In the first post in this series I talked about Google’s Adsense program and how it works. In the second post I talked about my implementation of Adsense on my big board, and I started to talk about the revenue that I have made from the program. The money has been good… I have averaged $100 per month since I joined the program several years ago. I can’t complain about that; if I walked by a $100 bill sitting on the street I would certainly stop and pick it up. What is interesting is how I have managed to average $100 per month… the numbers behind that number, so to speak. This post will provide that information. With pictures. Lots of pictures.
I started using Adsense in May of 2005. Since then my board has grown substantially. Here is a chart showing page views (impressions) since I have been with the program. Note that these charts are used to show trends only; specific numbers have been removed from the axis labels to avoid giving out information that is too specific as per Google’s TOS. All data was obtained from Google’s reports, not my own statistics which include page views that do not include ads.
The upward trend looks great, doesn’t it? But that’s only half the story. For the same time frame here is a graph showing clicks as reported by Google…
Ouch. That doesn’t look so good. So in the same time that my page views have more than doubled, my click rate has dropped to less than half. That means that my effective click rate is only 25% of what it was when I started the Google program about three and a half years ago.
Here is another way to look at it. This chart shows the ratio of clicks per page views for the same period as the first two graphs. This graph looks just as bad as the other one, to be honest.
I would like to recap what I’ve said so far in two easy sentences:
- Page views are up; that’s good
- Clicks are down; that’s bad
Google Revenue Summary
An increase in page views shows that my site is growing, which is good. But it doesn’t generate revenue. Clicks generate revenue, and clicks are way down. Based on those statements the assumption could be made that my revenues are down as well. Here is a chart that disproves that statement. This chart shows total Google Adsense revenues (both content and search) since May of 2005.
Revenues were going down, then they flattened out, and are now they’re on a bit of an upswing. How is that possible with the steep decline in clicks? There are a couple of reasons. First, the click rate (payout rate) has gone up. So even if the total clicks are down, the rates paid for the clicks I am getting have gone up. The second (and more critical factor) is the ratio of Content to Search revenues has changed. I will talk more about that in a moment. The last factor is that my site has become large enough that some advertisers are targetting my site directly for their ads. I will come back to that in a bit.
During the first year of my participation in Adsense I wondered why I even bothered with setting up Adsense for Search. For the first six months I got single digit revenues (less than $10) per month. However, in 2008 the Search revenues have really taken off. Here is a chart showing the percentage of revenue from Content and Search. Blue (on the bottom) is Content, Orange (on the top) is Search.
In the beginning Search provided less than 10% of my total Google revenue. Now it’s closer to 40% and rising. I don’t have an explanation for this. I am just sharing the observation.
The Rest of the Story
The rise in search revenue isn’t the only reason that revenues have remained flat or up even with declining click rates. Google offers advertisers the option to target their ads to a specific site. When they do that, they are paying not only for clicks but for impressions or views. Here is where my increase in page views is helping out with revenues. I can’t provide a chart showing the breakdown of contextual versus placement ads since I think that’s getting a little close to being beyond what Google will allow me to share.
At this point I have posted about the Adsense process from an overview perspective. I posted about what it took for me to get Adsense integrated with my site. And now I’ve shown the good (and the bad) about Google over the years with some specific statistics. Now I need to decide what to do with all of this information.
As a reminder: These graphs are based on my experience only. I haven’t polled other Adsense users. I have not tried to contact other board owners and see what their revenues and clicks look like over the past few years. This is all about me. I could alter the placement and formatting of my ads, which would likely increase my CTR and therefore my revenue. As stated before, I don’t intend to do any of those things. In fact, I am planning to start phasing out Google Adsense altogether and replace it with something else. Why would I drop a revenue source paying $100 per month? What alternatives could I be considering? Those answers, and more, in (you guessed it) the next post in this series.