogging but because it was an efficient way to publish his content, he has told me in the past.

ResourceShelf is so tightly focused around a particular topic that it should be a natural for Google's program. But how about blogger Jeremy Zawodny's site?

Zawodny has a section of his blog archives that are specifically about Linux, which might be perfect for ads about Linux (should he wish to carry them). However, the home page of his blog is far more diverse, such as including a post (at the moment) about determining the optimal temperature for Heineken beer. Not exactly the standardized content Google wants.

Why even care about standardized content? Google's contextual technology automatically delivers paid listings that are deemed relevant to a page, based on that page's content. So, a blog that covers a wide variety of topics may be difficult to target.

For example, the jimpunk blog is about, well, a lot of pictures that have no apparent theme to me. But since this is a site making use of the free Blogger service, it already carries Google's contextual ads. This was done as part of the initial Google rollout of its contextual program.

What are the ads about? Buying "Iraqi Most Wanted Cards." Why? There's a part of the page that flows an article across the page that appears to be about the Iraqi conflict. As best I can tell, this may be what's causing Google to make the bad guess that ads for "Most Wanted" cards might be relevant to this page.
Helping The Web, But...

Google makes the pitch that its ad program should be a boon to everyone who uses the web, since the revenue will help publishers keep making good content for users.

"From the user standpoint, this will be good. No only will it fund quality publishers to produce quality content, it will also produce a better user experience, because they'll be able to see ads that are related to the content," Wojcicki said.

An excellent recent article from Business 2.0 explores in more depth the idea of contextual ads as helping support good web content. It's an idea I buy into. When I got involved with building web sites back in 1995, I always hoped there would be a way to connect those with good content with advertisers to fund their work. Google's program certainly will help with this.

Nevertheless, one major downside remains to the expansion of Google's contextual ad program. It leaves the company even more vulnerable to accusations that it may favor sites carrying its ads in its search results, as I explained when the program first announced.

At that time, Google denied that this would happen. The company has even added a FAQ answer denying it. And Google cofounder Larry Page reemphasized this last month, when I spoke with him about the issue.

"That's not something we would ever consider doing. We wouldn't bias our search results based on the monetary relationships we have with people," he said. "It would be sort of dumb for us from an economic perspective. Let's make a little bit more money and in return get everyone in the world upset."

Google AdSense Program Review

Google AdSense, Google's advertising program that lets webmasters display ads from Google's extensive list of advertisers, has taken the Internet by storm. Through this successful program, unobtrusive text-based ads are served in member sites, who then earn a commission every time someone clicks on the advertisers' links.

At this point in time, the jury is still out on whether this program will continue to enjoy its initial success. That is why, through this article, we want to give you some highlights and insights on how the Google Adsense program has worked for us, one month after we signed up for it, so that we can use it as a checkpoint for future analysis.

Generate revenue from your website. Google AdSense.

Why is Google AdSense so Popular?

Google AdSense uses Google's proprietary PageRank™ search technology to deliver ads that are highly relevant to the content of a page. Google's engine will scan through the content of the page to determine its topic, and will then serve ads that are relevant to the page's content.

Running Google AdSense is simple and straightforward: Google gives you a snippet of HTML code that you can paste in the desired location on your page, and the ads start appearing immediately after you upload the changes to your server.

However, Google AdSense's main claim to fame is that, by displaying text-based ads, it is able to deliver much higher click-through rates than traditional graphic banner ads. As usability studies have widely shown, users are already conditioned to ignore banner ads (or anything else that looks like them). As a result, banner ad click-through rates have dropped below a dismal 0.5% (in other words, it takes 200 page views, on average, to get someone to click on a banner ad).

By using text based ads instead of graphic banners, Google has been able to overcome banner ad blindness, delivering click-through rates that are much higher than the industry's average (some put the figure around the 1.5% mark).

This site recommends Google AdSense for targeted ads

How much can you expect to earn by running Google Ads on your site?

The pay-off per click varies widely depending on what each advertiser decides to offer, based on the profitability of their products and their expected conversion rate (percentage of clicks that deliver a sale). Google is not saying what the average pay-off is nor how does it share the revenue per click with their AdSense partners, but how much you will earn per click will really depends on the topic and the product being advertised. Products with profit margins of $3.00 for the advertiser will probably give you a smaller pay-off per click than a product with a $300 profit margin. Similarly, ads with high conversion rates will normally give you higher payouts than less effective ads, since they can afford to pay more dollars per click, with a portion of that money going to you.

So, just for the sake of giving an example, lets say that your site receives 1,000 page views per day. At a 1.0% click-through rate and $0.50 pay-off per click to you, in a 30-day month you can expect to make:

1,000 x 30 x 1.0% x $0.50 = $150

The more traffic your site has, the more clicks (and the larger the pay-off) you will get.

Will Google's AdSense continue to be successful?

This is the big question, and nobody has a definite answer yet.

On the downside:

• The program will most likely face strong competition from other search engines in the near future.
• The proliferation of text based ads could make users "text-ad blind" the same way as they have already become "banner-ad blind", causing click-through rates to drop.
• There is always the potential for abuse, since some unscrupulous program members may violate the program's rules and click on their own ads, inflating the advertisers' click-through rate and forcing them to decrease their pay-off per click.

On the positive side, I believe that Google AdSense's success is not only due to the fact that they deliver text based ads instead of banners, but because those ads are served by Google. The credibility and brand equity that Google enjoys is huge, and I expect them to continue to beat other search engines and advertising networks that may eventually jump on the bandwagon.

However, it is reasonable to expect at least a slight decrease in click-through rates and pay-off as a result of the increased competition.

For tips and tricks on how to maximize the return of your AdSense program, you can read The Definitive Guide to Google AdSense, by William Charlwood, the complete step by step road map for making and maximising your income from Google's AdSense program.

Introducing Google AdSense

A few months ago, Google began distribution of the AdWords advertisements that are normally found at the right side of their search results (for more on AdWords, see http://adwords.google.com). This distribution was based on CPM rates, and was limited to sites that served more than 20 million impressions a month, along with ad networks like Burst!Media, TribalFusion, and Fastclick.

Last week, Google launched a new service called AdSense, which expanded on this distribution program and made it more accessible to smaller publishers.

This new program differs from what is now “AdSense Premium”, in that it is CPC based and, for the time being, offers less flexibility in terms of ad sizes -- only banners and skyscrapers are currently available. Publishers can apply using their existing AdWords accounts, or may request a new account. Applicants are usually notified within a day as to whether they’ve been accepted for the program.

There are no strict criteria for acceptance into the AdSense program, which, unlike other ad networks, does not place minimum traffic requirements on applicants. The only real criteria are the standard “acceptable content” requirements that exist just about everywhere. Of course, AdSense wants to attract quality content sites, and will only allow AdSense members to serve one ad per page – the service can’t be used for both banners and skyscrapers.

Once you’ve been accepted, you’ll be able to run AdSense advertisements on any site you own using the same ad code, provided you obey the guidelines. Reporting doesn’t occur in real time, but is updated regularly throughout the day. Currently, you cannot view reports based on a domain or site basis if you run the ads on more than one site. Google has published a very lengthy and detailed FAQ on the AdSense site, and if you’re thinking about signing up, you should definitely read it.
How Does The Targeting Work?

Google uses its search engine ranking technology to decide which ads to show on your site, and on specific pages of your site. For instance, on a Webmaster site, an article about Flash might be accompanied by an ad for Macromedia products, while an article about Web hosting might show an ad from a hosting company. This type of targeting is very effective, and results in good click-through rates in most circumstances.

However, this type of targeting isn’t perfect. One key issue with the system is that Google seems to be doing very little in the way of ad rotation. If a certain ad is highly targeted to your content, it might be shown every time. This means that if you attract a large number of return visitors, or generate a high number of page views per visitor, you may experience declining click-through rates on the ads over time.

Another issue is that Google targets the ads based on your site’s content, not your visitor’s desires. The difference between the two might not be readily apparent, but it can have a significant impact on clickthrough rates.

For instance, I run a literature site that provides information on classic books and authors. Google will analyze my content and serve advertisements they see as being appropriate. For instance, on my Shakespeare page users may see ads for Shakespeare audio books or limited edition prints. The problem with this is that while those ads fit my content, they do not fit my visitors. Most of my visitors are students doing research and they simply aren’t interested in buying those types of products. In contrast, advertisements for essay or other homework assistance services do very well on that site. But unless an essay site owner specifically selects a keyword like “Shakespeare” in their AdWords account, visitors to my site will not see any essay advertisements.

In pondering this situation I was reminded of a company called TeknoSurf Adwave, who eventually turned into Advertising.com. Their original claim to fame was that they were a CPC-only ad network. Yet they took the time to identify the banners that performed well on each site, and optimize the ads they served. This proved very successful – members enjoyed clickthrough rates high enough to generate an effective CPM. Indeed, the company’s figures were usually comparable to, or better than, the CPM rates offered by many other ad networks.

If Google could implement a similar system, it could greatly increase the effectiveness of their AdSense program. However, a hurdle to implementing this kind of system is that, currently, AdWords advertisers specifically select keywords under which they want ads to be served. For Google to implement TeknoSurf-style targeting, it would have to allow AdWords advertisers to opt into a program in which Google could place ads on the basis of what had been proven as the most effective keywords for that advertiser’s product.

In this situation, if an advertiser served essay advertisements based on the “Shakespeare” keyword, and those ads did very well on my site, Google would remember this. The system would automatically compare the text of that ad to the text of other AdWords ads, it would run similar ads on my site, and it would track the results to see how they ads performed. In this way, Google would constantly be learning what types of ads performed well on members’ sites and what ads didn’t. After publishers had used the service for a while, the program would be able to serve ads that were tailored to publisher sites’ visitors, rather than their content. Thus, CTR rates would improve, both Google and the publishers would make more money, and the advertisers would attract more targeted traffic.
How Much Can You Make?

The amount of money you can make with Google AdSense depends entirely upon the niche your Website fills. For instance, a site about men’s health can make a killing on AdSense because of the high level of competition for related keywords. The CPC rates for competitive keywords can exceed $1, which translates directly to your site’s earning potential within the program. Of course, if you’re in a less competitive niche, you’ll make less money. Still, I haven’t seen anyone report earnings less than an effective $1 CPM, and the average seems to be more along the lines of $4-$5 CPM. Some people are making an effective CPM of $15 or more with this program. And all these figures reflect what the site owner receives after Google takes its commission.

Commission is definitely one thing is that’s up in the air with AdSense. Google doesn’t publish the percentage it takes as a “cut”, and only displays the publisher’s cut in member reports. So far, comparisons of AdWords rates with AdSense earnings have produced commission estimates between 40% and 60%. Why Google refuses to publish its commission rates is unknown. It could be for legal reasons arising from the contracts the business has with premium distribution partners, or it could simply be that Google wants the ability to change rates without having to explicitly announce those changes.

So far, most members report steady declines in earnings each day. This could be a result of the issues I mentioned above, including the lack of ad rotation. However, Google will likely implement changes to increase the program’s effectiveness in future, so this phenomenon is likely to be temporary.
Looking to the Future

Currently, the online ad market is in a fairly dismal state. Though it has recovered somewhat from lows experienced after the collapse in 1999, Web advertising is still very much a buyer’s market. This is not because online advertising doesn’t work – it’s because people either do not understand how it works, or don’t know how to make it work.

One other reason is that advertising has traditionally been the realm of big publishers and big companies. Ad networks have changed this structure, and allow small publishers to display ads from big companies. However, due to the large minimum buys imposed by ad networks, most small companies have been limited to PPC search engine advertising. Google AdSense takes the PPC search engine model and allows small publishers to benefit from it. Now, for the first time, small companies can easily advertise with small publishers.

The implications of this are far-reaching. Currently, many advertisers will design low-CTR banners and pay CPC rates on them, or design high-CTR banners and pay low CPM rates on them. The end result is that the advertiser enjoys the benefits of either cheap branding or cheap traffic, and the publisher earns much less than they should. With AdSense, many publishers will likely end up abandoning low-paying ad networks, as AdSense ads are more lucrative and less annoying to visitors. This means that ad networks may end up with less available inventory and they will either fail, or end up having to charge more in order to compete with AdSense. Eventually, it’s likely that advertisers will be forced to pay a premium to run graphic advertisements that are more intrusive than the simple text ads Google offers.

Google generally has the public’s goodwill, and as these ads are provided by Google (and are clearly marked as such), the public will likely be more accepting of the advertisements. The current anti-ad attitude that pervades many aspects of society may be lessened by these types of ads.

All in all, Google’s new program is good for publishers and the Internet advertising industry as a whole. Even if you choose not to run Google’s ads, the ripple effect of their introduction may mean higher rates for the ads you do choose to run.