AdMoolah News and Views

Recently, AdSense changed. JenSense has a post detailing all the changes.

One of the major changes is that publishers now must include a privacy policy. The new Terms and Conditions states:

You must have and abide by an appropriate privacy policy that clearly discloses that third parties may be placing and reading cookies on your users’ browser, or using web beacons to collect information, in the course of ads being served on your website. Your privacy policy should also include information about user options for cookie management.

I have a feeling that the vast majority of publishers do not have anything like this currently on their sites. I know I don’t. Here is what I am currently considering planning to put on my site. Feel free to use it on your own site. If you have any comments about it please let me know! I’ll try and update this post if I feel any changes are needed.

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I didn’t get as many responses as I hoped for, but here is the data from my AdSense 2007 Christmas Gift Survey. It seems like you need to be making 6 figures to be considered for the gift. This amount is much higher than I expected. Here is the data:

People who responded “No, I didn’t receive a gift” reported earning of:

1. 5,000
2. 5,000
3. 6,000
4. 11,000
5. 12,000
6. 20,000
7. 20,000
8. 23,500
9. 25,000
10. 30,000
11. 30,000
12. 45,000
13. 50,000
14. 50,000
15. 80,000
16. 85,000
17. 175,000

People who did receive a gift reported the following earnings:

1. 168,000
2. 1,500,000

I have started a survey using PollDaddy to see if I can figure out what earnings are need to receive a gift in 2007.

If you were an AdSense publisher and made at least $5,000 dollars this year, please fill out this survey. It simply asks if you received a gift, and what your estimated 2007 AdSense earnings are. Of course, all answers are anonymous. I made quite a bit more than $5,000 and didn’t receive a gift, so I’m wondering where the limit is. (The survey only allows 100 respondents, so I want to make sure that the answers aren’t all low-earning publishers saying “no”).

Take the poll

It’s getting to be the time of year when Google sends out a gift to many of their top publishers. Nobody knows for sure what amount you need to earn before you deserve a gift, but you do need to be making at least 4 figures a year.

Here is a list of the previous years presents.

2004 – AM/FM Radio with Mood Light

Turn down the lights. Turn on the mood music. Now, let the light show gently take you on a journey into 7 vibrant hues and passages of soothing relaxation. This AM/FM Radio with precision quality sound, LED technology, and rotating gravity switch helps you choose just the right mood. It even has a 60 minute timer. (from Darren Rowse’s ProBlogger)

2005 – USB Accessories

A wireless mini mouse, with scroll wheel, usb charger for mouse with retractable cord, usb 4 port hub, usb gooseneck led light, 128mb usb flash drive with wrist strap, headset with retractable cord.

Picture and description from ProBlogger again.

2006 – A Digital Photo Frame

A 960×240 screen and supports JPG images, MP3, WMA or WAV audio files and AVI movies. It also has a SD card reader for extra memory. Comes with a mini USB cable, power cord, batteries, and an international power adapter.

Picture and description from Sean Hogan’s Blog.

2007 – What’s Your Guess?

So what will the gift be this year? I hope to find out first hand!

I hadn’t seen this mentioned anywhere before (maybe I just missed it), but it looks like you can now select specific videos when setting up AdSense Video. I know this is something a lot of publishers have been asking for.

It seems like you can’t pick any video at all from YouTube, it has to be in the list of providers that they supply. This is a fairly limited list, but at least it’s a start.

There is a help page in AdSense entitled “How do I choose individual videos to play in my video units?” that gives complete instructions on how to do it. It is a little clunky right now, you have to search for the name of the provider you are interested in, find a video you are interested in and then add the name of the video to the “hints” section of the Video Ad Unit setup.

I haven’t tried this out myself yet, let me know if you have success with it.

YPN has announced a partnership with Adobe that will allow publishers to put ads in PDF files.

Publishers will be able to upload PDFs to Yahoo, and the ads will be inserted. Publishers can than email the PDFs or put them on websites. The ads will be contextual and will be displayed to the right of the content.

This is an interesting new way to display. E-Book authors have often released free e-books with affiliate links in the as a way to make money, but this allows one more monetization option. One problem I see with the ads is they are not integrated into the content area of the PDFs, so I think the Click-through-rates will be terrible.

If you are interested, you can apply for the beta. It doesn’t look like you have to have a current YPN account to apply, but like the YPN beta, only US publishers will be accepted.

According to TechCrunch, the super-hot social networking site, Facebook is getting ready to launch an AdSense competitor on Novemeber 6th. The new ad network will be called SocialAds.

What will set it apart from AdSense is that it will serve ads that are targeted according to a Facebook user profile, instead of contextually like AdSense ads are. There is no word yet on what ads they will serve to people who don’t have a Facebook user profile. An interesting option would be to allow publishers to display other ads in that case.

This could be a great new competitor for AdSense from a potentially huge company. Facebook has been valued at $15 billion and recently took about $750 in funding from Microsoft and others.

Depending on the type of person you are, this story will either make you depressed, or will motivate you. Ashley Qualls, who is 17 years old, runs a MySpace layout site targeted towards teen girls – and she earns $70,000 a month from AdSense.

Fast Company has an article about Ashley.

Some of the more interesting quotes.

At 17 going on 37 (at least), Ashley is very much an Internet professional. In the less than two years since Whateverlife took off, she has dropped out of high school, bought a house, helped launch artists such as Lily Allen, and rejected offers to buy her young company. Although Ashley was flattered to be offered $1.5 million and a car of her choice–as long as the price tag wasn’t more than $100,000–she responded, in effect, Whatever. “I don’t even have my license yet,” she says.

She has taken in more than $1 million, thanks to a now-familiar Web-friendly business model. Her MySpace page layouts are available for the bargain price of…nothing. They’re free for the taking. Her only significant source of revenue so far is advertising.

“My mom still doesn’t understand how I do it,” Ashley says. To be fair, she did go to her mother for the initial investment: $8 to register the domain name. Ashley still hasn’t spent a dime on advertising.

This is really amazing. It shows that if you find the right niche and know your audience well, just about anybody can do really well on the internet. There is no more need to have an MBA, find funding, or even have a business plan to have a very successful business.

Google’s officially approved way of doing AdSense Revenue sharing is through the AdSense API. Websites that use the API can allow it’s visitors to sign up for AdSense and create a revenue sharing program. Up until now, anybody could sign up for the program and start using the API. Starting tomorrow, however, only sites that have more than 100,000 page views a month will be able to use the API.

This means that if you have wanted to try out for the API, but have been waiting, don’t wait any longer. If you sing up today you can still use the API even if your site does not get 100,00 page views per month. The following quote is from their information page about the new minimum pageview requirements:

I have not started developing and do not meet the traffic requirements, is there anything I can do?

Run, don’t walk, to the Developer Information Form to register. If you do this before September 13, 2007, you will still be able to submit your implementation for approval, regardless of your traffic. If you do not meet the traffic requirement, you must submit your implementation for review before December 15, 2007.

There was recently a thread at DigitalPoint forums that asked the question, “Is AdSense a monopoly?”. Almost half of the people who responded to a poll thought it was a monopoly. AdSense is not a monopoly, and here’s why.

Investopedia defines a monopoly as “A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition – which often results in high prices and inferior products.” Given this definition, AdSense is clearly not a monopoly.

AdSense Does Have Competition

AdSense does have a large share of the self-service ad market, but could you say it owns “all or nearly all of the market”? A survey of the Technorati Top 100 blogs shows that AdSense is the biggest player, but doesn’t even own half of that space. AdSense appeared on 24% of the top 100 blogs, 21% had no advertising, BlogAds and Doubleclick each appeared on 15%, with other ad networks appearing on 25% of blogs. So there is clearly significant competition.

AdSense Doesn’t Have Monopoly Power

So, I’m sure there are those that will argue that the above survey is too unscientific and doesn’t count. Lets move to important part of the second part of the definition: “high prices and inferior products”. Does Google have so much power in the market that it can get away with treating publishers like crap? Hardly. It has been calculated that Google give 78% of the revenue to publishers. This is a much better cut than many advertisers give. For example ReviewMe keeps 50% of the revenue and Affiliate Network typically keep 30%. So with Google keeping a smaller percentage of revenue than many of their smaller competitors, they cannot be accused of using their market leading position to slack off. When it comes to features and innovation it is also clear that they are continuing to push the envelope. Just this year they have introduced major improvements like Video Ads and Referrals 2.0. If Google had a true monopoly there would be no need to continue to innovate.

Why Isn’t AdSense a Monopoly?

So given that Google has great brand recognition and it seems like all anybody talks when it comes to Web site monetization about is AdSense, why doesn’t it have a monopoly? Unlike the in physical world, it is difficult to maintain a monopoly in online services. For example, take Bloglines. Bloglines used to have a lions share of the online feed reader market. It was basically the dominant reader – until Google Reader took off and now has a larger market share than Bloglines. Also, take the example of MySpace. There are no arguments that it has dominated the social networking space. However Facebook is making huge inroads here. If Facebook continues to innovate and attract users like it has been, it will soon be a very real challenger to MySpace.

In the physical world large players can make it difficult to compete by very legitimate means, like getting great ecomomies of scale, or sother tactics, like setting up exclusive contracts with suppliers. In the online world, these types of competitive advantages are simply not possible. In the physical world, being bigger means you can do things efficiently, such developing large distribution networks that smaller competitors can’t match, or making sure you have a larger and better space on the supermarket shelf compared to your competitor. In the online world bigger is not really better. Anybody can get cheap, reliable hosting and compete with just a bit of time and talent. Just look at Markus Frind who run plentyoffish.com on his own and competes in the lucrative online dating service with much bigger companies like Match.com.

That is the reason that AdSense will never be able to have a true monopoly, there are so many second tier players waiting in the wings, and it’s so easy to switch to another service, that if Google ever really tries something unfair, then they will quickly lose their dominant market position. So in that sense, nobody will ever have traditional monopoly power in the online ad space.