The Truth About AdSense Earnings
There seems to be more “My AdSense Sky Is Falling” griping across forums, blogs and social media, this year than in past years. Is there any truth to this general impression? Can we know one way or another?
You’d think it would be easy…
- do a Google (or hey, Bing!) search for “AdSense earnings”
- get the facts and figures you need
- decide whether AdSense is worth it for your business or not.
What do you get instead? Speculation, anecdotal evidence and misinformation about how much or how little you may or may not earn with AdSense.
Already had AdSense on your website or blog for a number of years? Then you know the only fact that matters — how AdSense performs for you. Unless your traffic has been skyrocketing, performance has likely been disappointing.
Debating whether to sign up for AdSense, or whether to stick with it in the hope of better times ahead? This article delivers the information and data you need to reach the right decision.
Is the Sky Really Falling?
Search for solid information on AdSense and you don’t have to dig deep to find headlines like this…
Why Adsense Earnings have decreased by 50-70% in January 2016
Hmmm… that seems pretty conclusive! Except when you read the article, you just get vague statements like, “Adsense publishers are complaining about the huge decrease in their earnings,” and, “according to the reports… January 2015 was about 1/2 of 2014 and now 2016 is 1/3 of 2015.”
Which publishers? Where did they post these reports? How many posted? Above all, were they representative of AdSense publishers as a whole, or just a handful of folks whose businesses were in trouble and they needed a cat to kick?
For our investigation, we’ll stick to hard facts. And you don’t get much “harder” than Google’s latest annual report to the U.S. Securities and Exchange Commission.
Read the whole thing if you’re brave. Or keep scrolling down for the highlights. We’ll start with this question…
Do You Actually Receive 68%?
If you’re unfamiliar with the finer points of AdSense, 68% is your share of ad revenue. Advertisers pay 100%. Google gets 32%. You keep the balance.
Or do you? With claims of falling AdSense earnings so widespread, is one of the explanations that Google has somehow “fixed the game” so that you receive far less than your published share of income? No, it seems not. Take a look at this graph…The blue bars show Google’s total revenue from AdSense sites for the last 3 fiscal years. The green bars show what AdSense publishers received (it’s described as “Traffic acquisition costs to Google Network Members” in the annual report).
Bottom line? The green bars represent 68% of total revenue in every year (9,293/13,650, 9,864/14,539 and 10,242/15033). It’s not exactly 68%, because revenue share is different for some products (51% for AdSense for Search, for example). Put the details aside, though, and you do receive your rightful 68%.
Oh, and in case you were wondering, that figure applies to every AdSense publisher, small or large. In Google’s own words, the 68% is “not in any way averaged between publishers.”
So far, so good! And it seems to get better…
AdSense Earnings Are Rising!
You saw it in the graph above. From 2013 to 2015, AdSense publishers saw their earnings grow from $9.3 billion to $10.2 billion…
Well.. maybe the number of publishers has skyrocketed, leaving a smaller piece of a bigger pie for each of us? For those who are determined to prove a plummeting AdSense program, this seems like a good direction to explore.
We’re just determined to find the truth, but it’s still the right question. So…
How Many AdSense Publishers Are There?
If the number of publishers increases by 10% a year, say, overall revenue needs to increase by the same amount for the “average publisher” to stand still.
Here’s that graph of income growth again, this time with the percentage increase from the previous year…
If the number of AdSense publishers grew by a higher percentage each year, the earnings per publisher would have fallen on average.
Unfortunately, Google doesn’t tell us how many members are in its network.
We do know that the number of active websites has dropped by about 5% since January 2012 (~180,000,000 to ~170,000,000). New sites are not quite replacing dead ones, it seems, so the total number of active sites is declining.
So one might tend to discount a big surge in AdSense publishers. It’s possible, though, that a growing number of sites are building traffic and are moving to this low-paying but easy-to-do monetization model.
Possible but unlikely. From a pool that’s shrinking slightly, and after discounting those who were already using AdSense, do we really believe that enough new publishers would have joined AdSense to overcome its total revenue increase, diluting that into a noticeable global drop?
We can probably discount this, based on all the available numbers. We must add, though, that we don’t know with certainty. Google won’t say. Not even when you “Google” it!
So What’s Going On?
How do we square this rise in AdSense revenue with the widespread anecdotal evidence that publishers’ earnings are falling, year after year after year?
This is where we leave the safe harbor of “hard facts” and enter the choppy waters of speculation. It’s still possible to make some data-backed assumptions, though. Like this…
Ad-blocking and ad blindness are not the culprits.
Why not? Because the overall rise in AdSense earnings, shown in the graph above, already factors in the rise of ad-blocking and ad blindness (and anything else that may lead to fewer ad clicks by Web users).
Of course, AdSense earnings would have been higher still without these things. But even with them, earnings as a whole rose.
The only caveat is that you may be in a niche that has been disproportionately affected by ad-blocking. If so, it may be partly responsible for a drop in your ad revenue. For “average” AdSense publishers, though, it has not caused a drop.
And speaking of “average” publishers…
How many people stop to write an article or forum post that everything is OK?
When you lose a significant chunk of your income, it’s natural to complain about it (in forums, blog posts and comments, or wherever anyone will listen).
When you see a nice rise in earnings? Most folks can’t be bothered (“Hey, I’m OK” syndrome). Others are sensitive enough to keep quiet about it. It’s not cool to brag about the size of your bank account when folks around you are angrily reporting drops of income (some wondering where next month’s rent is coming from). So…
Is it possible that the majority of publishers are seeing a nice little increase year on year, proportionate to their traffic, and the only reason that AdSense has such a bad reputation is that the minority have the loudest voices?
Yes, but this basic human behavior has always been a negative-bias factor. Whatever any program pays, you can depend on the “money-losers” having a far louder voice, skewing impressions. However, while there are loads of anecdotes, we have not found any article that documents many more of these folks today than, say, 2 years ago.
A more likely scenario is that Google has become smarter at serving the best-performing ads to the best-performing publishers. So rather than the top 50% of publishers doing better than average, perhaps it’s only the “AdSense Superstars” in the top 10% who are seeing their revenue grow.
In other words, are the super-rich getting richer while the rest of us grow poorer?
Possibly. This is a scenario that would impact solopreneurs, the vast majority of whom do not have the sophistication of larger businesses and super-savvy solopreneurs.
That’s pure speculation, though. We promised not to go there, and there’s not much left to discuss unless we speculate. Don’t get us wrong…
Speculation is fun. And it pulls more eyeballs and page views which, for some, increases, um, AdSense income! But it does not get at the truth!
So Where Does That Leave Us?
When assessing the potential of AdSense for your business, ignore the anecdotes and online speculation. We repeat…
“When assessing the potential of AdSense for your business, ignore the anecdotes and online speculation.”
The fact that Joe from my-crappy-adsense-site.com lost 75% of his ad income last year provides no basis upon which to make a business decision. Nor does the fact that 37 people said “me too!” in the comments” — that’s just selection bias (i.e., those who did not lose traffic didn’t read to the end and, of those who did, they simply figured “I’m OK” and moved on).
Here’s what to do. Build a foundation of facts first (i.e., re-read the data above). If you have or find more useful data, please post to the comments and include the URL. And add your interpretation.
Then, if you must, use your instincts to speculate a little…
- Are AdSense earnings falling for the majority of publishers? Or is it just that the minority have the loudest voices?
- Is there a net increase in the number of AdSense publishers each year? (If it’s more than 5 or 6%, then earnings per publisher are dropping.)
- Is Google increasingly serving the best-performing ads to the best-performing sites, leaving 95% of us to slowly get poorer?
We can’t give you the answers because we don’t have them. We won’t speculate and pass it off as “fact.”
Instead, we leave you with one final fact to chew on. It’s an important indication of the direction that AdSense is headed…The blue bars show Google’s total ad revenue for each year (i.e., it includes revenue from their search results pages). The green bars show total AdSense revenue. The percentages show the proportion of green to blue — or to put it another way, how important AdSense is to the “Google machine” as a whole.
As you can see, that “importance” is decreasing. It dropped to 22.3%. Stated another way, the Google AdSense percentage dropped by 8.6% from 2013 to 2014 and from 2014 to 2015 (2.3/26.7 and 2.1/24.4). That’s a significant trend – AdSense is becoming less important to Google.
It doesn’t have anything to do with solopreneurs making more or less with AdSense. But it’s always worrisome when you’re part of something that’s becoming less important to any company, let alone Google.
Everyone loves conclusions. It’s hard to make up the ones that you’d like to construct if you restrict yourself to the facts. Based on this data-based approach, here’s our take…
Assuming that we have not missed any relevant facts, we can absolutely conclude that ALL AdSense publishers, on average, are NOT worse off.
It’s possible that the number of publishers using AdSense has increased enough to dilute earnings. It would have to be substantial, though. We feel that you can discount this, although Google could end this one by going on record with some simple data.
It’s also possible that, of all AdSense publishers, the more sophisticated could be disproportionately rewarded, leaving the less sophisticated solopreneurs feeling the pinch. We’re not saying that the skilled earn more than 68% — Google says that 68% is not an average, that it’s true for all. That said…
It’s still easy, mathematically speaking, for the skilled to earn twice as much while still keeping the same 68% of total income. Ditto for solopreneurs earning less. What lends this credence? We can see a motivation for Google to do it. This is, though, speculation.
Finally, as we noted at the very beginning, we have to observe that there does seem to be more AdSense-griping across forums, blogs and social media than in past years. So here’s what it all boils down to….
Google reports the data, but it’s not “the whole data” and “nothing but the data.” It’s incumbent upon Google, given the level of concern, to become transparent.