AdMoolah News and Views

I finally got around to updating my AdSense Revenue Sharing Site List. It had been over two years since I updated it, so it was getting pretty stale.

When I began editing it, the list had 48 sites on it. I removed 22 sites that were either gone or had removed the revenue sharing from the site. I added in 14 new ones, so there are now 40 sites on the list. I’m sure there are more out there, so feel free to send me any new ones you know about. Hopefully it won’t tale me two years to update it this time.

One new wrinkle I discovered for some sites are affiliate programs. You can sign up as an affiliate and when someone signs up underneath you, you get your own ads displayed on any pages your referrals create.

WordPress has released version 2.6.5. If you you WordPress, Since the latest version includes a security fix, I highly recommend you upgrade now.

I have started upgrading my sites, and have not found any problems yet.

I often see advice in forums telling people not to use AdWords to drive traffic to a site that uses AdSense. For example, today, this threadd at DigitalPoint forums, which asks “Will I get banned if use adwords on my site with adsense?”. One person advises:

using adwords to get traffic to an adsense optimized site IS called Arbitrage which google doesn’t like. i would not suggest it

I also found this advice in another thread at DigitalPoint:

Hey, thats againt TOS. You cannot send Adwords traffic to Adsense Sites.

Obviously there is a strong belief out there that Google frowns upon using AdWords to drive traffic to an AdSense site. The fact is that Google does not mind you using AdWords to send traffic to your AdSense site. Look at this post at Google’s official AdSense blog. In it they say

We’d like to share some of Peter’s insights with you about monetising his sites with AdSense and his experience using AdWords to attract visitors.

Clearly if Google is sharing stories about an AdSense publisher using AdWords, they do not frown upon this practice.

There is one thing that Google will ban your AdSense account for, however. They do not like it when you use AdWords to send traffic to a low quality site that displays AdSense. These types of sites are frequently referred to as MFAs (Made For AdSense). This is what Google had to say about this:

This new policy requirement doesn’t mean that you can’t use online advertising; it simply means that if you do, you need to be sure that the way you advertise meets with the guidelines, whether it’s through AdWords or through any other advertising program.

So how do you know what Google considers a “quality” site. You can read all about it at Google’s Landing Page and Site Quality Guidelines. The quality guidelines boil down to three things:

1. Original Content – Make sure the content is original and is relevant to any advertising you do.
2. Transparency – Make sure: your visitors know who there dealing with; don’t mess with their browsers or automatically download software; and have a clear privacy statement.
3. Navigation – Make sure you site is easy to navigate and doesn’t force them to click on ads to get away from you site.

Basically if you have a real website that you built for users, you will have no problems advertising with AdWords and keeping you AdSense account safe.

When I launched my first website, it was an immediate success. It was on the first page of Google SERPs for the terms I thought it would, and it quickly shot up to a Page Rank 6. Was this because I was a skilled SEO? Not at all. I didn’t even no what the terms SEO and Page Rank meant. The first time someone pointed out that my site had a Page Rank of 6, I had to ask what that even was.

Why was this site so successful? I built a site that was actually informative and useful for people. I put a lot of hard work into building the content of the site and asked a lot of people for feedback. People liked the site so they linked to it. It quickly became an authority site in the eyes of Google.

I firmly believe that the best way to get traffic to a site is to have content that people actually want to see.

Does this mean that I think that SEO is useless? No, I think it has its place. If you are writing an article for your pet site about fantastic large dog breeds you might want to do a bit of keyword research. If your article was originally titled “Great Large Dog Breeds” and you do a bit of research and find that people actually search for “Best Large Dog Breed” a lot more than they search for “Great Large Dog Breeds” you may want to re-title your article. You also want to do things like make sure your site is easily spiderable by search engine robots.

My point is that when you originally conceive of a site you shouldn’t be thinking, “What will be a killer site for search engines?”, you should be asking “What will be a killer site for my visitors?”.

Back in February at Affiliate Summit West Jason Calacanis made some comments during his keynote that I’ve been thinking about lately. He seemed to think that people were wasting their time earning $100,000 a month in affiliate earnings and they should go out to create companies that they could sell for tens of millions of dollars.

I think Jason’s comments were probably more to get a reaction then a well thought out statement. I think there are some real differences between a “make money online” home based business and being a entrepreneur and doing a “real” start-up.

I think I have a pretty good perspective on this, I have co-founded a software product company, worked at several small companies, and am doing the whole home based “make money online” thing as well.

Here are several reasons why people might want to do one of these over the other.

1. Different Skill Sets. Building websites, doing SEO and running PPC campaigns takes a very different skill set than trying to organize a company, manage employees and raise funding. Presenting a PowerPoint slide to a VC is not the same as using keyword tools to come up with those winning long tail terms. Although being a “people person” can help with a home based business it is possible to get into it and make money without ever talking to a real person, but you can’t be a hermit and have employees and raise money from investors.
2. Different Lifestyle Choices. Running a startup usually means long hours, being responsible for other co-founders and employees and worrying about meeting revenue targets for investors. Running a start-up involves a lot of moving parts, and if you are the CEO, you need to make sure each one of those parts is functioning. (For example Jason Calacanis was fixing the air-conditioning at Mahalo today.) Although a start-up can have a relaxed atmosphere with no dress-code and free soda, it doesn’t compare with shuffling to your home office in the morning in your bathrobe and slippers to check the latest stats on you site, and than deciding to go skiing that day. I’m not saying the home business route is easy, but it is a lot more flexible then a lot of other choices.
3. Life Goals. To some people sitting around at home in their pajamas making a lot of money would not be very satisfying. There are those who would like to build something of substance that they could be proud of. If you start a company that you can sell for tens of millions of dollars you have something you can point to in your life and say “I did that.”

If I believed in things like personality types I would say that running a start-up is for type-As while working at home is for Type-Bs.

4. Different Risk Levels. When you start a home based business you can start expecting to get some money rolling in within a few months. When you found a start-up, you know it could be a long time before you can attract enough investment money to give yourself a salary. If you don’t have a good bank-roll, you could go hungry a few months into your start-up. If it flops you have nothing to show for it and you have to start from scratch. When you start a home based internet business you can have some reasonable expectation to make some money with enough hard work. And even if it doesn’t really take off you will have a small cash-flow going.

That being said I think there are some similarities between starting up a company and starting a home based business.

1. Need for IndependenceMost of the people who start home business or start-up companies aren’t satisfied working for someone else. They have their own ideas and want to see if they can make it on their own.
2. Self Discipline This is the flip-side of the last point. Now that you are out on your own and don’t have anyone telling you what to do, you need to get yourself to do things. If you’re not self-disciplined enough to put in enough work, no business that you start will succeed.

Of course, I think this is a bit of an artificial distinction between home-based businesses and “real” start ups. I look at people like Jeremy Schoemaker and Darren Rowse, who seem to be straddling the line between these two worlds.

Lately I’ve been thinking about the different strategies individuals use to make money purely online. By individuals I mean someone working alone (or maybe with a partner) who hasn’t gotten any funding, typically works from home and has no desire to build up a large company with employees. These strategies are also purely online, so selling items on EBay isn’t included since it involves physical goods. Here are the different strategies I have come up with.

1. Content Site Publishing. Building websites and writing blogs. Usually this involves make money from a combination of CPC networks like AdSense, affiliate programs and direct ad sales. Another monetization strategy for content sites is subscriptions. Often this starts by building a site for fun and then realizing that the site can be monetized. Darren Rowse (ProBlogger) is a good example of someone who uses this strategy with CPC networks. Jeremy Schoemaker (Shoemoney) is someone who has had success with subscription sites. John Chow is someone who has done well with direct sales and affiliate programs. I also put myself in this category with CPC and affiliate programs.
2. Paid Search Marketing. The goal here run massive PPC campaigns on networks like AdWords and Yahoo Search Marketing to drive traffic to landing pages. Affiliate programs are used almost exclusively for this strategy. Amit Mehta is a well known PPC Marketer.
3. Email List Marketing. Some online marketers build up huge email lists and then sell informational products (i.e. ebooks) through messages to the email lists. Almost any AdSense “Guru” uses this strategy. Examples are Joel Comm (AdSense Secrets Revealed) and Mike Filsaime (Butterfly Marketing)
4. Arbitrage. The strategy here is to but PPC traffic for relatively cheap and then send the traffic to sites that have a ads with good CPC on them. I can’t point to examples of people who use this strategy as they tend fly under the radar.
5. MFA Spammers. MFA is Made For AdSense. The idea here is to make pages having little content, or creating content by scraping other sites. You then place CPC ads on the page and drive traffic to them. Since there is little content on the site, people end up clicking the ads. This strategy is getting harder to do since Google has been cracking down on these types of sites. Again, most people who use this strategy aren’t willing to admit it because it is seen as unethical.

Of course many people use more than one of these strategies to varying degrees of success.

I’d love to hear your feedback. Which strategies do you use? Am I missing any major strategies?

I’ve decided to start using Twitter. I’m so far behind the curve on this that there are some people, like Hugh McLeod, are even burnt out on Twitter. There is also someone selling their Twitter account on EBay right now. The current bid is $465. The auction is set to end April 22nd.

I thought I’d see what all the fuss is about so I’m starting to Twitter. You can follow me at: http://twitter.com/tlainevool . I’m going to try to keep the tweets more aimed at online/tech things more than what-I-had-for-lunch type posts, but this whole thing is an experiment so we’ll see how it goes.

I finally got around to doing some much needed maintenance on this blog.

First switched hosts. (I highly recommend DreamHost, use this link and promo code ADMOOLAH50 to save $50. Yes that’s an affiliate link.) I used to have this site on an individual hosting plan that was costing me about $30 a year, which was way too much. The old host was also less reliable (lots of downtime) and slower.

I also upgraded to WordPress 2.5, and so far I like the changes. I know I should always keep up with the latest version of WordPress, but it usually takes me a while to get around to it. It really is pretty easy upgrading and only takes a few minutes, so I should do it more often.

I have also been neglecting this blog as far as posting goes, but I hope to change that as well. I’ve had a little change in job situations which should give me more time to blog here, and more importantly will give me more time to devote to the sites that actually make money for me.

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.

I blogged about a new AdSense Sites feature yesterday, but after i posted, they yenaked the new feature off of the control panel. I wasn’t sure what was going on, but now it seems like they were probably having problems with it, and decided to roll the new feature back. They will be pushing the new feature out as soon as they have things fixed again. Here is what AdSenseAdvisor (the official AdSense spokesperson on forums) had to say about it:

Hi everyone,

Sorry for the delayed update – I’ve been trying to find out as much as I could about this situation in order to make sure I passed along accurate information to all of you.

We’re very happy you’re all so excited about the new Allowed Sites feature. Unfortunately, we had to temporarily roll back its release, but expect to see it in your accounts again soon. We hope that it helps alleviate many of the concerns publishers have had about code theft and click sabotage.

In the meantime, our engineers have confirmed that we deactivated any settings you made yesterday, so your ads will continue to monetize as normal on all sites.

Again, we’re sorry for the inconvenience and confusion, and appreciate your patience.

-ASA

I’ll be sure to update things as more information becomes available.

Here is another update from AdSenseAdvisor

ann, if you (or anyone else) are seeing strange AdSense performance that seems to correlate with this Allowed Sites release and withdrawl, you’re welcome to PM me your pub ID or account login and a description of the behavior, and I’ll be more than happy to escalate it to our engineers for investigation.

We want to make sure this temporary release didn’t leave any weird loose ends…

-ASA