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Comments January 22, 2010

Why Google Search Revenues Are Increasing

Filed under: Advertising — Dave Rathbun @ 4:06 pm Comments Off 

A while back I wrote a post about Google Adsense where I discussed the mix of revenue between Adsense for Content and Adsense for Search. It included this graphic:

Revenue mix graph

At the time I didn’t have a good explanation (or even a theory) as to why this was happening. As luck would have it, I’m now getting zero dollars from Adsense for Search and am still waiting for a response from Google regarding the matter. While trying to determine what the issue could be, I have been reading the support forums for Adsense. I saw a post that suggested why my search revenues were rising.

Adsense Drivers

Content ads are driven by – naturally enough – the content on my web pages. Who is responsible for the content? Normally that would be me. In the case of a web site that includes a phpBB board, however, the content is created by anyone who participates in a topic. So any board member is creating content for my site.

But are those board members potential customers? Is the content they create suitable for advertising? In many cases the answer is no.

Board Customers Versus Board Members

But what about a board “customer” rather than a board member? I have statistics that show that about 80% of the visitors to my site are guests. They’re not providing any content at all, they’re consuming the content that is already there. They’re looking for something, whether it’s the answer to a question or something else. And how do these customers find what they’re looking for?

They search.

And if they use the Google search widget at the bottom of my page, then Google is quite aware of the key words they entered during the process. Those key words are words that the customer is interested in right now and that’s why they’re searching for them. Let me use a quick example… suppose I ran a discussion board related to a particular type of car. There might be lots of posts about performance tires on my board, so when someone reads a topic about these products it would make sense for Google to place ads about tires on the page. However, the person reading the page might not be interested in buying tires at the moment… he might just be asking a question about the performance characteristics or something else. But when someone searches the board for information about the tires, it’s assumed they have a specific interest… perhaps they’re looking for reviews from consumers before they buy tires. The search results page becomes more valuable real estate because the person is actively looking for tire information and not just reading about it for who knows what reason.

This makes those keywords more valuable than words that a board member happens to put on the page. And since they’re more valuable, they’re willing to pay more. Because they’re paying more, I am earning more. It all makes sense.

Conclusion

Despite this revelation, I still don’t have Google search active on my site. Until I can understand why all of my revenues are all of a sudden being retained for “search costs” I will leave it off. But I like the explanation and decided to share it here as a follow up post.

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