In this journal we shall explore various facets of Google Adsense program. First, we will begin with a brief introduction to Adsense program. Then we will talk about the relation between Google Adwords and Google Adsense.
Next is to understand how adsense program works. Moreover, we will also discuss role of advertisers & publishers in this program. We shall also talk about users of Adsense and their profile.
Then we will move on to discussing how publishers, advertisers and Google itself is benefitting from this program. Next we will be looking why Advertisers and especially publishers love Adsense.
The journal would be incomplete without a discourse on competition faced by Google Adsense program. Then we will compare this program in India and USA. In addition to this, you will also come to know top beneficiaries of Adsense program in India.
Finally, we’ll conclude this journal on debating issues like lack of transparency from Google’s side, abuse of Adsense program by users and then Google’s criticism followed by future this program.
So let us begin.
What is Google Adsense?
What is Google Adsense?
It is useless to reinvent the wheel. Hence I will not give my definition as it is available on Wikipedia. So according to Wikipedia “Google AdSense is a program run by Google Inc. that allows publishers in the Google Network of content sites to serve automatic text, image, video, and rich media adverts that are targeted to site content and audience.”
I hope, the definition is quite clear but again I’ll again put across in my words.
When you go online and visit a website, you might have noticed ads showing in between the web page you’re reading. Those ads are nothing but Google Adsense ads. It is also known as contextual advertising.
Now, before we move on I should clarify meaning of certain terms that would be used again and again in this journal.
Publishers – Publishers are bloggers or website owners who create content where Google allows them to show various ads on behalf of advertisers.
Advertisers – As I pointed-out in my previous paragraph advertisers are individuals who pay an amount to Google for showing their ads on publisher’s blog or website.
In other words, you can say publishers are thousands of bloggers & web-owners who create content for money and advertisers are those business owners who want to sell or advertise their products using publisher’s blog.
Relation between Google Adwords and Google Adsense
In order to get an inner understanding of Google Adsense program we need to know Google Adwords program. A new term has been introduced here, Google Adwords.
Now, what is Google Adwords?
Google Adwords and Google Adsense are basically two sides of same coin.
By reading above paragraph you might have got some understanding of Adsense program. So, here we shall only discuss Adwords program.
Google Inc generates its 90% of the revenue from Google Adwords. All the large, medium and small size business owners would like to sell their products to customers around the world.
In order to reach targeted customers in quick time these business owners make use of Adwords program. Here, they pay Google to show their ads on either search result page or on the content of a blog (Adsense).
Therefore, Google Inc totally runs only on the money paid by these business owners.
In coming paragraph, we shall discuss about Adsense program.
It is only by reading next paragraph you’ll get a clear idea how Adwords and Adsense programs are intertwined with each other.
I will talk little bit about Adwords ads. They are of two types; one is shown on right hand side of the search engine result. You might have noticed whenever you search something; a column of ads would appear on right side of the screen. Those are adwords ads, business owners pay Google for showing those ads.
Second is contextual ads shown on the publisher’s content called nothing but Adsense.
How Google Adsense Works?
Well! It is very simple. As I explained in last paragraph, business owners would pay Google for showing ads on publisher’s website.
Google Adsense is a program designed only for bloggers, unlike Adwords which is for business owners.
Now a publisher (normally called blogger) has to apply Google for Adsense approval. If he is approved then Google would allow him to show ads on his website.
Whenever, people or visitors comes to the publisher’s website in search of good content and they click on Adsense ad then Google pays money for every Click to the publisher.
Google pays publishers from the money that it is getting from advertisers. Advertisers pay Google for each click. The money paid by Google to publishers is 68% of what advertisers pay them and rest 32% Google takes away as commission.
To put it in simple way, if an advertiser pays $100 to Google for one click on Adsense Ads by an online visitor then Google gives $68 to the owner of the website on which ads are showing (publishers) and remaining $32 Google takes away.
Thus, Google takes money from advertisers and gives large chunk of it to publishers and remaining keeps with itself.
Hence, it would be clear now, how Adwords and Adsense program are interlinked with each other.
Let us look at various ways of showing adsense ads on a website:
1. Adsense for Content: Nothing but contextual advertisement
2. Adsense of feeds: Ads will show up on feeds
3. Adsense of Search: Ads will come on search
4. Adsense for domain: Place advertisements on domain names
5. Adsense of Video: Ads on YouTube Videos
Some terminologies that are commonly used in Google Adsense are:
CPC: Cost Per Click – The amount that publishers gets when visitors clicks on the Ads. It could be from 10 cents to $2 or even more.
CTR: Click Through Rate – How many visitors click on those ads. If 100 people came to your site and only one of them clicks then CTR is 1%, if 2 clicks then CTR 3%, if 3 clicks then 4%.
Views: Total number of impression blogger receives for his blog.
Visitors: How many people came to your blog.
Eligibility & Role of Publishers and Advertisers for Adsense & Adwords Respectively
Eligibility of Publishers and Advertisers
Not every publisher gets approval for Adsense program. Early rules for getting an approval for adsense program were very relaxed but now Google has made it bit difficult.
You could read their term and conditions in details by going HERE
I would only like to add that Google wants good content from publishers.
Advertisers have nothing to do with Adsense directly. They depend on Adwords program.
Coming to Advertisers, there is no eligibility for advertisers to use Adwords programs. Only thing they need is money to bid for keywords on daily basis. Google would show ads on the top depending upon the amount of money you are ready to pay Google. Compared to other advertisers if you pay more then Google would show your ads on the top.
So the eligibility is how much you can pay to Google.
Role of Publishers and Advertisers
Role of a publisher is to create content which is unique and relevant. They need to write content which solves the problem of online visitors. Creating great content has always been a great challenge. Moreover, if publishers create good content then in return they will be rewarded by Google.
Role of advertisers is very crucial. It is only because of them Google is running. If Google does not have advertisers then there would be no Adsense program.
Prime Users of Google Adsense – Demographics
Now we will talk about users of Adsense program. As you already know, its users are also called as publishers. Who are they? What is their Demographic? How many are they? How much they earn? These are few relevant questions that anyone would like to know.
Most of these publishers are young bloggers from around the world. Their age is anywhere in between 16 yrs old to 34 years old. They are very young and they love to do things which are different from mainstream.
Majority of these bloggers come from the urban parts of a particular country. Still it is very rare to find bloggers in rural part of a country. In USA, these bloggers are mainly restricted to urban cities like NewYork, LA etc. There are bloggers in rural part of the country but they are few in numbers.
Their income differs as it depends upon the content. Usually a normal blogger makes $200 to $300 per month. A good blogger could make $800 to $1000 per month and top notch bloggers make $10,000 to $50,000 per month.
100,000 bloggers join wordpress blogging platform daily. So you can get an idea how many they are?
Bloggers are mainly individuals who create content on their own. However, there are publishers which do not blog as individuals. They have a team of writers to produce content on regular basis. In fact, they employ hundreds of content writers and editors. These publishers make 10 to 20 times more than an individual blogger.
Their monthly income could run into millions of dollars.
Some examples are
Individual Bloggers – www.problogger.net, www.labnol.org, etc
Gain for Publishers, Advertisers and Google
As I said earlier, publishers and advertisers alike benefit from Adsense program. And the Google itself is ultimate beneficiary of all this.
So, here we shall talk about their profits in greater detail.
Publishers gain a lot from Google Adsense. If we talk of small publishers which are mainly bloggers then they are able to live a decent life as a result of money that they earn monthly.
In fact, these bloggers join blogging after they have left their regular 9 to 5 job. They have so much confidence that after leaving their regular job they could make enough money for living. Moreover, there are individuals who begin their career as a blogger. It means, after graduation or high school they do not opt for a job but starts blogging.
Now, if we come to big publishers even they are gaining everything from Google Adsense. Apart for money that they make in millions every month, they are also able to build a brand of their own company.
With a solid brand these companies are able to reach-out their customers in an efficient manner.
Like publishers even advertisers benefit. The proof is that entire Adsense program runs on the advertiser’s money and publishers & Google itself earns from their money.
Hence, advertisers would only pour so much money if they get something out of it. Therefore, small business owners also benefit by selling their products to customers online.
Earlier, a small business owner was not able to reach out their customer’s, now with help of Adwords they could reach out to them very quickly.
Finally, Google also benefits by taking 32% share from the amount paid by advertisers. Google sits between advertisers and publishers, so basically it takes away the 32% revenue in commission.
Thus Google is not just benefitting but generating hell lot of revenue from both programs Adwords as well adsense.
All three, publishers, advertisers and Google gain from Adsense.
Other Competitors of Google Adsense Program or Alternatives for Adsense
Well! Google Adsense is not just one program when it comes to contextual advertisements. Adsense program is one of them.
So the question arises does Adsense faces competition from other programs in the market? The answer is yes, it does face some kind of competition from other contextual advertisement platforms.
Publishers and advertisers not always go for Adsense, at times they might give a try for other programs as well.
Some of the other programs on the line of Adsense are the following:
7. Amazon Associates
8. Tribal Fusion etc
You can search more about them in Google.
There are other ways of advertising like
1. Text Link Ads – You are paid for creating a link.
2. Infolinks – Here also you get money for creating a link that shows ads.
These programs may give a competition to Google Adsense. But it can be alternatives for publishers and advertisers both.
If publishers and advertisers for some reason do NOT like Adsense then they could try one of these programs mentioned above.
Hence, these programs give competition to Adsense but for publishers and advertisers they could be an alternative.
Why Google Adsense is the first choice for Publishers or Bloggers?
As we discussed Google faces stiff competition from other advertiser’s platform in the market. But even then Google Adsense is the first choice for bloggers.
So why publishers go only for Adsense program?
The first answer would be Google is the king on the Internet. Google dominates every other search network.
Therefore, Google enjoys an ultimate authority. So, publishers or bloggers trust Google blindly.
Moreover, Google adsense program is very easy to use and Google extends all its support that it can offer. If you have any doubt or problem related to putting ads or payments then you could reach Google without hesitation.
Google is always ready to help you.
Google now also allows placing other third party ads on your website, alternatives that we talked in last paragraph. Publishers can place ads from other programs along with Adsense ads and make more money.
In order to cut down the competition that Google faces from other platforms Google now allows ads from third party, earlier it was not allowed.
Google wants to ensure that publishers do not migrate to other platforms.
But the best part of Google that publishers like is Google are the best paymasters. Google delivers what it says. You get same amount that you earn on right time. So the pay check always reaches your home-address on-time.
Hence, these are few reasons why Adsense program is still preferred by bloggers to a large extent.
How Advertisers See Google Adsense Program?
Although advertisers do not have anything directly to do with Adsense but still this program affects them.
As we know Adsense and Adwords are interrelated. Advertiser will only benefit when his ads are placed on good content and we know content is always created by publishers.
Google has to place advertiser’s ads on the most relevant content so that an advertiser gets most out of it.
So an advertiser would always be interested how good publishers are creating content. If publishers are paid well from the side of Google then they would create good content eventually good content would help the advertiser’s business to grow.
Google Adsense in Asia and USA – A Comparison
Now we shall compare Google Adsense program in USA with Asia. How do publishers in Asia differ from their counterparts in USA? Is there any real difference?
Yes, there is a difference being publisher in Asia compared to USA. The first difference is the profit margins. In USA, publishers make 2 to 3 times more income than a publisher in Asia.
The cost per click (CPC) in USA is 4 times more than in Asia. For a click in USA you get $1 and in Asia a blogger gets only 20 cents. So blogger in USA makes more money even though the traffic or visitors coming to there blog is less than traffic coming in Asia.
Again the reason is simple in USA advertisers are willing to pay more. There an advertiser could be willing to pay $2 to Google for a click then publisher gets $1.36 and Google gets remaining.
But in Asia, advertisers pay only few rupees for a click. So the CPC is as less as 5 cents or 10 cents.
After all, USA is a developed economy so advertisers have more money to spend but Asia is still a growing economy so advertisers spend very less amount.
Hence, this is the big difference between adsense users in USA and in Asia.
Top Successful Beneficiary of Google Adsense Program in USA
Let us meet some successful Google Adsense publishers in USA. They have become almost like an Internet celebrity. They could be inspiration for other bloggers around the world.
1. Arianna huffington – She was running the number one in USA Huffington Post. Now her post is owned by AOL. But she is a pioneer.
2. Micheal Arrington – He owns techcrunch.com. His income also runs into million dollars a month.
3. Pete Cashmore – He is owner of mashable.com and makes around $1 million dollar a month.
4. Om Malik- He runs the blog gigaom.com. Another successful blogger.
5. Seth Godin – His blog is sethgodin.typepad.com. There are many more like these bloggers.
All these guys make millions of dollars every month.
Lack of Transparency from the Side of Google
We discussed good things about Google Adsense. But there is a flipside of this program. You could say a doubt that arises in every publisher’s mind.
Although Google openly declares that it gives 68% to publishers of what advertisers pay them and takes 32%. But Google do not tell how much advertiser is actually paying them for a Click.
Publishers really do not know how much advertisers actually paid to Google.
Google could be paying publishers less because it does not declares the money paid by advertisers.
For example, an advertiser is paying $5 for a Click to Google, so with an honest intention Google should pay $3.40 for a click to publisher and take only $1.60 with itself.
But it can happen that Google only pay less than $3.40 say $2.00 to publishers, hence taking away another $1.40.
The reason for this suspicion is because Google does not declare that advertiser actually paid it $5.
Therefore, this lack of transparency gives rise to suspicion. This could be flipside of Adsense program.
Abuse of Google Adsense
There are frivolous bloggers who abuse Adsense program from around the world. Out of shear greed they start clicking on their own ads.
It is so naïve to even think that a blogger could make money by clicking his ads. Google will come to know the blogger and terminate his adsense account forever.
Google is very strict when it comes to showing ads. Publishers can only show 3 ads on their page. If they try to click on those ads or telling others to click then Google will consider it illegal and terminate your account permanently.
Using software and tailored content to show Adsense ads is also banned by Google but frivolous bloggers use such tricks and end up on the wrong side.
Criticism of Google Adsense
Google is criticized by many publishers from Asia for not paying them as much as it pays to publishers in USA.
Then bloggers criticized Google for banning their account for no specific reason.
Sometimes Google terminates their account without paying the threshold income of $100.
Google is also criticized for showing sexually explicit ads on websites.
But the most genuine criticism of Google Adsense is the lack of transparency that we discussed in last-to-last paragraph.
Future of Google Adsense Program and its Affect on Publishers
Finally, we shall talk about the future of Adsense program and how it affects publishers.
According to me, future of Adsense is great in USA and outside USA. As internet is growing more and more people are joining it. They are in search of good content that they could read.
Hence Adsense program will ensure that publishers create quality content because they would get right remuneration.
Moreover, Google’s revenue totally depends upon advertisers and to make them happy, Google needs to show their contextual ads on good content. So Google needs adsense platform in order to do that.
Hence Adsense program is very essential for its own survival.
So, the future of Adsense is very bright for publishers as well as adsense itself.
Thus, we conclude a concise but power-packed analysis of Google Adsense program.
We will be updating this blog-post continuously so keep coming back for the latest information.