Business

Yesterday’s announcement thread was interesting. Lots of great commentary from Vince an Steve, and a whole whack of emails. Mountains of email all thanks to this topic! Hell, we even closed a few new ad deals and partnerships as a result, so it can’t be all bad, right? ;-)

Vince Cordic sent me an email yesterday, copied/pasted/shortened here (Vince, let me know if I’ve changed any context, k?):

I’d love to take your challenge, and I probably will (is there a deadline?), but I have a few problems/questions with it..   You say “Nothing in the posts themselves. Period. It converts stupidly well for AdSense specifically because it tricks users.”   I think that really limits the amount you’ll make with Adsense and is a little naieve. I agree you shouldn’t blend the ads so they look the same as your content, but if you distinguish the ads from the content and leave some whitespace, you’re not tricking users. You usually get better targeted ads that way, and a higher CTR – not because you’re tricking the users, but because the ads interest them and they are visible.   [...] Also, just to be clear, I was not referring to the eCPM per unit, but the overall eCPM. Increasing the eCPM per unit is a much different task then increasing the eCPM for the whole page. Simply because sometimes changing units around, or adding less or more of a unit makes all the difference.   I’m a little unclear about this part of it. Are we allowed to actually suggest changes for units (placement/size/colors etc.) or are we only allowed to change the colors and the units will remain where they are?   Another thing I’m wary of is the fact that those sites you mentioned are very cluttered to begin with and many of the optimal adsense placements are used by other banners/graphics. Many of the current ads, in my opinion, are much more intrusive than targeted contextual ads would be (such as the flashing win a free Ipod banner at the top of http://www.hilarynews.com/).   Besides all that, It’s gonna be difficult to actually do much when I don’t have complete access to the site and it’s demographics and what not. When optimizing a site, I usually make a ton of changes to the ads over about a months time (depending on the traffic).   Also, have you done a heat map of the sites in question, to see where users are focusing their attention and where they are clicking, that would be a good starting point.  

 First off, Vince, thanks for the response. I wanted to respond to Vince’s questions and comments in public, mainly because much of this debate has happened in public so it only makes sense!

Reader Interest in Ads

I’ve yet to see a single study that suggests that readers click on ads in content due to interest. I’ve seen several that show that at a metricable percentage don’t intend to click on the ads, they’re just doing things like clicking around, scrolling, playing, whatever (the things you see users do if you’ve ever done UA testing).

That’s not to say nobody clicks on ads because they’re interested. It’s just that people put their mouse in the content area. So if they’re going to accidentally click anywhere, it’ll be there. Not off to the side.

But if you have data to show that most users like these kinds of ads and click on them because they find them valuable, that would be incredibly important in my decision making! (fyi, no sarcasm at all in this, I know it could read that way, heh)

CPM

Let’s be real clear. CPM is a per-unit measurement. There’s no definition in the world that equates CPM to overall revenue generated from multiple ad units. Just see this Google definition search.

It isn’t your fault (Vince), nor is it anyone else’s that Google uses faulty terminology. It’s Google’s. And it pisses me off. Some folk say “well it’s eCPM”. The “e” is because you’re converting average clicks per 1000 views to revenue and based on that revenue to a CPM calculation. Which is fine, it’s pretty standard in the CPC world, so I have no issue with that. What I do have an issue with is that when calculating the CPM, Google uses the number of page loads, not the number of individual ad impressions. This artificially inflates the CPM. If you go to your Advanced Reports and select Individual Ad Units as the reporting type, you get a whole different view.

In fact, for most folk, what ends up happening to their 3-5$ CPM is that they have one unit that does really well and the rest absolutely blow. Effectively they’re placing the rest of the AdSense units for rates that are often 5c-40c CPM’s. Something any major ad network in the world could beat.

CPM is a per-unit calculation. The only way this discussion can continue in a healthy way is if we use the same terminology. And while I’m going to decide that we’re using CPM as a per-unit calculation it’s not like I’m pulling that definition out of my ass. The entire world, with the exception of Google, uses it this way.

Basically, though, the contest is for folk to raise our average per-unit CPM. So if you got one unit up to 7$ and another stayed at 3$ I’d still consider that an average of 5$ (give or take, because we’d average based on earnings for the traffic). End of the day, some units will be easier to increase than others, and I want folk who want to participate to have a fair shot.

Your Suggestions & Ideas

Vince, and anyone else, you can send in any ideas. Putting AdSense in place of existing units. Moving things around. Changing colors. Changing sizes. Whatever. Unless it interferes with the user experience, I’m open to any changes. So don’t worry about existing stuff, tweak to your heart’s content! Just send us a list of the changes, and we’ll make it happen as much as our platform allows :)

Site Stats

Good point Vince, I can totally see how site stats and demo info could be useful. If you get me a list of the info you need, I’ll post it here (as much as we have), k?

Why AdSense Sucks

There is a point to all of this. I hate AdSense. I think it sucks. However I’m a fairly fair guy and so wanted to give AdSense a chance. We’ve tried working with Google, including our Rep and our Optimization Team guys. All great people, but they hate giving specific advice (unless you’re testing something for them). They managed to help, but not to the extent we felt was necessary.

So instead of just whining about it, I decided to ask for help. But if I’d simply said “hey, anyone have AdSense advice?” it would have fallen on deaf ears. Again, wanting to be fair, I felt the cash prize was the only way to go.

Now, yes the contest has rules. Ultimately we are bloggers. We write. We publish. We interact with our readers. That’s what we do. Sure, we’ve built a (nearly) multi-million dollar business around blogging. But we’re still just bloggers at heart and, as such, we value certain things. Ask a normal blogger if they want ads at all on their blog and they’ll hum and haw. Now ask them if you can put one right in the middle of their first post and they’ll freak out.

Bloggers value certain things, and those values have rolled over into our business.

Does it mean we leave money on the table? Sure. But it also means we value our bloggers, value our readers and value our advertisers enough to find a very real balance.

But, still. Until proven wrong, I hate AdSense. Want to know why?

1. Google doesn’t disclose revenue share. Some folk think it’s as high as 80% for the average joe. This is wishful thinking. I’ve been on deals where you have to arm-wrestle Google just to get to 50/50. 80/20 is not what normal publishers get, guaranteed. The motto “Do No Evil” is by now a farce. If Google really wanted to do no evil, they’d be a leader in the space by pushing for transparency and so forth. Instead they’re the opposite. This is unacceptable.
2. They don’t pay enough. Flat out. A perfectly targeted at on a perfectly targeted page with perfectly targeted content is worth more than 2-3c per click. Period. If blog advertising rates (CPM and CPC) were where they should be, folk wouldn’t need to clutter their sites with ads, because 1 AdSense unit would provide both enough income and enough relevance to be truly useful. This was the promise of AdSense. That bloggers and publishers could make decent money (ie: enouh to build a company on), without turning their sites into splog look-a-likes.
3. Google is a pimp. They’ll take anyone. One-armed, buck-toothed, leprous, naked, just-came-out-of-a-nuclear reactor… Doesn’t matter how dirty a site is, Google wants it. They have no standards whatsoever. They happily accept sites that are against their ToS until someone reports they (and, no, you can’t tell me that the world’s smartest search engine can’t tell a site is against their ToS). Google makes billions off of the scum of the web. Sploggers. Spammers. Phishers. Domainers.
4. They deceive bloggers. Sorry, but putting CPM above a column that clearly isn’t CPM is misleading. Hell, it may even be fraud. Best case, it causes false lock-in by making bloggers think they’re getting a great deal when they could actually earn more money going elsewhere. Here’s a hint for bloggers: if you’re earning 3$ “CPM” from Google with 4-5 ad units, you could increase your revenue by almost 50% by joining a network like b5media.
5. Their support blows. I mean I generally dislike Google. They do some good stuff, but when was the last time you ever had decent support from Google? We earn Google more than a quarter million dollars a year, and we still can’t talk to someone on the phone. It’s crazy.

So yeah, this is partly an issue we have and I have with Google. But like I said, I wanted to give AdSense a fair shot before absolutely slamming it. But in doing so, I simply put in place the kinds of restrictions that most bloggers would put in place. Nothing that interferes. Nothing too overwhelming. Nothing that distracts.

If it’s possible to make more than 1$CPM’s (real CPM’s, not Google’s imaginary ones) with AdSense, consistently, even on high traffic sites, for the average blogger. Then great. I’ll shout about it from the rooftops. But if it isn’t, and even some chump company from Jersey with 3 months experience in the ad business can earn bloggers more, then I say screw Google and let’s get bloggers to take their valuable and unique content, commentary and billions upon billions of pageviews of traffic elsewhere.

Personally, I’m sick of being ignored, whored and bored by Google.