3 Comments

Google AdSense And Transparency

May 26, 2010
by

A great thing happened this week: Google went transparent. Well, kind of.

Google announced that it pays 68 percent of its advertising revenue to publishers on AdSense for content and 51 percent for AdSense for mobile. Hmmmm, ZDnet asks a good question: is that the mean, median or mode?

I don’t think that everyone gets 68 percent. Google tends to count all sites big and small when it talks about AdSense. That means that AOL, which early on got upwards of 100 percent revenue share would be in there. So what does the little guy get?

You tell me

Let’s run a test. I bet at least half of the people reading this have 2 or more sites with at least one on AdWords and one on AdSense. Run an ad in AdWords on your own site and click on it. Make sure it’s a page that no one else will see. Get fancy and use a channel. Then calculate how much you spent and how much you earned. Did you get 68 percent? Doubt it.

Why now?

Why did Google decide to become transparent now? Maybe it has something to do with one of the many anti-trust lawsuits it’s dealing with in Europe. But more likely, I have a sneaking suspicion with the FTC ‘s ever increasing interest in our industry. Many of us have been saying for a long time that if we don’t regulate ourselves, the government will.

Let’s see. Yahoo killed Search Submit Pro (aka Paid Inclusion / nee Inktomi) at least seven months prior to giving its search results to Bing. The service ran almost on autopilot. Sales had been outsourced for years. It was as good as free money.

Remember the FTC regulation last year that bloggers were up in arms about? Those weren’t aimed at bloggers (at least not most bloggers). It was aimed at the nutraceutical ads that were on Yahoo’s home page (and many other places on the Web).

Google could just be seeing the regulation writing on the wall and adjusting accordingly.

About David Lewis

David Lewis is the CEO and founder of 77Blue which operates online shopping websites. Prior to that, he worked in business development at GoTo / Overture. David was a product manager and accountant in past lives. In 2006, David won Commission Junction’s Horizon Award for Innovation and was a finalist for Linkshare’s Golden Link Award. You can find David on Twitter @thedavidlewis.

Twitter: thedavidlewis
Filed under: Case Studies + Internet Marketing + Internet Strategy + Search Engine Marketing + Social Media
  • http://www.dseneste.dk Søren Storm H

    Also, what many don’t realize is that Google takes a 15% “serving” fee off the top, before splitting revenues with publishers. So if you do the math, 68% of 85% is really 57.8% – not nearly as generous as first it seemed.

    http://battellemedia.com/archives/2010/05/google_…

  • http://davidlew.is David Lewis

    I credit that math to Todd Tappin, CFO of GoTo. Our deals were a 50% rev share with a 30% fee taken out to start. That sounded a lot better than a 35% rev share for the partner.

  • http://www.markzonder.com/ Amy

    Also, what many don’t realize is that Google takes a 15% “serving” fee off the top, before splitting revenues with publishers. So if you do the math, 68% of 85% is really 57.8% – not nearly as generous as first it seemed.