AdMoolah News and Views

Yahoo! today announced to its publishers and advertisers that it has introduced “Quality Based Pricing”. This seems like it is very similar to Google’s Smart Pricing.

From the Quality Based Pricing FAQ:

What is quality-based pricing?

As part of the evolution of the Yahoo Search Marketing advertising system, we now include an assessment of the quality of our publisher’s traffic when you are charged for a click from that source. Depending on the quality of the traffic from the partner or publisher where the click came from, the cost of your click can be automatically discounted by a certain percentage.

This means that many publishers will see the amount they earn on each click go down. The initial impact may be limited because Yahoo is introducing it to a limited set of keywords, but the number of keywords effected will increase over time.

There are constant complaints about smart pricing in AdSense forums, I have a feeling we will start seeing similar complaints on the YPN forums as well.

I have an Smart Pricing FAQ that tries to explain Smart pricing as much as possible.

It’s been so long since I’ve heard any news of Microsoft’s potential competitor that I had almost given up hope for it.

But John Battelle, had some interesting words to say about the Microsoft/aQuantive deal:

I did have a very interesting talk today with Yusef Mehdi, who ran the aQuantive deal for Microsoft, and Brian McAndrews, the CEO of aQuantive. What struck me most was the commitment to have a solution that counters AdSense, but with a richer suite of services for both publishers and advertisers. Microsoft is really committed to this business, but they have work to do to productize and integrate this acquisition. More soon.

That’s promising.

JenSense is reporting that Google is disabling arbitrage publisher accounts as of June 1st. Some publisher are getting emails stating that they have a business model that is not a good fit for AdSense, and their accounts would be disable. The publishers will get to keep any money they make before June 1st.

One thing that is not 100% clear is what exactly determined which accounts got the emails. Reading a thread at Webmaster World, which includes comments from many webmaster who received the email, it is not clear what the exact problem was. Were they banned strictly for doing arbitrage, or was it because it they had MFAs (Made-For-AdSense websites)?

My personal opinion is that Google is cracking down on accounts that have sites which provide a bad user experience. We all know those websites that have very little content and the ads are the only obvious way to leave the site. Kim Malone has already stated that Google does not like these sites. This is from a Search Engine Watch article:

Kim Malone, Director of Online Sales & Operations for Google, gave the generic search engine response. “We’re interested in a positive user experience,” she said. She did share, however, that misleading users is not acceptable. For example, you cannot offer something for sale in a PPC ad and then direct consumers to a landing page full of ads instead.

Google has nothing against arbitrage itself. It is possible to do arbitrage, and still supply a good user experience. I have a site where 25% of my traffic comes from AdWords. Almost all the income from this site is from AdSense. But, I know this is a good user experience because users who get to my site from AdWords spend an average of over 5 minutes at the site reading an average of 10 pages each. All the content is unique and relevant to the ads that I display. Google’s AdWords system also recognizes the quality of the user experience, because most of my keywords rank a “Great” quality score. The quality scores measures the relevance of you page content to the keywords you use for your AdWords ads. This great quality score allows me to keep my bid prices very low. The high page count per user at my site means I don’t need a huge CTR on each page to make a profit. For example, if I pay 5 cents per click on my ads, and I have a page CTR of 3.33%, and my pages per visitor is 10, I only need to make 15 cents per click to break even. Add to that the fact that the user has had a good experience at my site and is likely to come back and recommend it to others, I am way ahead. I don’t think Google would complain about this type of arbitrage.

I think one source of confusion is that many people equate arbitrage and MFAs. This is because almost all MFAs engage in arbitrage, and most arbitrageurs use MFAs site. But, as I have shown above, it is possible to do arbitrage in a way that provides users with a positive experience.

The other question is whether or not this will be good or bad for publishers. There are a few factors at work here.

First, Google’s disabling of many MFA arbitrageurs accounts means there are going to be fewer AdWords advertisers as well. Fewer advertisers means less competition, and lower click prices. That’s bad for publishers.

Next, eliminating MFAs from the AdWords advertising pool and making the user’s experience better means people may be more likely to click on ads in the future. If someone has an experience where they click an ad and are led to a spammy page with more ads, they are less likely to click on ads in the future. That’s good for publishers.

Finally, some advertisers do not use the content network because they do not want their ads to appear on MFAs. Banning MFAs from the system will mean more advertisers are willing to use the content network in the future. That’s good for publishers.

So, I think there may be a slight, initial dip in publishers earning as the MFA arbitrageurs leave, but in long run I think things will even out.

Update: Shoemoney has a video on the subject. He says many big time arbitrageurs have not been kicked out of AdSense.

Autopilot Moneymakers are programs that make it very easy to earn money on your website. Sign up for the program – cut and paste some code, and your done. Sure, there are sometimes ways to make more money – direct sales and affiliate programs, for example – but they take significant effort to sell properly. Webmasters and bloggers love autopilot moneymakers because they don’t have to put a lot of effort into getting revenue, they can concentrate on making better websites.

The five programs listed below are among the favorites of bloggers and webmasters, they are the proven money makers. (Most of the links are affiliate links.)

AdSense

This is the best known program of its type. It’s ubiquitous on the web and is often the first program considered for new sites. It works well on a large variety of sites. AdSense has options for CPM (payment per impression), PPC (Pay-Per-Click) and PPA (Pay-Per-Action).

Yahoo! Publisher Network

Yahoo! Publisher Network is Yahoo’s attempt to catch up to Google in advertising on third party websites. it is currently in beta and limited to US publishers. Many webmasters report targeting issues, but many also report earning that are far better than they got with AdSense. It is worth giving a try to see if it works in your niche. YPN uses PPC ads.

Check out Yahoo! Publisher Network

Chitika

Chitika ads are interactive widgets that display keyword targeted merchandise for sale. They work very well for websites that are geared toward some specific consumer product. Chitika uses the PPC method for payouts.

Chitika Overview

AuctionAds

AuctionAds is a relatively new network, but there have been a lot of good reports about them. They display EBay ads that are targeted to the content on your website. Like Chitika, they are good for websites focus on consumer goods. Auction ads uses CPA.

AuctionAds Homepage

Text Link Ads

Text Link Ads are a little different from the other programs on this list in that they don’t display full ads that pay per impression, click or action. You insert Javascript on your site and advertisers can purchase a simple text link on a monthly basis. This makes Text Link Ads a good compliment to other ad programs.

Go to Text Link Ads

This post is part of ProBlogger’s Top 5 Group Writing Project

Google has started beta testing what have been dubbed “Gadget Ads”. These are AdSense ads that go beyond text or image ads. Gadget ads are widgets that advertisers can create. Widgets are like mini-applications that can run on a publishers site. The idea is that the ads will be much more interesting and engaging that standard ads.

To get an idea what gadgets ads will look like, you can take a look at Google’s Gadget page. Now imagine what an advertiser could do with this type of interactivity. There could be some interesting and creative ads built with this technology.

These ads will come in standard AdSense sizes, and will be available on a CPM or CPC basis. Like usual, there is no word on when these would become available to all publishers.

Even though Google is the clear leader in online advertising, it is great to see them always innovating and trying new things. More options for publishers means more revenue possibilities for publishers.

Found on Niall Kennedy’s blog.

Google just posted an entry on the Inside AdSense blog about avoiding accidental clicks. They warn against placing ads close to interactive elements on your website.

Some implementations that could lead to accidental clicks include placing your ads:

- In close proximity to Macromedia Flash games
- Under pop-ups or download prompts
- Near site navigation controls on your pages, such as drop-downs or menu links

This looks like another issue that is going to cause a lot of confusion and concern amongst publishers. It also goes directly against the advice Google gives about optimization: “Ads placed near rich content and navigational aids usually do well because users are focused on those areas of a page.” So which is it? Do we place ads near navigation or not?

I can understand where Google is coming from with this. If you make it difficult to click on something on your site because it is so close to an ad, that could bring accidental clicks. But, this latest warning just seems way to vague.

This will be similar to the “Don’t place images besides ads” policy that has created so much confusion in the past. I’m sure there will be a lot of complaining in he forums about this one. My advice is to do what is reasonable – as long as you aren’t trying to trick your visitors, things should be OK.

Ask.com announced that it is going to be launching a new contextual advertising network that seems very similar to AdSense or YPN. The contextual network will be initially restricted IAC’s (who owns Ask.com) web sites such as CitySearch, Match.com and Ticketmaster. As soon as next quarter, though, they will open up the network to third party publishers.

Search Engine Land has some additional details that sound interesting:

The publishers will have two unique features that are not currently available in the Google AdSense and Yahoo Publisher Network. Publishers will be able to set “page yield thresholds” and set “relevancy thresholds.” There will be levers to allow publisher to determine if they want higher paying ads or if they want more relevant ads with these levers.

That sounds like a great opportunity for publisher who want more control. It also seems that publishers will have more control over the look of the ads than is currently possible in AdSense or YPN. Publishers will be able to control “background color, font, layout, graphics”.

Overall, this sounds very promising. The promise of more control over the ads will be very appealing to many publishers who often gripe about the lack of control in AdSense. And , as always, more competition in this space is always good for publishers.

Google has announced the beta of a new AdSense referral program. They have announcements for the beta test from both the publisher and advertiser side of things.

The program allows advertisers to offer publishers a pay-per-action model. This is more like an affiliate program, publishers only get paid when a visitor you refer actually takes some action such as signing up for a newsletter or purchasing a product.

This program takes Google a step beyond what their competition, like YPN and MSN adCenter is doing, and puts them in direct competition with companies like Commission Junction. It will be interesting to see how the competition reacts.

Right now it looks like publisher need to select individual ads to be displayed on their site. I would guess that at some point Google will combine the contextual aspect of their AdSense ads with the referral program and allow ads to be automatically selected for publishers. This is the approach that companies like Turn.com and AuctionAds are taking. Update: I found out Google does allow you to select a keyword, and Google will automatically rotate through a variety of ads for that keyword.

You can sign up for the beta as a publisher, or as an advertiser. I have signed-up. If I get accepted and find out more details, I’ll be sure to let you know.

There have been reports of Google testing a large variety of different ad formats over the last month or so. I’m sure they are testing these to see which ads get the best click through rates and the best conversion rates. Even though Google is the leader in the online advertising space, it’s good to see them still trying different things to tweak the system. This makes it better for both advertisers ad publishers.

Here is a summary of their recent experiments. I’m sure there are more of them out there too.

New Google Logo tests. Google has been experimenting with different logos on the ads for a while, this is the latest incarnation. From SEO Roundtable

This is a tabbed ad. Lot’s of potential here to do all sorts of interesting things. These kind of remind me of Chitika ads that are tabbed. See more screen shots at Stanley Shilov’s Blog.

This is being called a Horizontal Image ad. Similar Vertical Image Ads have been spotted in the past as well.

AdSense ads where the headline text is in italics have also been spotted. This is a pretty subtle change, but I’m sure Google can pick up even the smallest change in the CTR between ads.

This is also a good lesson for publishers: keep experimenting. If Google is still experimenting with ads after all these years, publishers should be doing the same thing. Try different ad and affiliate programs, try different colors, formats and placements. You can never be sure that you have the best combination for your site.

Students in an Iowa State University statistics class recently used data from AdMoolah in a group project. Hadley Wickham, who teaches Statistics 480, had the students collect data and then attempt to answer questions based on the data. Two of these papers have been published on the page outline the requirements for the project.

Some of the students had some interesting questions and conclusions.

One paper attempted to answer the question: “Is there a difference in earnings between categories, sub-categories, language and page view/page rank?” The conclusion reached was:

The analysis of the Google AdSense data resulted in more questions than answers. The main dependent variable used in the majority of the sectional analysis was average earnings. Earnings were found to be dependent upon seasonal effects (through quarter of year)and upon assigned PageRank score of the website. Increased earnings could also be captured if a website was published in either English or Danish languages.

Read the full paper here.

A second paper also had some interesting analysis. My favorite part of this one was an analysis of how more page views per visitor effects results. They found “a negative relationship between the number of times the page is viewed and the amount of earnings”. That is, having more page views makes your average eCPM go down.

Read the full paper here.

I think this project was a great idea. These are the kinds of questions I had in mind when I started AdMoolah, and these student did a good job of providing some rigorous analysis of the data. I’d like to thank Hadley Wickham and all his students for the work they put into this.