This article was last updated on March 8
Google’s AdSense program generates about 30% of the company’s total revenues and has been growing consistently over the last few years, despite all their search algorithm change and increase competition. So clearly this is a big and growing money earner for them.
However one thing I have noticed is that while the number of clicks I am getting on my (this sites) Adsense ads has gone up the earnings from all the clicks (based on actuals and effective cost-per-thousand impressions – eCPM) has gone down. That is, I am earning less than I used to from every click. I have noticed this pattern over the last few months where clicks are now only bringing in a fraction of what they used to bring in. This leads to me to conclude that if Google is still growing their Adsense revenue, then all else being equal they must have reduced their publisher payouts (a closely guarded secret of the company). Have other bloggers noticed this?
Here’s some insight into Google’s actions related to their paid ad clicks:
Its paid clicks rose 4% from the previous quarter, and 18% compared with the same period a year earlier. While some slowing in the growth of the company’s paid click rate has generated concern, Google has pointed to quality initiatives. Google has undertaken a number of quality initiatives aimed at reducing the overall number of paid clicks, in order to increase the individual value of each click, the company has said. However, the company indicated in July that it might reexamine efforts to cull the number of clicks in the interest of quality, fearing the effort may have gone too far.
Further on the topic of Google and Adsense, here is one of their sneakiest money earners : Delayed Payments. For those who use Adsense on their sites and earn enough to get a google payout ($100), realize that it takes about 35 (EFT) to 55 (Check) days for Google to pay you. During this time they are already earning interest on money they have received from their advertisers/customers without taking any risk at all. Think about how much interest they generate. Using a recent quarters numbers, $1.68 billion would mean that they generate about $23 million a month or more than $270 million a year in interest (assuming a 4% yield and 30 day interest period) without taking any risk whatsoever.
This is similar to a very simple and effective strategy consumers can apply when it comes to credit cards with which you can up get up to one month of free credit. Between when you make the purchase on your credit card and when you have to make the repayment you could use put the cash (you would have bought the item with) in the bank, and still make a full payment on the due date without incurring a penalty.