Google has a hefty lead in getting small publishers to put Google-powered ads on their websites. There is no negotiated deal – advertisers agree to take whatever Google decides to give them. Revenue share terms are not disclosed to these small publishers. The publisher simply places a piece of JavaScript code in the code of their website, the ads appear, and a check comes in the mail. For some, this is easy — for most, they don’t know the first thing about getting code into other code; so they likely hire someone to do this for them, then just leave it alone.
So there’s a large base of small (and some not so small) websites out there that now use Google AdSense to make some money. Plus, Google has a stranglehold on the pay-per-click (PPC) text ad market (just look at their earnings), which means increased advertiser competition, which drives cost-per-click (CPC) up on ads, which provides publishers with maximum revenue potential — well, assuming the rev-share % Google provides is the same as Yahoo!, Microsoft, or AdBrite. But no one really knows how much Google provides (99% of) the publishers using Google AdSense, which is really kind of a shocker — we’re all just trusting that Google is compensating us well, when really they could be taking 70% of the ad revenue and only giving publishers 30%. Google doesn’t disclose the rev-share to publishers.
Yahoo! was slow to the contextual ad game, but they are here now. They finally rolled out Yahoo Publisher Network (YPN), but it’s still in beta — you can’t actually get an account immediately, but rather only be considered for the program. Publishers have been using Google AdSense — why would they switch? Plus, publishers don’t want to mess with their code — removing Google and replacing with Yahoo code.
One way Yahoo can compete is on price and transparency. Simply giving publishers a higher percentage of the total pie, and actually disclosing what that percentage is, would convince many publishers to switch. But not all – the fact is that Google’s AdSense code is embedded on many websites and the switching costs are enough that they just won’t change to Yahoo.
Enter MyBlogLog
However, many publishers are finding the value in MyBlogLog — a distributed social networking platform that allows readers of blogs to learn more about each other and communicate with each other. Publishers — mostly bloggers — have been adding this code to their websites. Once you can get a publisher to add code to their website for your widget, they typically aren’t going to take it down.
I’m sure Yahoo! has plans for taking advantage of having this MyBlogLog widget code on many websites, to somehow edge their YPN code on to these websites — or simply integrate YPN into the MyBlogLog widget that already exists, so that publishers wouldn’t have to touch a thing. Coincidentally, MyBlogLog (Yahoo) is also tracking information on Google AdSense — how many clicks Google AdSense ads are receiving (on webpages that have both MyBlogLog and AdSense installed), the ad unit size, and what webpage those clicks occurred. Yahoo doesn’t know the CPC for each of Google’s ads, but they do know the click-through rate (CTR) — and can specifically target high CTR publishers first, with their YPN offering.
But even with the MyBlogLog widget access, publishers are looking for more money at the end of the day — the YPN offering would have to practically guarantee much more money to the publisher, in order to spur adoption and convert AdSense customers. Considering Yahoo doesn’t have as many advertisers as Google does, I imagine that 9 times out of 10, Google is able to compensate publishers more per click (once again, depending on the rev-share percentage back to the publisher).
Editor’s Note: Post by Steve Poland, whose blog Techquila Shots brainstorms web start-up ideas.
Hi Steve,
I tried YPN and took it down a week later after making 20% of what I was making with Adsense. While I HATE that adsense does not share what they make (making it easy to tweak whenever for wall st) the money was/is better.
You note that people don’t take the MBL code down, but Mike did
I agree with you that if Yahoo was smart, they would OWN the market for publishers by paying more than Google does. All the ads I saw were horrible and paid close to nothing. I would have no problem trying it again if I knew it would pay at least what Google is paying.
Adbrite has some potential. I found their interface hard to use as a buyer and seller and unlike other services, they price based on traffic. Have a low week? There goes your rate.
Good insight, Steve. It’s interesting to see that everyone’s gunning for web-based ads, while paying little attention to traditional advertising (or even new advertising — i.e. mobile).
I really don’t think changing code is a barrier to change. It is very easy, and for any large network they should have built it to be modular. One or two file changes, etc.
However, when changing networks it is difficult to properly estimate your increase/decrease in revenue. No way to know for sure. So testing must be done, and that can be costly.
Further you really can’t run both on the same page, as it is prohibited with Google to have other contextual systems on the same page. This may pose a problem with mybloglog having anything integrated automatically.
The trouble with the competitors to google is that the competition isn’t high enoguh within those tools markets to drive up the price per click to a point that it competes with revenue potential from google. That is changing though, and with yahoo making a renewed effort hopefully this will force google to play nicer (disclose pay rates, etc)
for yahoo to get my vote they’d have to beat google’s and adbrite’s revenue share – 80/20 and 70/30, respectively (publisher/agency) – and Clearly disclose it. no gray area bs
From what I’m reading people are making less with YPN than with Google adsense (including the first comment above).
I think many people will give YPN a whirl if they’re relying on Adsense to monetize their websites, but if it doesn’t pay as well or better they’re going to switch back…. and probably be annoyed at the income they’ve lost dropping adsense even if it was temporary.
Cost transparency aside, it’s going to come down to who has a reputation for monetizing traffic better when it comes to new and existing publishers deciding which one to go with.
@ some drifter
The actual percentage share is a small part of the big picture really. I don’t care if I’m getting 100% of the ad revenue if the service isn’t delivering relevant ads that get clicks and make me money.
always good to know that google adsense is in fact a terrible busines model:
http://www.seob...es/001960.shtml
The revenue share percentage is important to some publishers for philosophical reasons, but what actually matters is the bottom line. Either it generates more revenue than the other ad networks or it doesn’t.
It’s not too hard to test out the various networks to see which gives you the best deal. Do some A/B testing with a few networks. Try selling your own ads (Good Luck). Pick whatever works best; I bet it won’t have a whole lot of correlation to the rev share %.
Google’s rev share is lower (to the publisher) than 80/20…
If you look at Google’s most recent quarterly financial announcement (http://investor...ses/2006Q4.html), you’ll see they report $916M paid to AdSense partners, off gross AdSense revs of $1.2B. That’s a 76% payout.
Unless I’m mistaken, it seems Google is more concerned with attracting publishers than making money off them, which makes sense. The more publishers they have, the more inventory they have, and of course inventory volume attracts advertisers. Having the publisher base (combined with the leading search interface, desktop products, etc.) also allows Google to gather an incredible amount of data on each of us, which they use to improve advertiser CTR and publisher payout.
It’s a virtuous cycle, which won’t be disrupted easily by Yahoo. For Yahoo (or Microsoft, for that matter) to disrupt the Google juggernaut, they will have to offer advertisers, publishers and users more than just an incremental improvement — they’ll have to change the whole game. I just don’t picture Yahoo or Microsoft being able to do this. I think it’ll be some startup.
As for Yahoo/MBL, I think the question as to whether their widget violates Google’s adsense rules is very interesting.
Jordan – I think there was talk on webhostingtalk about this.
That 76% is a total. Let’s assume, the big boys like MySpace are getting way more than the 76%, it moves the rest WAY down.
It’s like saying, the yankees payroll is $140 million, but two guys are making $125 million of the $140. It’s not equal.
Yahoo has a chance today. They need to move. Their product is not as good or pays as well as Google. I agree that they need to not just beat them by a bit, but by a lot.
I disagree with Steve that people stay with Google because it’s hard to change out the code. Takes a minute and people would move quickly if another provider could provide a better stream of income.
Yahoo has to tread delicately — which is why I think YPN is still in beta (and it’s 2007). If they opened it up to everyone — publishers would sign-up, grab the code, and implement it to test. They would see that the YPN pay-out sucks compared to Google AdSense, switch their code back to Google, and never forget that poor returns from Yahoo … Yahoo wouldn’t get those people ever back.
Yep. But don’t you think the people who have tested it and reported the miserably pay are already doing that?
I mean if a hotel review shows a -1 star and 400 miserable ratings, would you still stay there?
switching costs are enough that they just won’t change to Yahoo
Actually, the cost to switch is below trivial. If Yahoo pays out more almost everybody will switch over to them, but it remains to be seen if YPN can equal Google’s excellent context matching which yield more to the publisher even with equal clicks.
I would literally drop AdSense in a second if I had access to a YPN account, because I could /easily/ be making 10x more than what I make with AdSense. YPN pays far better than Adsense, even when you don’t know how much of a percentage they’re taking.
I’d imagine they’re taking a very large chunk because I barely make anything per click.
Well, I for one will be trying out YPT when I’m able too.
Switching is simple. A few edits to a handful of php include files.
My experiment with AS versus YPN is similar to many other people’s who have posted on webmaster forums, YPN ad relevancy is worse but CPC is much higher, so overall YPN beat Adsense by 3X in revenue.
Steve:
Yahoo! Search Marketing was a client of mine in late 2005 when YPN! released their first beta. While I agree that Yahoo! should champion transparency as a point of difference from Google, a critical issue remains the relevance of contextual ad placement. Keyword advertising response rates are already dropping, and ad relevancy will carry the day.
Rich Ottum
eStrategyOne e-Business Solutions
“There is no negotiated deal – advertisers agree to take whatever Google decides to give them.”
Which in our case is literally twice what we get for our “negotiated deals.” This may be niche-dependent, but for our niche and for the amount of inventory we have, AdSense’s CPC ads translate to a CPM more than double the CPM we get from direct agency buys.
Until this changes, we don’t really care that Google is strong-arming us.
Don Wilson: I don’t know what your site is, but the CPM varies massively depending on the niche. If you are just running a dear-diary blog, you aren’t going to sell ads. If you are in a profitable niche and are not getting high eCPM from AdSense, you may need to do some SEO on your site to make sure the words in the site allow Google to know what the site is about.
I’ve been with Yahoo since they first went to beta. I find just the opposite. My revenue grew by 3X.
Changing code is simple
Google allow other competing contextual ads on the same page, with various restrictions on similar look, image placement etc.
e.g. It would be risky to place a Chitika block next to an Adsense block because of the images.
Yahoo do not allow Adsense on the same page.
Everything I have read regarding average Adsense publishers suggests the publisher receives between 30 and 40% – larger networks and sites offering better conversion rates might receive more.
It should be noted that quite a few monetization services have tracking of various kinds, and tracking advertising clicks is encouraged by the various contextual advertising companies.
Techcrunch is running Google Analytics – that can be used to track YPN and other advertising.
I am not sure what data Measuremap tracks, signup is currently closed, but they were acquired by Google
There are plenty more, but I don’t want to highlight services for the unwarranted wrath of the blogosphere who should be using more tracking and not less.
Changing the code should be easy if you added it knowing that you will have to remove it one day. I will keep a close eye on YPN and should it be easily available then I will try it out possibly using a smaller site to start with.
But I think knowing the percentage you get as a publisher and getting less at the same time may not be a good proposition. The one who pays more will win.
Is it too far off to have Yahoo! buy a company like Adbrite? It seems like they could take a big step in gaining more publishers for YPN with a move like that. Adbrite gives a publisher more freedom and control of what ads they show and the rates. A while back I wrote a post about this: http://www.inte...ld-buy-adbrite/
I think it’s an interesting idea of the Trojan horse of MyBlogLog, maybe they mix in Yahoo Answers with this widget or code plug in. Then the company Vizu.com fits in here some how too. One thing I wondered about as well was whether visitors ignore Adsense ads over time: http://www.inte...re-adsense-ads/
Now isn’t that an interesting connection…
I opened a MyBlogLog account on Feb 20 and got kicked out of AdSense on Feb 21. Pure coincidence?
See today’s (26 Feb) New York Times article:
http://www.nyti...xprod=permalink
Excerpt:
What Quigo offers is transparency and control in what can often be an opaque business: advertisers pay Yahoo and Google for contextual ad placement on a wide variety of Web pages, but get little say over where those ads run or even a list of sites where they do appear.
Quigo, by contrast, gives advertisers not only the list of specific sites where their ads have appeared but also the opportunity to buy only on specific Web sites or particular pages on those sites. It also allows media company sites like ESPN.com and FoxNews.com a chance to manage their own relationships with advertisers.
My site revenues have gone up 2x since I switched to YPN from Google Adsense.
This is not based on just one or two months of data. For about 9 months straight now, I have been making at least double of what I was making with Google.
IMO, if you are serious about making revenue from the web, you are just silly if you don’t even TRY something else. You should at least do a A/B bucket test with YPN and see how it works for your site.
Here is a translation of Daniels plight
http://translat...=en&ie=UTF8
It always amazes me why people complain when a company doesn’t have terms of service, because most of the time, if a company has terms of service, you basically have no rights because it has been written by a lawyer to cover the ass of their clients.
From what I have read with Google, you have to have a lot of data to defend yourself if you have a problem with clickfraud. There are a few guides around written by people who did manage to get reinstated. The most important factor in those guides were lots of tracking data
I doubt very much there was any problem with running MBL, otherwise they would have said something different, and also said something about multiple other similar tracking systems in the past.
Using tracking such as MBL could actually help in such a situation, although the current interface wouldn’t allow you to get that granular with the data
Very nice piece. I think Yahoo has made some brilliant strategic moves in recent times some of which will give them invaluable access.
If they offer a much better share it will be motivation enough to change given the pittance paid out by Google.
@Andy:
It was probably perfectly OK for Google to dump me based on their terms of service, and I’m not exactly complaining. But that story still makes me feel quite powerless.
Do you mean I should have challenged Google’s ToS in the first place?
Anyway, thanks for the information and your thoughts about MBL not being at fault.
Daniel
Great read, Steve.
Yes, people are freaking out since Shoemoney’s post came out about MBLs widget possibly violating Google Adsense’s TOS.
But I LOVE MBLs widget!
And I like the fact that I can filter my MBL stats by ad clicks.
The main fear from Google might be the days like Feb. 24, when MBL says my ads got 49 clicks, whereas Google Adsense said I only got 20 clicks.
But overall, they tend to be close — not that glaring.
And if Google kicks me out like Daniel Ebneter said he was above, oh well.
That’ll just be my sign from God to go with YBL or focus more on AdBrite.
Happy posting,
Paula
http://paulamoo...ey.blogspot.com
I run an arcade gaming site. (Not the one listed on this post) and here are my stats for for Google and Yahoo.
YPN average revenue per day = $1, 750
Adsense average revenue per day = $850
My revenue was MORE than doubled with Yahoo, and everyone I’ve talked to in the web space confirms the same thing.
ok hasnt YPN been in beta for a LONG time. they havent been accepting people into their beta for just as long. This is not really new.
We compete against AdSense for insurance & loan publishers and have found Google’s lack of transparancy and low CPCs (in our market) to be our most effective selling points. Allen Stern’s point was dead on, the 76% payout is an average heavily weighted toward the largest players. I would be shocked if the median publisher topped 60%.
One other consideration – algorithmic keyword-based targeting is pretty hit-or-miss based on the product category. In our space, very few of the top CPC advertisers participate in it based on the low conversion rates, creating low CPC payouts for AdSense.
I have used YPN and AdSense. YPN gives you a short term spike – as has been said above – they pay more – but the relevancy is much lower so the CTR is a lot less…. double the payment but 1/3 the CTR gives you a lower income.
I had a higher payout from Yahoo for about 4-5 days and then it dropped…. and have heard from many that that is how it is happening to them as well.
maruyasu-grape@world.odn.ne.jp
opened ok hasnt YPN been in beta for a LONG time. they havent been accepting people into their beta for just as long. This is not really new.
Why does YPN beta only restrict to US residence only.
good knowledge