Monday, May 24, 2010

Google's Top Secret AdSense Pay Out Formula is Out

Google itself has blown the cover via a blog post by , Neal Mohan. He writes:
Today, in the spirit of greater transparency with AdSense publishers, we’re sharing the revenue shares for our two main AdSense products — AdSense for content and AdSense for search.

As you may already know, AdSense is comprised of several products. The most popular are AdSense for content, which allows publishers to generate revenue from ads placed alongside web content, and AdSense for search, which allows publishers to place a custom Google search engine on their site and generate revenue from ads shown next to search results. Since AdSense for content and AdSense for search offer publishers different services, the revenue shared with publishers differs for each of these products.

AdSense for content publishers, who make up the vast majority of our AdSense publishers, earn a 68% revenue share worldwide. This means we pay 68% of the revenue that we collect from advertisers for AdSense for content ads that appear on your sites.The remaining portion that we keep reflects Google's costs for our continued investment in AdSense — including the development of new technologies, products and features that help maximize the earnings you generate from these ads. It also reflects the costs we incur in building products and features that enable our AdWords advertisers to serve ads on our AdSense partner sites. Since launching AdSense for content in 2003, this revenue share has never changed.

We pay our AdSense for search partners a 51% revenue share, worldwide, for the search ads that appear through their implementations. As with AdSense for content, the proportion of revenue that we keep reflects our costs, including the significant expense, research and development involved in building and enhancing our core search and AdWords technologies. The AdSense for search revenue share has remained the same since 2005, when we increased it.
Funny, how Mohan doesn't use the word "profit" at all in the announcement. How about something like, "We make a damn good product that benefits publishers and advertisers, of the portion of revenues that we keep, in addition to covering costs it contains our profit for this damn good product."

Or am I mistaken and Sergy and Larry aren't billionaires because of Adsense?

Over the last 12 months Google's profit was approximately $7 billion.

What's really behind the announcement? Probably competition is forcing Google's  hand. There is this curious paragraph in Mohan's announcement which suggests this might be the case:

We hope this additional transparency helps you gain more insight into your business partnership with Google. We believe our revenue share is very competitive, and the vast number of advertisers who compete to appear on AdSense sites helps to ensure that you’re earning the most from every ad impression. Additionally, when considering different monetization options, we encourage you to focus on the total revenue generated from your site, rather than just revenue share, which can be misleading. For example, you would receive $68 with AdSense for content for $100 worth of advertising that appeared on your site. If another ad network offers an 80% revenue share, but is only able to collect $50 from ads served on your site, you would earn $40. In this case, a higher revenue share wouldn’t make up for the lower revenue yield of the other ad network.
But puhleeze, will someone please send Sergy, Larry and Mohan copies of The Fountainhead and Atlas Shrug written by that other super talented Russian, Ayn Rand, who would never have been afraid to use the word "profit."

1 comment:

  1. You are mistaken, AdSense is only a component of AdWords which is Google's advertising platform. AdWords made them billionaires, AdSense which is their platform applied to other sites (and hence shared revenue) is only a small part.