Is the Ad Revenue Model for Website Income a Dead Concept?
As I continue to scratch my head at the near-worthlessness of website advertising, I honestly wonder if the saturation of crap has killed the ad revenue model as we (or maybe just I) know it. I’d like to share some thoughts on the subject and would love to hear what you guys are experiencing out there.
I’ve been running P2L for 4 years now and I’ve been using AdSense pretty much from day 1, so while I don’t pretend to be an AdSense guru, I think I’m qualified to speak on behalf of the average Joe in terms of trends and such. I’ve also dealt with over a dozen major networks and have tried all sorts of cheats and tricks… some worked, some were bogus and I really want to know if this is something everyone is experiencing. When I first started to use AdSense on P2L, the site had at least half the traffic it currently brings in, yet ad earnings were quadruple what they bring in now. In fact, the ad revenue is so worthless, that I don’t think it’s even worth it to clutter up my sites with them for the price they fetch.
Not only that, but the only new visual improvement AdSense has made to their ad format in 5 years is the ability to have rounded corners! The complete lack of ad variety and customization has subconsciously programmed any average web surfer to completely ignore these ads. You don’t even think about it, you naturally ignore AdSense ads… AdSense is battling every possible trick to avoid unintentional clicks, but to be quite frank, that’s the only way anyone clicks on an ad in the first place. Granted you do get the nice folks that click your ads to help support your site, but they are few and far between and getting a visitor that clicked an ad out of genuine interest because they actually read the ad is even more rare.
Want proof?
For 1 day, I ran a bogus AdSense ad on the front page of P2L that looked exactly like an ad unit. The ad said “Contact P2L if you see this and get $100” and I linked it to the contact page. I had tens of thousands of impressions of the ad and about 200 clicks. Not a single person sent an email for the $100. No one reads the ads…
My point is that after all these years and the billions Google has raked in with their cash cow, why the hell can we STILL not have underline removed on titles and have a transparent BG on the ads?
AdSense also suffers from the same fate as all the other ad networks out there… if your site isn’t used by a US majority, your ad revenue sucks. I don’t think it’s a big secret that ad networks cater primarily to the US market, and while many networks will serve to international markets, the earnings on those international clicks or impressions are dismal at best and quite often non-existent. In fact, when Chitika first started up, they didn’t even tell publishers that while their reports would show AND count international clicks, final payouts would be for US ONLY. What a shit storm that created when the first paydays came around.
And this situation only gets WORSE! As everyone and their monkeys are signing up and using or forming ad networks, premium publishers are losing their value and advertisers know it. PPC style campaigns can be run for pennies in premium markets if you know what you’re doing… a couple of years ago this was impossible. A secondary reason for the rate drops is the ridiculous volumes of click fraud the networks have to deal with from these garbage turn-key style “AdSense Ready” sites. When Advertisers and their networks lose money, you can bet it has to come out of SOMEONE’S pocket, and it won’t be theirs.
And again, this is not just restricted to AdSense… Yahoo, Miva, Clicksor, Clickbank, Fastclick and all the rest of the big networks are all dropping and it is become increasingly difficult to run on a ad based revenue model as your sole income unless your site brings in HORDES of traffic, I’m talking millions of uniques a month. Not too long ago, I remember reading an article a couple of years ago (and agreeing) that a site with 2000 visitors a day can start monetizing with ads and expect to earn some decent revenue. Not something you could call “full-time salary” matching, but still a nice little stash at the end of the month. Now I’d say anything less than 10k a day is a waste of time unless you’re serving up a high paying keywords niche such as airline tickets and other high paying areas. But let’s face it, if you’re reading this blog, you’re probably in the graphics arts or programming field and you’re not really in the mood to learn all about air travel or the latest Cancer research to start and maintain a high paying keyword website on the subject.
And to top it all off, the realm of tutorials and graphic design type sites are known as very low converting sites with poor advertising ROI, so guys like me who run large tutorial type sites are really trying to scrape the barrel. And I’ve run tons of tests on my own site, so I know just how badly some ads will convert… I’ve run campaigns of my own that rang in 20,000 clicks and converted in to maybe 10 sales. That’s pretty damn sad… but then again I’ve had clients advertise on P2L that told me they came in with 500% ROI, which is AWESOME!
The bottom line from my point of view is this: People come to P2L for FREE tutorials and free content, they are not coming to buy stuff. It is very hard to convert on people that are coming for free content. Now if we look at my little hobby model kit site at www.predatorstuff.com, this site only brings in a FRACTION of the traffic P2L pulls in, yet it makes 10 times more money. Why? Because people that come to Predstuff are looking for stuff to buy, so they are a buying market and it’s easy to convert potential customers to completed sales.
And that brings us to the all important question… With P2L v5 in development, how do I bring it back to profitability and make it worth running? I love running P2L and all, but let’s be honest… I wouldn’t be working on it day in and day out if it didn’t pay off. I need to make a living and I can’t afford to spend fulltime hours on ANYTHING that doesn’t yield some decent financial returns, and to be quite frank, right now P2L is a money pit. In fact, in the last 2 months, P2L has cost more than it earned and I am now investing quite a bit in this new version.
In fact, I think it’s safe to say that v5 will be my last push in to making P2L return to profitability and taking it to the next level in terms of traffic and overall performance. The site has been huge, but has been really idle to me for months. I’m not happy with it, but I don’t think there’s much that can be done to it’s current framework to improve it. But let me tell you that this new version will see a HUGE push by me and our staff to bring us back in to the light of the tutorial community and we’re going to be bringing you some genuine new concepts, as opposed to stuff P2L already has and just changing the way it looks. We will of course be making improvements on what’s currently available, but we have 2 or 3 completely new goodies that I think will be a very tough act to follow and quite unique to our community. I’m not saying no other site does what we’re bringing to you, but I think it will be a first for a tutorial portal site like us.
And with these changes, I am hoping that we are able to at least double our current traffic and with that, some basic CPM ads should be enough to make the site worthwhile and fund our new initiatives. This is my hope until we can identify a niche market where we can offer our own branded product and move away from the volatile ad revenue model.
But I really have to scratch my head and ask how some of the smaller sites are handling this… granted a small site doesn’t cost $500 a month just in server fees, but I’m sure it still sucks to write tutorials for 50 hours a week and then count your revenue in pennies. I mean, you could have spent those 50 hours collecting glass bottles and probably made more. I understand that there should still be the love of running a site and we shouldn’t always think of “how is this going to make me money”, but let’s be realistic… You’re going to have a hard time convincing yourself (not to mention your significant other) that working on a website for 40+ hours a week for months and years when you have a house and kids with nothing to show for it is justified.
Well that’s it for tonight folks, time for bed! I would really love to hear from you guys on this issue… please comment either on what I said or your personal ad revenue experience. Heck, maybe you have some ideas of your own on how P2L can generate some decent revenue you would like to share! Click on the comment button below and speak up.
Thanks!
Dan
PS. You’ll notice money is tight… I’ve gone from crafty icons and other pretty graphics to hand-drawn stickmen I made in my handy sketchbook. Although, there’s something quite charming about stickmen shooting themselves don’t you think?
