Wednesday, April 20, 2016

Lower Revenues Plague Publishers

A lot of publishers have noticed some major changes in their Adsense earnings since the beginning of 2016. Some of you might be surprised to know that "dropping revenues" aren't new. Anyone that has been with AdSense for more than a couple of years will already know that revenues continue drop on a CPC basis.

Back when AdSense first became a popular product (AdSense's beginnings go back to 2003) it was easier to earn enough every month to not only make a living doing it, but to toss up a website in a day or two and build your site portfolio. Earnings topping thousands of dollars every month per website were not that tough to acquire if you had a computer and internet access. The number of websites were much smaller than the number today, but so were the number of people using the internet much lower.

Over the years, marketing changes have made it a lot harder. As publishers, we like to think that AdSense "has our back", but the fact is that a lot of changes made in AdSense's products are usually precipitated by advertiser satisfaction, rather than by publisher's demands. And because advertisers can now place ads for much less expense, and there are many more publishers and monetizable platforms, the earnings are driven downwards on a CPC basis.

In everyday terms, it's representative of the supply and demand theory. When you have a lot of something (in this case publishers), and less demand for that something (not as many advertisers), the cost (in this case CPC) should go down. But supply and demand is not quite as simple as that. Even if you have a lot of publishers/websites, if you also have a lot of advertisers, the cost should remain relatively stable.

The number of publishers at any given time can fluctuate rapidly - new publishers being approved, other publishers just deciding to quit, or publisher accounts being disabled ... there are many reasons why the number of publishers can change. But the constant incoming of new publishers and outgoing of disabled publishers tends to keep the numbers within a certain range. Today, although there are more than 2 million publishers, AdSense hasn't really given specific numbers.

Then there are the advertisers. While the advertisers might not be equal to the numbers of sites using AdSense on them, the advertiser numbers grow and decrease monthly too. New advertisers and business owners spend their advertising budget with AdWords; some leave, or close their businesses, sell their websites or ... simply run out of money.

As the internet grew, so did interest in online advertising grow. Today, there are hundreds of established companies that provide online advertising to businesses and individuals and the explosion of ad agencies also helps to drive the cost to advertise "netwide" (ie: not just AdWords cost, but advertising across the entire internet) lower.

That leaves publishers with lower earnings per click than what they might have made regularly back in 2003. Long term publishers will have experienced decreased revenues on a CPC basis fairly regularly over the years, so while it hasn't been a lot of fun to deal with decreased revenues, it is something they've learned to handle. Publishers that learn to expand their holdings into other platforms (like apps and videos) can sometimes increase their earned revenue by making use of new technology, even when the CPC rates stay the same.

Publishers who have less experience with AdSense tend not to be quite as stoic, and are often less inclined to use new platforms.

We've seen lots of frustration, anger and bewilderment in the forums over lower earnings. Sure, there can be other reasons for a (a lot of invalid activity/traffic/clicks for example) reduction in earnings, but in the end there is only so much a publisher can do when the lower earnings are based on the cost per click.

Create new, original and interesting content regularly (ie: WRITE YOUR OWN), increase your readership, expand into new platforms and look for realistic ways to increase your earnings (staying within AdSense policy of course) - but no matter what you do, you have to be the "author" of your own success. Nobody else, not even AdSense, can do it for you.

posted by J. Gracey Stinson

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