Have People Stopped Clicking on Google Ads?

Have People Stopped Clicking on Google Ads?

OR DID A WEB-TRAFFIC FIRM GET THE NUMBERS WRONG? - By Chris Wilson
 On the morning of Feb. 26, the investment firm Bear Stearns sent out an alert (PDF) about some unwelcome news for Google. According to comScore, a leading Web-analytics company, the company's domestic paid clicks—that is, the number of times people in the United States clicked on a Google ad—were down 0.3 percent compared to last year and down 12 percent since October. By 7:16 a.m., former tech-securities analyst (and Slate contributor) Henry Blodget reported the news on Silicon Alley Insider under the headline "Google Disaster." As news of the comScore report circulated, Google got killed on Wall Street: The stock opened the day down $25 a share and continued to fall, sinking to an 11-month low of $464.19 before staging a modest comeback.

Wall Street's anti-Google stampede came despite some good news. The company's advertising numbers from the previous quarter were strong, particularly outside the U.S., and Bear Sterns also reported that Google has "healthy growth prospects that should lead to market share gains [and] a strong balance sheet." Nevertheless, investors were spooked by the idea that Web surfers had stopped clicking on text ads—perhaps a sign that even mighty Google wasn't immune from an economic slowdown. Wall Street, however, shouldn't have made such a leap. ComScore's click numbers, like so many stats about user behavior on the Web, are unreliable and opaque. Instead of using comScore reports to predict a tech company's future performance, an investor would be better off ignoring them.

ComScore is one of several firms in the United States that peddles statistics on Web traffic. It seems like it should be easy to get an exact count of how many people visit a Web site, click on an ad, and so forth. But as Slate's Paul Boutin has pointed out, these stats are a moving target. Analytics firms like Nielsen and comScore don't count every time a Web page gets accessed; rather, they extrapolate the numbers based on data from panelists who install the companies' tracking software. ComScore claims its panel includes more than 2 million people who are recruited either directly or through third-party software packages that offer services like virus protection and performance optimization. (The company terms this "researchware." Less charitable types call it "spyware.") The company takes the data it gets from these users and weights it according to demographics to draw a statistical portrait of traffic to individual sites. ComScore is, essentially, making an educated guess. Nobody except Google is keeping a tally of each individual click on the company's text ads.

Even though comScore's numbers are an estimate, they've been repeated as gospel with little discussion of margins of error—this despite the large psychological difference between a 0.3 percent decline and a small gain (or a bigger loss). Why did Wall Street respond so emphatically to comScore's numbers, ignoring the big-picture reassurances in Bear Sterns' report? One can certainly blame a jittery market on the watch for bad news as economic indicators everywhere are looking ugly. It's also probably fair to guess that crafty investors—guessing that less savvy investors will panic—would sell early in an attempt to make money off this skittishness. But it's impossible to avoid the conclusion that Wall Street types put way too much stock in the reliability of Web traffic stats, numbers that should not be used for day-to-day management of a portfolio.

After the public hubbub over its Google numbers, comScore released an analysis of the data on the site's blog. The post lists many caveats, including the possibility that the recent decline in clicks might have been the result of Google getting better at reducing "bad clicks"—accidental clicks by people who have no interest in the product being advertised. Many in the tech-blog community saw this response as comScore getting spooked by the fallout from its report or bending to pressure from Google. (A comScore spokesman told me there was no contact between Google and comScore executives between the time of the initial report and comScore's elaborations.) More likely, comScore was simply being realistic about the reliability—or maybe the unreliability—of its own data.

ComScore's numbers are particularly prone to error when making long-term comparisons, like the year-over-year comparison of Google's paid clicks. For one thing, the group of panelists that provided comScore's data in January 2007 isn't the same as the group from January 2008. We don't know how different the groups were because comScore doesn't release that data.

Like most companies that deal in Web statistics, comScore gives few specifics about its methodology. In order for investors and tech buffs to get a better sense of the accuracy of this data, firms like Nielsen and comScore have to become more transparent—something the Interactive Advertising Bureau, an umbrella organization for 300 companies involved in online advertising, has called on them to do. (For a great side-by-side comparison of how different Web analytics companies work—so far as we know—see this primer from the Web marketing firm Antezeta.)

Until Nielsen, comScore, and other analytics companies become committed to sharing their data and methodologies, personal fortunes and the fates of tech companies will depend on data that might not be anywhere close to accurate. Wall Street, at least, shouldn't be so willing to act on this kind of report.

Before public demand for better methodology is likely to mount, however, those whose personal fortunes rest on this data will have to understand that it is a methodology in the first place, not some universal registry of Web use data with a margin of error of zero. Next time you see a press release that says clicks are going up or down, take it for what it is: a guess—as far as we know.

Adsense Optimization: How to apply Top Paying Keywords?

Applying top paying keywords in your website is quite similar to Search Engine Optimization. However, there are many differences as well. I have done in-depth research on the subject. On the basis of that research, I have marked the points you need to keep in mind while optimizing your website for maximum payouts through highest paying Adsense keywords. We will discuss how to apply top paying keywords as well as traffic pulling keywords to a webpage for maximum payouts and traffic. First of all, we must understand that Google Adsense bot (formally known as Google Mediabot) is a subset of Google's main crawler. The crawler detects the theme of the pages and makes an entry in the Google's index (a private index - not shown publicly) that records the theme of all the pages hosting Adsense script. In other words, Google Mediabot has the characteristics somewhat similar to Google's main crawler. There are two types of optimizations that you need to follow to make a web page search engine optimized. Same is the case with Adsense Optimization.
Internal Optimization : Internal Optimization includes Meta tags, Title Text, Optimization of content, and internal linking of your website. Here we will learn how to increase relevancy of ads and how to inject keywords that will help you get high paying ads. Internal Optimization has a high impact on the relevancy of ads and CTR. External Optimization : This includes the web pages that are giving links to you (external profile of your website), anchor text being used to link your website, and many more variables that search engines use to evaluate the authoritative importance of a web page. External Optimization helps bring relevant traffic to your website and enables you to earn more by getting more CTR (Click Thru Ratio).

How long does your webpage take to show high paying ads?

This is an important question that needs to be answered. As soon as you apply Adsense script in a webpage, it is visited by the Google Mediabot (within 2 hours to 48 hours, if the bot is free - immediately). Google Mediabot's responsibility is to evaluate the theme of the web page, and enable ads almost immediately so that your website traffic does not see FREE SERVICE ADS. The relevancy of ads increases as Google's main crawler visits your website and updates its index. Furthermore, you may observe an increase in the earnings as the PR of your website/web page increases. This means that in case of Google Adsense, the internal factors that affect the ads of a particular page are evaluated by Google Mediabot (but Google's main crawler can overwrite them). And on the other hand, the external factors are inspected by the Google Crawler over a period of time. Having said that, there are simply many many factors (including those which you cannot control) that affect your ads. We are going to discuss the factors that you can control. Lets take control!

Remember:

1. Relevancy of ads may increase as your page is indexed by Google.
2. EPC (Earnings Per Click) may increase as your PR increases.
3. It entirely depends upon you how well you promote your website and get maximum earnings from your website/web pages.
4. In case of Google, many variables are involved.

A Highflier Loses Altitude as Google’s Clicks Go Flat

SAN FRANCISCO — Are Internet users clicking on fewer Google ads and putting the company’s growth prospects at risk?

Those questions are weighing on investors, who have cut the value of Google shares by 38 percent since they peaked at $747.24 in early November.

The slide continued Tuesday when Google shares dropped 4.6 percent to close at $464.19, as investors were spooked by a report by the research firm comScore that said clicks on Google ads the United States were flat in January when compared with a year earlier.

In all, Google’s shares have fallen $283 from their peak, wiping out $83 billion in market value, and bringing a aura of vulnerability, at least on Wall Street, to a company that just four months ago seemed unstoppable.

Investors have focused with new intensity on Google’s so-called paid clicks, which grew at 30 percent in the fourth quarter, because the search and advertising giant earns the vast majority of its revenue from text ads, for which it is paid only when users click on them.

Many analysts saw the comScore report as the clearest sign that Google, which does not give forecasts about its future performance, is not impervious to the slowdown that is buffeting the United States economy.

“There are pretty strong signals now that the economic slowdown is having impact on consumers’ behavior online and therefore having a negative impact on Google,” said Clayton Moran, an analyst with the Stanford Group.

Wall Street analysts say that in addition to concerns about the economy, the company is facing a growing number of questions that are weighing on its shares. Has Google gotten so big that its ability to gain further market share is limited? Is its spending out of control? Will it face stronger competition if its two chief rivals, Microsoft and Yahoo, end up merging?

For now, however Google remains a highly profitable company that is outpacing all of its major competitors. Its share of the fast-growing online advertising market in the United States increased to 28 percent last year, from 19 percent in 2005, according to eMarketer, a research firm.

And even some of Google’s biggest critics are reluctant to bet against the company in the long term.

“Everything wrong with Google’s stock is self-inflicted,” said Scott Cleland, an analyst at the Precursor Group, who testified before Congress against Google’s proposed merger with DoubleClick.

Mr. Cleland said the most recent quarter, when Google’s revenue grew at 51 percent while profit rose only 17 percent, was the latest sign that the company was overspending. “If they cut their spending a little, so that they could start gaining earnings momentum again, their stock valuation would return,” he said.

Others point out that the unexpected weakness in “paid clicks” that comScore reported may be the result of deliberate actions taken by Google that may benefit it in the long term.

“I think at least half of it is self-inflicted,” said Jordan Rohan, an analyst with RBC Capital Markets. Mr. Rohan noted that Google has reduced the clickable area in text ads to avoid accidental clicks, which earn it revenue but are of little value to advertisers.

In recent months, Google has taken other measures to improve the usefulness of its ads. For instance, it ended contracts with Web sites whose sole purpose is to carry ads — the kind that Web users are directed to when they mistype a Web address — as those ads tend to deliver poor results for marketers.

Many sophisticated marketers base their search advertising budgets not on the number of clicks they receive, but on the value those clicks create in terms of purchases or sales leads, said Marianne Wolk, an analyst with Susquehanna Financial Group. If Google weeds out poor quality clicks, advertisers may be willing to pay more for every click, Ms. Wolk said.

Google may be cleaning out poor performing sites from its advertising network so it can market the network more effectively to brand advertisers after its acquisition of DoubleClick, which is being reviewed by regulators in Europe, Ms. Wolk said.

“Google has had this history of making major changes to the platform that have had terrific impact on monetization,” Ms. Wolk said. “Given the track record, we will give them the benefit of the doubt.”

Others went as far as to question the accuracy of comScore’s one-month report. During a Jan. 31 conference call to discuss fourth-quarter earnings, Eric E. Schmidt, Google’s chief executive, repeatedly told investors that the company had not been affected by the economic slowdown.

“I am happy to say that we have not yet seen any negative impact from the rumors of future recessions,” Mr. Schmidt said.

Derek Brown, an analyst with Cantor Fitzgerald, said investors appear to be overreacting to data that Mr. Schmidt’s own statements seem to contradict. Mr. Brown noted that while Google’s share decline is significant, other technology stocks that climbed sharply in 2007, like Apple and Research in Motion, are also down sharply, in part, because of concerns about the economy.

Google’s rate of growth has slowed markedly in recent years, from 92 percent in 2005, to 73 percent in 2006 and 56 percent last year. Growth in the fourth quarter was 51 percent, slightly shy of analysts expectations. While many believe that the slowing trend is inevitable given Google’s growing size, others worry it is happening faster than anticipated.

“The fourth quarter didn’t show the company’s growth falling off a cliff, but it did show a slowdown,” said Mr. Moran, of the Stanford Group. “This is a high flying stock that trades a lot on momentum, and the momentum has turned decidedly negative.”

How Video Ads Will Change Google's AdWords Forever

By Danny Sullivan Published: February 25, 2008


Last May, I predicted Google's new Universal Search results would open the door for video ads. They're he-ere! Google is running a private test program that allows selected AdWords advertisers to associate video clips with their ads. Below the ads there's a small plus symbol with an invitation to watch a video. Click the symbol, and the video appears and begins to play. Didn't Google have video ads already? Not on its search-results pages. Google video ads appear within YouTube clips and on pages across the web that carry Google AdSense units. But video ads in the sacred Google search results? This is a revolutionary change.

For one, AdWords advertisers have had to shoehorn their messages into a 70-character limit. Well, if a picture's worth a 1,000 words, moving-picture ads will let advertisers blow through the haiku-like restriction. Video ads also open the door for the payment structure to change. Anyone remember that Google ads used to be CPM-based? Cost-per-click pricing was introduced when the AdWords Select program began in 2002 -- and the old cost-per-thousand program was eventually retired. CPM, of course, is nice for building brands. Impressions can matter more than clicks, and video might allow CPM-based ads to return to search pages. That will be especially useful in Google's quest to woo budgets from big accounts looking to build brands. Of course, video could kill the proverbial goose that lays the golden eggs. Search ads make money because people find them relevant to what they're searching for and click on them. Dump brand-building video all over the search pages, and the relevancy of the results might be hurt. Maybe. But it doesn't have to be that way. Searching for "blender"? Text ads that come up will be relevant if targeted to that word -- and if they have accompanying video about a particular blender, it likely will be perceived as relevant too. In contrast, thousands of searchers each day look for general topics such as "weather" or "lottery results." A carmaker with a video ad shilling a new model is likely to encounter the hurdles Google will toss up. Are people clicking to play the video? Do they click from the video to a site? Do editors reviewing the ad feel it is relevant? Google's going to protect that search goose. But video is almost certainly going to stick and evolve. Whatever comes, AdWords is about to undergo as radical a change as when silent pictures became talkies.

Little Known 'Boring' Websites That Make Incredible Money With AdSense

LOS ANGELES — Jerry Alonzy figured he'd be working into his 70s at least.

As an independent handyman at the mercy of weather patterns near Hartford, Conn., he'd always made a decent income that rarely grew.

Then he found Google and his life changed. Alonzy, 57, now makes $120,000 a year from the ads Google places on his Natural Handyman website, and he couldn't be more thrilled.

"I put in two, maybe three hours a day on the site, and the checks pour in," he says. "What's not to like?"

In return for placing its ads on websites and blogs, Google pays Web publishers every time one of its ads are clicked. Those clicks help keep Alonzy and his wife living comfortably and talking about moving to Hawaii. "All I need is a laptop and a high-speed Internet connection, and I can live anywhere."

The Internet may be a young person's medium, but the retired and those nearing retirement such as Alonzy have found that they can work the Web just as well. Sometimes, such "Gray Googlers" can live a richer, more financially rewarding life than when they were supposedly working.

"Google isn't just for kids anymore," says Google executive Kim Scott, who runs the company's AdSense program, the ad platform that provides the income for Web publishers such as Alonzy and others.

Take Jerrold Foutz. The former Boeing engineer, 75, started a website a few years ago devoted to one of his passions — switching mode power supplies, which help drive, for instance, the inside of video cameras.

He put Google ads on his smpstech.com site four years ago. After just one month, the first Google check was for $800. The second check totaled $2,000.

"I thought, 'Wow,' " he said. "This was the most amazing thing that ever happened to me. Something I thought would make $50 a year now equals my Boeing retirement check."

That comes out to around $25,000 yearly.

Foutz's experience is not an anomaly.

After Hope Pryor's four kids left home, she grew intrigued with the Internet and learned how to design a Web page. She didn't want it to focus on just her, so she posted some of her favorite recipes on the site.

Now, her Cooks Recipes site is bringing in nearly $90,000 yearly, mostly from Google ads. The holidays are the biggest-producing months of the year.

"Last December alone, I netted $30,000 from Google," she says. "There's not too many people I know who can walk into a car dealership and buy two vehicles at one time. I did just that recently."

While the upside of working with AdSense sounds exhilarating, it's not that way for everybody.

Scott says she posted an unsold novel on Google and earns about $5 a month from the AdSense ads on the site. Al Needham, 74, who runs a site about the care of bees (bees-online.com) from his home near Boston, reaps about $250 a month.

"Forget about getting rich overnight," says Alonzy. "It takes time to learn."

Jennifer Slegg, a consultant whose JenSense blog is devoted to tips for using so-called contextual advertising, says the easy part is getting AdSense up and running. Google provides computer code that must be copied and pasted onto a website. Figuring out how to do that "is very easy for new publishers."

Foutz says even if you've never cut and pasted code before (hint: On Windows PCs, highlight the text, press Control C to copy, then Control V to paste it), "Just follow what Google says. They have very easy-to-understand instructions."

Hard work, big reward

Introduced in 2003, AdSense was an outgrowth of Google's AdWords program, which put sponsored ads at the top of search results at Google's own site. Google created AdSense as a way to expand beyond search listings and onto hundreds of thousands of websites and blogs.

Google rivals Yahoo and MSN have similar programs, but they have found limited acceptance on the Web, where Google dominates both search, with more than 50% market share, and search advertising, with 90%.

Now everyone from big sites such as the New York Times and CNN.com to mom and pop operations such as Cooks Recipes and Natural Handyman have the familiar "Ads by Google" text-box somewhere on their site.

"With AdSense, we fund creativity on any topic," says Google's Scott. "If you have a subject you know something about, write about it, find a like-minded audience on the Internet and we'll take care of monetizing the content."

Or, as Joel Comm, author of the AdSense guidebook The AdSense Code, puts it: "People are amazed. They say, 'Really, all I have to do is write, Google will put ads on my site and pay me?' Yes, it's that simple."

There is a little more to it. The folks who reap the biggest rewards put in long hours setting up their site and feeding it lots of content.

"Write about what you know, write like mad and often," says Alonzy. "The more you write, the more opportunities you have to make money. If you post 500 pages on a topic, you'll have 500 pages with ads, and many more potential clicks."

Google's computers scan the content on Web pages to match it with appropriate advertisers. Articles on Alonzy's website about how to keep mice away might result in ads for pest control services, while a recipe for turkey casserole at Cooks Recipes might generate ads for diet tips and beauty makeovers.

"The beauty of our system is that we have so many advertisers," says Scott. "The content may not change, but our ads change every day. So you'll always see something different there."

Slegg says the biggest mistake new AdSense publishers make is clicking on AdSense ads — their own or others. That's a big no-no in Googleland, and can get you dumped from the program.

The computer won't break

Alonzy and other Gray Googlers say they haven't experienced any problems working in a young person's world.

"Many people my age are scared of computers; they think they're going to break them," says Needham. "The computers aren't going to break. But you won't find out unless you get in there and try."

At $250 a month, Needham's site generates revenue in line with its niche audience of folks who want to learn about bees.

"I bring in enough to fund a free vacation to Key West every year for the family," says Needham, a retired Department of Defense employee.

One stumbling block for many people is translating a great idea into a nice-looking Web page.

In the past, creating a Web page required knowledge of complicated HTML computer code, or learning off-the-shelf Web design software such as Microsoft's FrontPage or Adobe's Dreamweaver.

Now, Google and Yahoo have free tools to create Web pages or blogs. And many Internet website-hosting companies (such as GoDaddy and Brinkster) have online site creators that come as part of their monthly fees. Apple's iWeb is another such tool. With these, AdSense can be automatically added to your pages with the click of a mouse.

"When you retire, you have to have some interests," says Needham. "This is my indoor activity. I did a search online for how to create a website and found lots of good help out there for nothing."

The Internet, he says, opened up a new world for him.

"I started searching for other sites about bees and met some people from Australia with similar interests. We've since become friends, and I went to Australia last year to visit."

The same thing happened with Gail Bjork, 63, who runs the Digicamhelp site from her home base near Tampa. She designed her site but made a friend online in Ireland who has since redesigned it for a more professional sheen.

"My background was art," says Bjork. "I was an art teacher. I didn't know about code. My friend does. So now she handles the design, and I operate the site."

Bjork is a former local school board member who ran a print shop with her husband. A camera buff, she started the site because her friends were always asking for photo tips.

"This started as something to help my friends, and I've gone from a 14-page site to one with over 700 pages," she says. "I'm legally retired now — but not mentally."

Her site brings in around $1,500 a month. Bjork's advice to others: "For anyone, no matter what age they are, if they find something they truly love, write about it. You have nothing to lose but time. And it could really pay off."