Friday, November 13, 2009

Does AdSense makes sense?

This is the question for many of us working in online advertising.
No doubt AdSense is a great tool. It basically gives you money without doing practically no sales efforts. You just sit back and focus on your content or on traffic generation and AdSense will take care of your income.
That sound great for a good blog, a small magazine or a niche site, but of course... there's no free lunch. Some say the share Google gets from each dollar advertisers pay is as high as 50%. Other estimates put that between 20%-30%. In any case 20%-50% is big slice of the pie, specially if you have a lot of traffic and that's your revenue generation model.

What if your website has a million visitors per month?

What if you have 10 or 20 million banner impresions per week?

Then maybe AdSense is not that great anymore... or at least It's worth to re-think the way you use Google AdSense.

I'm the General Manager of a company called e-Holding. Our network of websites has around 3 million visits per month and I'm currently trying to answer the two questions posted above.
Of course we generate some money through AdSense but that's not what worries me. What worries me is how much money I'm leaving on the table (meaning giving it away to Google) by not selling that advertising space by my own salesforce.
I'm sure lots of other media companies have the same concerns. Although I still don't have a definitive answer, I think Advertisers in the same situation that I have could benefit from the following guidelines:

  • It's a gradual process: It's not about cutting 100% of Google AdSense and trying to sell all your Ad space through your salesforce. If you want to get more share of revenue, you can start by cutting AdSense from your premium Ad space and leaving it active on the less atracctive places.
  • Training of your salesforce: You can't cut AdSense if your salesforce does'nt have the capacity or skills to sell directly to clients. That takes time. In the meantime, you'll still generate marginal revenue by leaving AdSense, even on premium spots. As soon as your salesforce is ready, start by taking it out from your premium spots.
  • Block key Advertisers: If you approach some advertisers through your direct salesforce they'll usually respond: "Why will I buy from you directly if I can run Ads on your website through AdSense". The advertiser will probably pay more or less the same (maybe a little less through AdSense). The difference is that through a direct sale you as publisher get 100% of the revenues, while through AdSense you get between 20% and 50% less. AdSense has some tools for publishers that allow you to block specific advertisers. You can star here. This way you don't cut out completely your adsense income but at the same time give your salesforce mor chances to sell directly and generate higher revenues.
These are just some thoughts... I still don't have a definite answer about what to do with AdSense...Should I take it out completely? Why? Why not? What other criteria should I be taking into account?
Maybe you can help me a bit... comments are open