Google AdSense Review

How Much Can You Make?

How much you can make with Google Adsense depends entirely upon the niche of your website. For instance a site about men's sexual health can make a killing on Adsense because of the high level of competition for related keywords. AdWords CPC rates on competitive keywords can exceed $1 or more, which translates directly to how much you can earn with the program. In contrast 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. All of these earnings figures are after Google has already taken commission.

Commission is definitely one thing is that is up in the air. Google does not publish how large their cut is, and only display the publisher's cut in their reporting functions. So far commission estimates by people comparing AdWords rates and AdSense earnings have been between 40-60%. Why Google does not publish their commission rates is unknown. It could be for legal reasons based on contracts they have with their premium distribution partners, it could also be that they want the ability to change rates without having to explicitly announce it.

So far most people are noticing a steady decline in earnings each day. This could be a result of the issues I mentioned above where Google does not seem to be rotating ads and so return visitors are much less likely to click since the ads are not new. However Google will likely implement changes to increase effectiveness in the 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, it is still very much a buyer's market. It is not because online advertising doesn't work, it is because people either do not understand how it works, or they simply do not know how to make it work.

One other reason is that advertising has traditionally been for big publishers and big companies. Ad networks changed this and allowed small publishers to get ads from big companies. However due to large minimum buys at 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. So 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 gets either cheap branding or cheap visitors, and the publisher earns much less than they should. With AdSense many publishers will likely end up ditching low paying ad networks, since AdSense ads are both 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 is likely that advertisers will be forced to pay a premium to run graphical advertisements that are more intrusive than the simple text ads that Google offers.

Also Google generally has the public's goodwill, and since 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 running 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 affect of their introduction may mean higher rates for the ads you do choose to run.

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