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, 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.


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?

12 thoughts on “Is the Ad Revenue Model for Website Income a Dead Concept?

  1. I totally agree, I don’t even notice google ads anymore. Good luck with your new version of P2L. I hope if brings enough money in to keep it alive as well as your family.

  2. Its a shame that P2L is losing money. It is a great resource for tutorials and has helped me in the past. Although I am not an active member of the community I find it to be a brilliant one when I troll through the forums.

    I don’t tend to click on the adsense ad’s (sorry). However I do click the custom ad’s on your website and I have been known to buy advertising credits every now and then. Although in very small quantities.

    Good Luck with Version 5. I am sure it will be a success. I also look forward to reading your blog more. :]

  3. Well thank you, glad you like the site. Now don’t get me wrong, I don’t complain about people clicking or anything, the clicks are fine and I’m happy with the click thru. It’s the PPC price that has dropped so pathetically low that stinks. The value of a click in the last couple of years has dropped from 25 cents or more a click to 2 cents or less.

  4. Did you tried to make a marketplace on p2L like Sitepoint. Not a subforum, a big one. also, I think it might better to add a contest section to p2l for designers.
    also, it would be better if you change you layout and use bigger font. Your current layout is not straight and the fonts are very small.
    Check the design of sitepoint, PSDTUS and so more web 2.0 templates.

  5. I actually can’t stand those huge fonts on layouts… I’m not blind, so I don’t see why fonts that are 50 pixels high are needed. Also, the traffic and everything on P2L is great, the issue is the income of ads is pathetic as the ppc values are nothing like they were a couple of years ago.

  6. I hate almost every Web 2.0 styled website, they look like they were made by a 10 year old child. Web sites need to have a unique feels to them, not glassy buttons or over uses of Ajax.

    I had a very terrible experience with AdSense, when I first opened up my own Design & Development firm I was looking for a few ways to have the website pay for it’s self, so I looked into AdSense. Now this was about 3 years ago, and I haven’t used it recently but at the time it seemed like a good idea. I then installed it on my website, but a week later I got an email asking why I was advertising for another design firm on my design firms website? I said to myself “What the hell.”, I then did a ton of tests and ask a bunch of people if there was a way to fix this, but it seemed that AdSense was pulling key words out of it’s butt and using them when I told it not to.

    So about 2 weeks after I launched the AdSense program on my site, it was filed under “Never use again!”, and that was the last AdSense saw my site. I then got a request from a client of mine if he could advertise on my site and this gave me an idea. I started an ad program as one of my firm’s services, we create and advertise the ads for our clients. This is a nice set-up. The only issue that I found was if we didn’t have any clients for a few month span.

    Hope this gives you a few ideas, good luck on V5 I’ll be looking forward to it.


  7. Well I don’t mind the shiny buttons and use of Ajax, if it looks nice and it’s pulled off properly. I just don’t like to feel like I have to conform to anyone or anything. 🙂

    We’ve had our own internal ad system since last year, and we plan on giving it a major facelift in the new version 😉

  8. I think you should change the title of this one to “Do Ad Revenue sources make sense for everyone?” as you clearly made a good point when you stated that your Predator site makes 10x P2L with hardly a piece of the traffic.

    I think direct ad sales are really the best way to go for Advertisers and Publishers on free content websites. Both parties know exactly what they are getting, and there is a better feel for the audience.

  9. Hi David, thank you for the comment 🙂 While I think it’s easy to identify why the Predatorstuff sites makes more without advertising, my concern in this article is more with the extremely low price points of advertising and how it’s difficult to build a significant revenue model from it unless you bring in vast amounts of traffic volume. As you mention, direct ad sales is the way to go if you can pull it off.

  10. I understand what your saying, i still use google ads on some of my sites and then i have my mates on msn who are really kind and say “I’ll click the ads for you” I really appreciate it but it doesn’t count for much unless you have loads of people doing it.

    However, sometimes when i get free hosting and the site didn’t take much to build, my best sites i do, i choose not to put ads on them since it didn’t cost me anything to make it or maintain it so why should i try and ruin my site from ads?

    Ads should only be placed on a site if they fit in well and suite it or if there’s an empty space you need to fill you could use google adsense. Another thing is that eventhough i believe in transparent backgrounds for Ads, google will never do it because it will not be supported by IE 6 and some other browsers henceforth they do not want to look bad to the public so they cover it up with opaque colours.

    I visit P2L and i have to say, i don’t even look at the home page much, i go straight to the forums from the home page. The ads are becoming quite monotonous, and even though i don’t notice them i acknowledge that they are there. You eventually build up a contentiousness to move the cursor around them and you know where all the links are to navigate so you render the ads invisible.

    Good luck to P2L, I’m sure it will succeed in the end. For now, you will just have to rely on new P2L visitors to see the ads and be kind enough to click on them.

  11. i reckon in your case ditching Adsense for CPM ads would be a better choice while trying to increase traffic to the site.

    P2L isn’t ranked in the top 2 pages for “photoshop tutorials” while other less established/older sites have managed to get higher ranking than P2L, that indicates something wrong with your SEO techniques. and it needs to be addressed.

    that way you can add a big chunk of traffic and in turn some extra revenue.

    not a solution to all the problems but its something 🙂

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