It happens.

I have posted a lot about the Adsense program over the past years, specifically related to advertising on phpBB boards. I currently do not use Adsense, but I did for many years. However I never relied on the revenues from that source to keep my board running. If I had, I might have ended up like this case study:

Warning to Webmasters: It can happen to you

The link contains a case study about Soccerpulse, a web site with over 100,000 members that closed up shop because their Adsense revenues declined and they could no longer afford to run the site.

You can earn more money by:

• Generating more traffic
• Generating more clicks
• Getting higher-paying advertisements

I’ll talk about each of these at a high-level in this post.

Adsense Recap

Adsense is the front-end of the Adwords advertising program. If someone wants to advertise their site(s) they can open an Adwords account and bid on certain keywords. (They can also target specific sites, but I’ll talk more about that later.) Google Adsense program participants are assigned a unique publisher ID and given a bit of javascript to place on their site. When a page is rendered, the javascript sends the content to Google who quickly scans it to identify keywords, then matches keyword advertisers with the content. The return value is a string of HTML that contains various advertising links.

And this all happens really, really, fast.

As a publisher, I can only control certain things. I cannot control what advertisers bid on my keywords, nor can I select ads from specific advertisers for my site. So how can I control my income?

Simply put, I can’t. But there are a few things I can do to try to improve my earnings.

Generating More Traffic

There are plenty of topics on phpbb.com about generating more traffic. I won’t try to cover that here since this topic is about advertising. Instead I want to talk about the impact of increased traffic on advertising revenue.

The first thing a new Adsense publisher has to know is that most ads in the program are paid by click (CPC) and not by impression (CPM). This is certainly in favor of the advertisers which makes it easy to understand why most opt for this configuration. Because of that, it might not be immediately obvious why generating more traffic could generate more income. It comes down to statistics.

Because of the Google Terms of Service (TOS) I can’t share what my click statistics are. So for this post I will make up some numbers. Suppose that I see over the past few months that I get 1 clicks for every 10,000 page views. Suppose that I have also noticed that ratio seems consistent as traffic goes up. It stands to reason that if I can project 5 clicks for 50,000 page views then I can get 50 clicks for 500,000 page views. If each click is worth $1 then it’s easy to see how my income goes up as clicks go up.

From what I have read (and experienced) there are several typical ways to increase earnings from this program. You can try to generate more traffic. You can try to generate more clicks. And you can try to generate higher-paying clicks. There are plenty of suggestions on this forum or the Adsense blog on how to do these things, but I’ll offer a high-level overview. One of your challenges (as I see it) is that the number of sites dealing with games / onling gaming is HUGE and therefore you’re up against a lot of competition.

To generate more traffic you need to get more people to come to your sites. Sounds simple, but it’s not. Whether you do this via advertising, search engine optimization, or some other means of promoting your site is up to you. You also need to make sure that you do what you can to retain your existing visitors while gathering new traffic or you simply end up churning (keeping the same amount of traffic but from different users). From a marketing perspective, most folks will tell you it costs less to keep an existing customer than to get a new one, so try not to go after new traffic at the expense of existing traffic.

Getting More Clicks

There are lots of illegal ways to generate more clicks but also legal ways. Try different ad placements or different color schemes for your existing ads. It works best if you set up different channels so you can track what techniques are successful. And don’t stick with the new style just because something is successful for a short period of time. You need to continue to monitor the relative performance of your different placements and colors. Sometimes a change in style will generate short-term spike in user interest but fall back to the same or even lower levels afterwards. I experienced that myself. I did something as simple as changing the color of the border. Ad clicks initially spiked, but a few months later they dropped. And they continued to drop even below the level of activity that I had before! Ultimately went back to my original style of ads and activity picked back up again.

Getting Paid More Per Click

Finally, generating higher-paying clicks. As mentioned above, Adsense is the front end for the Adwords program. Adwords allows advertisers to bid on various keywords. Because it’s a bid process (meaning Google doesn’t set prices) the advertisers are in control. If you have sites already set up, your content is set, and the keywords related to that content are likewise set. In other words, your rate of return for clicks based on your content are set by the Adwords bidders, and there’s really nothing you can do to alter that. There are some folks that will suggest that your site needs to be about topic X, Y, or Z in order to generate big returns on clicks, but to be honest unless you have expertise or interest in those topics it’s hard to get interested in building a site around those areas. At least it is for me. I would stick with your current sites unless you have other interests and then you can consider branching out to new areas.

There is an option provided by Google where you can tag certain content areas on your site and ignore others. For example, if you have a discussion board (forum) or blog, you would want to tag your content and ignore the template text (like menus and so on). That way your keyword density goes up and you might get better ads. But you really can’t determine how much those ads pay.

Once your site gets big enough it may draw the attention of specific advertisers. If you can do that, it really helps. Those advertisers will bid on your site, specifically, rather than content-driven keywords. Some of those ads will be paid on an impression (page view) basis rather than clicks. I always like it when this happens, because my site does millions of page views on a monthly basis. You can find out if this is happening by going to the advanced report tab if your adsense account. Choose Adsense for Content, then down near the bottom of the parameters you will see an option to “Show data by…”. When you select Individual Ad you will get an additional checkbox that allows you to break out income by contextual or placement.

Contextual ads are there because of keywords. Placement ads are there because the advertiser told Google to specifically target your site. Placement ads might be paid per click, but they may also be paid per page views. From what I have read, you can’t expect this to happen unless your site content is highly unique or you have enough traffic. So we’re back to generating more board traffic at this point. I don’t have any specific knowledge, but 500-700 impressions a day probably isn’t going to get you any placement ads. I first started noticing this because I had days with revenues and no clicks, so I looked into it further. That was back when I was generating 10-15K impressions a day, and I do more than that now.

Summary

So, to summarize:

If you can increase traffic then one would expect your clicks and therefore your income to increase.
If you can generate more clicks from existing traffic, your income should also increase.
You could try different content to see if the clicks pay out at a higher rate, but then you’re starting over with a brand new site.

But it’s really hard to generate more income per click on existing content because that’s controlled by the Adwords bidders.

Finally, you have to be aware of the fact that Google does not publish their algorithms for determining ads that are displayed on your site, nor do they publish how much money they retain for each click on your site. Either or both of these things could change and have a dramatic impact on your earnings from the program. There really isn’t much that you can do in this area, other than be sure not to rely on Google adsense income for your house payment.

What I have seen over the years is my traffic is going up every year. That is a success for me on the first point. My clicks as a percentage of page impressions have actually gone down, so you could say I have failed on the second point. However, even here there are things outside of my control that I believe are affecting my click rates. It could be blamed on the increased use of Firefox which has several adblockers built in, or on increased “ad blindness” due to the fact that Google ads are everywhere now.

In short there is no magic button that you can press to increase your earnings from this program. You can coast along with what you have now, or you can try to make improvements in some of these areas.

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.

The Google Float is the amount AdSense publishers have accrued in earnings but have not yet been paid. You know, all those people that haven’t reached the $100 mark that triggers a payment. The figure is currently at $532,547 million. That’s over a half billion dollars. If Google killed AdSense, they would have to pay that all out.

One interesting thing about the AdSense float is that it increased last quarter by 3%. In the 2 previous quarters it decreased. I wonder if this was due to all the AdSense accounts that were disabled recently.

Tell me there’s no incentive to start figuring out ways to avoid paying out those funds.

I myself have seen one strategy… Google simply stopped paying me. That’s not the actual process, but that is the net result. I have more than one post about how the search links from Google had been starting to pay more than Adsense for Content. A couple of months ago (September) Google fixed that: the took 100% of my search earnings (yes, that’s correct, I wrote 100% as in all of it) for a “search costs” adjustment. This fee isn’t new… or rather the ability of Google to apply this fee is not new. It’s covered in several places on their site and in their terms and conditions.

What are the fees mentioned in the Terms and Conditions?
Adjustments

The problem that I have with this is after almost five years of zero adjustments I find it irritating, frustrating, and in fact downright suspicious that Google has decided that my “costs of search” now equal my entire search revenue amount.

For two months in a row.

I sent Google an email. I got a form letter back.

I have removed Google from my sites.

Revenue Trend Background Information

About a year ago I wrote a blog post that included lots of graphs showing various trends in my revenue from Google. In that post I detailed how search revenues were increasing as a percentage of my overall Google income while content revenues were decreasing. Here is the graph I used to show the number of clicks over time on the content links.

Despite the steep decline in clicks, my overall Google revenues were up, as shown here.

The fact that revenues were flat to marginally higher over the past year was driven by the fact that my search revenues had jumped from about 5% of the total mix to over 40%. This graph showed that.

Search Results In My Template

All of these graphs are about a year old because they were built for a post published in November of 2008. As I mentioned at the beginning of this post, I recently learned about some new options for formatting search results. I can embed the search results inside my own page. Before all I could do was give Google a logo to display at the top of the search results. Now I can use my board template (both header and footer) to frame the results, and I also can control where the Google ads appear. In the old version ads were displayed on the top and bottom of the page, meaning both before and after the search results. I strongly suspected that was the reason I was seeing such an increase in search revenues; people were mistaking the search advertisements as search results. While I appreciated the income, that was not what I wanted to see.

Here is what things look like after I reworked the template using the new tools Google provided:

The formatting looks great, if I do say so myself. It’s embedded within my board template. The search results are clearly demarcated as the ads are enclosed in their own box and labeled. Anything I put on my board header (banners, site announcements, and so on) is included on the search results. The bottom of the screen image is cropped but I can tell you that my standard board footer is also displayed. I am very pleased with the formatting of the results.

It was easy to do. I created a page in my board root directory that looks like this:

<?php

// standard hack prevent
define('IN_PHPBB', true);
$phpbb_root_path = './';
include($phpbb_root_path . 'extension.inc');
include($phpbb_root_path . 'common.'.$phpEx);

// standard session management
$userdata = session_pagestart($user_ip, PAGE_SEARCH);
init_userprefs($userdata);

// set page title
$page_title = 'Google Search Results';

// standard page header
include($phpbb_root_path . 'includes/page_header.'.$phpEx);

// assign template
$template->set_filenames(array(
        'body' => 'google_search_body.tpl')
);

$template->pparse('body');

// standard page footer
include($phpbb_root_path . 'includes/page_tail.'.$phpEx);

?>

The code posted above is for phpBB2, but it would be just as simple to do the same thing for phpBB3. The template is also simple. The only thing in it is the code provided by Google when I set up the custom search parameters. It’s a bit of css and javascript and that’s it. I won’t show the code here because it would be different for each Adsense client.

Format Good, Clicks Bad

There was a significant impact of the format change on my search revenues. The next graph shows total search revenues since the beginning of 2009. Note that I cannot provide too much specific detail as per Google’s terms of service but I think the scale and direction of the change are quite obvious. (Clicks are on one axis and revenues are on the other in order to make them show up with a similar scale.)

As I said, there was a significant impact to my bottom line. Fortunately I view the revenues from Google as a supplement to my regular advertising. As such, I don’t plan to do anything to reverse the changes I made. I like the new search results formatting. The fact that my search revenues have dropped over 80% isn’t a major concern for me. I should restate that. I am not happy that my search revenues have dropped over 80%, but I am not going to do anything about it. I view the fact that so many people were (apparently) clicking on advertisements thinking they were search results as a problem that I have just solved. The revenue drop is a result of that solution.

It will, however, be interesting to see if this is a minor bump or a long-term change in user behavior on my board. I will follow up in about a year and let you know.

Registration. In order to have access and use of the ShareThis Widgets, registration is not required but is strongly recommended.

Yet in order to “get the button” they required me to register. When I sent a note to the support group, I was told that they no longer offered a “no-registration” option for their service. Why do they require me to register at all? In order to provide analytics and reports that show how many people are sharing content from my site, they need to have a unique identifier for my account. Since I’m not (at this point anyway) really interested in more reports and analytics, I decided to pass.

Now that I knew what to look for, I quickly found AddThis.com. It seems to be the same type of service but they offer an option that does not require me to register in order to use it. I spent a few minutes looking over their site and quickly selected the options and format that I wanted to use. I already have a toolbar with various icons at the top and bottom of my topic pages, so it was really easy to add one more icon to the mix. Here is the final product in action:

With this new icon, when someone sees a topic they like they can easily add it to their favorites, their Facebook, LinkedIn, Twitter, or any of the other social media sites supported by the service. How hard was it to add this code to my site? Not hard at all.

First I had to establish a link to the Add This javascript. I opened my viewtopic_body.tpl file (this is for phpBB2 in case that’s not clear) and added this line at the top:

<script type="text/javascript" src="http://s7.addthis.com/js/250/addthis_widget.js"></script>

Next, a few configuration options to specify which links I want emphasized versus those that I want relegated to the “more” page or removed altogether:

<script type="text/javascript">
var addthis_config = {
        services_compact: 'blogger, linkedin, delicious, live, digg, reddit, facebook, twitter, favorites, more',
        services_exclude: 'print'
        }
</script>

I did a bit of tweaking to the list of services in order to get them to come out alphabetically in columns, otherwise they came out in rows. I also excluded the “print” option because if you look at the icons in the screenshot above you will see that I already have a print function that uses an alternate template.

Finally, I included this code in the spot where I wanted the icon to appear:

<a href="http://www.addthis.com/bookmark.php" class="addthis_button" style="text-decoration:none;"><img src="http://s7.addthis.com/static/btn/sm-plus.gif" width="16" height="16" border="0" alt="Share" /></a>

That was it. Short, sweet, and functional. If at some point I decide I want to know more about who is using this icon (and what they’re sharing where) I can always register with AddThis and they will start tracking activity. Since the main driver javascript is hosted by AddThis.com I will automatically get any updates they provide to their service. Finally, as they say on their site, I get access to “Over 50 social networks in one button. And growing.” That works for me, and let’s others work for me too. Not a bad deal at all.

Google Adsense Replacement

On my largest board I have only ever had content ads on the bottom of the page. For the most part the ads worked quite well; when we started talking about cheese in one topic we started seeing ads for cheese on the bottom of the page. But cheese isn’t what my board is about, and I’m thinking that I have enough activity to do something different.

My current sponsor program allows each sponsor to share the banner space on the top of my board. Initially it was one banner for a set number of calendar days (weeks). Now it’s a shared space with rotating banners so I can easily add (or remove) sponsors from the rotation. But I think the concept of renting out the space on a more dedicated basis might have merits and that’s where my next experiment is going to go.

Sponsored Forums

This is not a new idea; many boards do it. But the implementation in my case might be a bit different. What I am considering launching (probably around the end of this year) will be a text-only forum sponsorship. The existing sponsors will retain the banner space at the top of the page, so there will only be one banner on the page at any given time. But by offering text ads on a per-forum basis, I hope to attract sponsors that are interested only in part of my board as opposed to the entire thing.

I plan to start out with the exclusive weekly booking for this new feature. For one thing, that makes life very simple. Every single page view for a specific forum will show the sponsor for that forum. The booking starts on a specific date and ends on a specific date. By doing this the billing becomes quite simple, and the coding is easy as well. If the program works, then I can expand it. If not, I don’t think I will go back to Google, but will look for some other alternative.

The bottom line is that the bottom line for Google has reached the point where the cost of having it (user opinions, page load times) isn’t providing enough benefit in the form of income to continue using it. It’s time for something different.

Board Activity

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.

Revenue Mix

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.

Conclusion

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.

This post is going to get very specific… or as specific as I can without getting in trouble with Google. I am going to share my experience with their Adsense program. I’m even going to include some real numbers.

Getting Set Up

There is a certain cost associated with getting started with Google Adsense. I had to apply for an account (free). I had to spend some time to learn how to integrate their code with my site. The Google TOS (Terms of Service) says that their code can only be displayed on content pages. The reason this makes sense is their ads only work if there is content that can be matched. How much content is there on your memberlist? On your login page? Not much, and therefore displaying ads on those pages is fairly useless. For that reason I didn’t want to include their code in overall_header or overall_footer.

Without going into too much detail, here is what I did:

• Added a field to phpbb_forums table that determines whether ads are to be displayed for that forum or not
• Added code to page_tail.php that determined the calling page
• If the calling page was index, viewforum, or viewtopic and the forum being displayed is one that allows Google ads then poke the Google javascript into a template variable

I probably took about two hours to write and test the code. If I am generous and pay myself $100 per hour and I include the time it took to fill out the paperwork to get an account I will say that the total cost to get set up and running with Adsense was about $250. Of course that’s not real money out of my pocket.

At the time I started with Google I was averaging between 20K and 30K page views a day. Here are the numbers from my statistics table:

+--------------+---------------------+
| Year - Month | Average Daily Views |
+--------------+---------------------+
| 2005-04      |               21397 |
| 2005-05      |               23704 |
| 2005-06      |               26490 |
| 2005-07      |               23124 |
| 2005-08      |               31129 |
| 2005-09      |               28650 |
| 2005-10      |               29068 |
| 2005-11      |               30388 |
| 2005-12      |               25713 |
+--------------+---------------------+

The page views that Google measures will be lower than these totals since I don’t display their ads on pages like posting.php, profile.php, login.php, and so on. In fact, the average daily page views for May of 2005 according to Google records was 11,509.

So enough with the setup… how much money have I made? I am getting to that, but first I want to talk about ad placement.

Ad Placement

At the time I started Google I already had a board sponsor paying for banner space at the top of my board. As a result I only displayed Google content on the bottom of the page. This, to be honest, is the worst possible place for advertising. Google wants you to put your ad code on the top of the page. If not the top, then near the top and perhaps down the side using a skyscraper format. With discussion boards they even suggest including advertising between the first and second post displayed on each page. I hate that. And since I don’t like it, and since I was only testing out Google on a whim, I displayed ads only on the bottom of the page.

Google will also suggest that you get better CTR (click through rate) if your advertisements stand out rather than blend in. Again, as a personal decision, I purposefully set up my ad format so that they use the same color scheme as the rest of my board. I didn’t want them to stand out because I didn’t want to risk driving my users away with overt advertising. In other words, I did just about everything wrong.

But how much money did I make? Wait, I’m getting to that.

Google Search

While I was setting up Google Adsense for Content I also read about Google Adsense for Search. This program lets me create a custom Google search output page that includes my board logo. All I have to do is include a Google search box somewhere on my page. When people use that box to search my site, they are taken to this custom page for their search results… oh, and Google displays context-sensitive ads along with the search results.

But how much money did I make? Yes, it’s time to start looking at some numbers.

Google Revenue Numbers

In the first month I made $120.82. In the second month I made $172.14. The breakdown was $278.08 from content and $14.88 from search. After just two months I had already recovered my initial “investment” of $250 worth of my time (at a very generous $100 / hour remember). I started using Adsense for content and search in May of 2005 and have continued through to today. It’s the easiest five thousand dollars I’ve ever earned.

Yes, that number is correct. Since May of 2005 I have earned over five thousand dollars with Google Adsense. And from what I have mentioned already, those numbers represent about half (or even less) of what I could have earned if I had tried to optimize my ad placement and formatting even just a little bit. I talked with one gentleman who runs a board very similar to mine with about one quarter of my activity, and he was making over $1,000 per month with Google Adsense.

If you do the math; at the time I am writing this post I have been with Google for 41 months. If I have made over $5,000 during that time, my monthly average revenues from Google is over $100 a month. In my last post I mentioned that I only get paid when my account exceeds that limit. So far that has not been a problem for me.

Could I Improve?

Of course Google is happy that I am making money… because it’s not possible for me to make money unless they’re making money at the same time. Not too long ago I was actually approached by someone from Google offering to help me optimize my site. Were they just being neighborly? Of course not. By helping me make better decisions about ad placement and formatting, they would ultimately help themselves because any time I make more money Google makes more money as well. As I described earlier in this post, however, I have very specific reasons for displaying their ads in exactly the way I have them today, and I don’t intend to change them.

Boards with different subject matter would likely do better than me. Ads for real estate or poker / gaming sites apparently pay much higher click rates than my ads. I am not basing this on experience but on rumors, so that information is probably a bit suspect. But overall, Google has been a really decent return for a minimal amount of effort. But is it really for everyone?

Google For Everyone!

Is Google the best solution for everyone? In my opinion, no. First of all, I had a reasonable amount of board activity (20K daily page views) before I started. I had quite a bit of content (nearly 150,000 posts) on my board. If you have a brand new board, I don’t suggest that you use Google. Why not? Because first of all, you haven’t established your users yet. In one of my earlier posts about board advertising I touched on the idea of alienating your community by installing ads too soon, so I won’t repeat everything here. It’s something to think about.

Without posts you haven’t established your content yet either. Adsense works with content. If you don’t have content, you will get PSAs (Public Service Ads) that don’t pay anything until Google figures out what your site is about.

Bottom line, at least in my opinion, is that Google is not a good option for a brand new blog or board. I would suggest waiting until the site is at least two years old or has some level of content before considering Google as an option.

What’s Next?

I shared a few monthly numbers earlier in this post. In my next post I am going to share more numbers and point out a disturbing trend that I am willing to bet is not just affecting me, but other Adsense consumers as well. See you next post.

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

• Advertising on Forums Part III: Measuring RFM
• Advertising on Forums Part II: Have Something to Sell
• Advertising on Forums Part I: Keeping your Users