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Comments October 18, 2008

Board Advertising Options: Google Adsense Part I

Filed under: Advertising, phpBB — Dave Rathbun @ 7:19 am CommentsComments (3) 

Last year I started a series of posts about advertising on boards. The last post was just over a year ago, but I think it’s time to revive the topic. The first post in the series was titled “Keeping your Users” and it dealt with how to introduce advertising on your board without losing your valuable members. The second post was titled “Have Something to Sell” and it talked about evaluating your board content to see if it was going to be interesting to advertisers. The third and final post was my favorite in the series (because I got to play with numbers… I like numbers :) ) and was titled “Measuring RFM” because it talked about measuring “recency” and “frequency” which are of interest to advertisers. All three posts are linked at the bottom of this post for easy reference.

After deciding to advertise and determining that you have something to sell, what are the next steps? To start you need to find some source of advertising. I believe that the most lucrative advertising options are those that want to target your board members. Those can be hard to find unless the board has a very specific audience. So instead I want to start talking about my experience with a more generic but very popular advertising option for many board owners: Google’s Adsense program.


Content Sensitive Ads Require Content

Some folks may know how the Adsense program works but I feel like it’s worth a brief recap before going much further. There are two sides to the product: Adwords and Adsense. On the Adwords side are the advertisers that want to purchase space on the web. They don’t have specific sites in mind, and they don’t want to be bothered to seek out all of the smaller niche sites that might be of interest to them. Instead they buy advertising space from a single supplier (google) via a bid process. More on that in a moment.

On the Adsense side are the content providers such as myself. I have built a site (board) that has content, and I want to earn some income from it. But perhaps I am not able to secure specific advertisers for my board so I turn to a supplier (Google) that can provide those. I don’t get any say in how much I charge for advertising on my site… that is the first negative of this service. I am completely at the mercy of the advertisers that have bid for keywords that appear in my content.

Google is the middleman in this entire process. They manage the bidding process, and then they match up advertisers to content producers (website owners) based on a scan of the content of each page as it is being displayed. They have a vested interest in displaying the advertisements from the highest bidders because Google makes more money that way. How? They take a cut out of every ad that is displayed through their system. The content provider gets some, and Google gets the rest.

Adwords Bidding Process

I would like to do a more specific example at this point. Let me pretend that there is a company (Widgets-R-Us) that has just built a brand new widget that blows away anything else on the market. They want to get the word out, and fast. They could try to search the web for various boards or blogs that discuss widgets, and approach each board or blog owner individually about advertising, but that would not be very efficient. Plus, unless they’re familiar with the sites in question, they don’t have any idea of how active each site is in terms of page views.

So instead Widgets-R-Us will open an Adwords account with Google and bid on the term “widget” and other related terms. Perhaps they start the bidding at $0.15, but they soon find out that none of their advertisements are ever displayed. After increasing their bids to $2 they find that their ads are displayed some of the time. Finally, they increase their bid to $3.50 and find that their ads are pushed out to widget-related sites all over the Internet. The advertiser (the widget company) decides whether they want to pay per impression (PPV) or pay per click (PPC). From what I understand, that’s all part of the bidding process.

I have never been an Adwords customer, so most of what I just wrote is based on reading and research from other blogs or the Google documentation. I believe it’s a fair representation of the process.

Adsense Process

Meanwhile I have built a widget discussion board that is one of the top destinations on the Internet for widget-related material. I have no idea about the new company, but I have registered for the Adsense program. This means that for the past few months (as long as I have been a member) Google has been scanning my pages on my board and identifying keywords in the content. No doubt the term “widget” features prominently in their database of my content. When the new advertiser comes into the Adwords program and bids on the term “widget” their ads are matched up with my site in real time via a bit of javascript and a lot of server horsepower. Let me talk a bit more about that to be clear what’s going on.

When someone opens a topic on my board and views the page, the entire page (text content only) is sent to Google for a fast scan. When keywords are identified, Google does a match process with the Adwords customers that have bid on those keywords. They pick those that have bid the highest that match my criteria and send those ads back to the page that the user has just viewed. In theory this happens fast enough that it doesn’t impact the perceived speed of my site.

What about the “match my criteria” part of that sentence, what does that mean?

I have opted out of graphical banner ads for my board. So that means that I will only see text ads on my site. I suspect that this has an impact on my potential earnings, as graphical banners are more likely to be clicked than a text ad. Maybe Widgets-R-Us has only provided graphical banners in their inventory, and therefore I won’t be considered a match.

I may have also signed an advertising agreement with a major competitor to Widgets-R-Us, and as a condition of that agreement I have blocked any advertising from them, no matter what they have bid. That is another consideration that comes into play while Google is attempting to match ads to the content on my site.

Is It Truly Symbiotic?

The phrase “symbiotic relationship” has positive implications… it means that two (or more) organisms are coexisting to their mutual benefit. (The opposite could be a parasitic relationship where only one party benefits.) In the case of Adsense there are three participants: the advertiser, the content producer, and Google. Who gains the most benefit?

Google, of course. :) They are the only ones that know the entire system. They are the only ones that truly know how much money they make per impression or click. The advertiser knows what they’re paying, but they don’t know where their ads are being displayed or how they’re being presented. The content producer knows what ads are being shown and how much they’re making per click or impression, but they have no idea how much Google is holding back as their commission. Only Google knows the complete story, and they’re not telling.

This is one of the reasons why I can share aggregate (total) numbers from my Adsense experience, but I am prevented from sharing click or view statistics. Google wants me to brag about the money I’m making… but they don’t want any hints getting back to the advertisers as to just how much money Google is keeping from their bid amount. Oh, and they don’t want other Adsense customers to see my click stats and wonder why they are so high… or so low… compared to their own.

You’ll Get Your Money… But You Might Have to Wait

The last big hurdle for a small board or blog owner who is considering Google is that you don’t get paid until you reach a $100 balance in your account. If you only earn $5 to $10 a month you’ll only get one “paycheck” for an entire year of advertising. That might be enough to cover your hosting if you’re on a very inexpensive host. But is it worth having Google ads cluttering up your site?

Conclusion

In this post I outlined the Google Adsense process from the perspective of a board owner. I think it’s an adequate advertising source for web site or board owners, but there are a lot of negatives. In my next post I am going to write a complete case study that shows how much money I have made from Google in the last four years. I will also be sharing some disturbing trends.

Related Links

3 Comments

  1. I’d like to read your next post – come on. I am also finding it very difficult to find information on how to modify the standard phpbb forum to have a suitable layout for ads. I am waiting for answers to see if I can have it outsourced. But, if you have some instructions… I’d like to know. I want to put CPA ads on a popular forum (or even adsence) or even my own ads. But, I’ve got to figure out how to get them on the board in an attractive suitable manner.

    Feel free to contact me.

    Comment by james — January 13, 2009 @ 1:00 am

  2. Hi, thanks for the nudge, and welcome to my blog. I have a good bit of the post written and hopefully will be publishing it soon.

    Comment by Dave Rathbun — January 15, 2009 @ 2:31 pm

  3. James, I’m not sure you saw the other posts in this series:

    http://www.phpbbdoctor.com/blog/category/phpbb/advertising/

    They include a lot more information about the google numbers that I am seeing.

    Comment by Dave Rathbun — January 20, 2009 @ 1:17 pm

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