Revenue share will always be different from what lands in your pocket.
Earlier today Google announced what percentage it is paying out to its self-service Adsense for Content and Adsense for Search publishers (68% and 51% respectively). It also announced that it hasn’t changed revenue share ever for Content and not since 2005 for Search (when it increased the payout).
I immediately heard moans “then why has my revenue been going down?”
There are a number of reasons your payout may be different from the overall percentage shared with publishers. I explained much of this in a previous post “The Google Squeeze: How Google’s Black Box Affects Partners’ Revenue“. For background you should read that article. But there are some additional relevant points to be made regarding Google’s announcement this morning:
1. It only disclosed rev shares for Content and Search feeds. Domain companies get these feeds plus an Adsense for Domains feed. Also, you get a combination of all of these feeds when you park your domains. So if the ratio of ads clicked across different feeds changes, your overall payout will change too.
2. The rates aren’t for negotiated contracts. Each parking company has a specifically-negotiated payout with Google. My understanding is that this generally ranges from 60%-75% depending on size. Also, parking companies often get a higher rev share percentage if they deliver more traffic. That can change frequently.
3. Parking companies pay out a percentage of what Google pays them. You probably make anywhere between 25% and 85% of what the parking companies are paid by Google. That percentage can change, too.
4. Smart pricing is killing you. Just to reiterate — this can drastically affect your RPC. Read my previous article.
5. Cost-per-click constantly changes. The topics of your domain may be in verticals that have seen a falling PPC price.
There are two good things that came from today’s announcement.
First, all of those “paid search experts” who’ve been running around talking about how Google’s falling “Traffic Acquisition Costs” means they’re paying a lower revenue share to Publishers can finally shut up. TAC changes based on a number of factors, and as I’ve written before, is a number that matters more to investors than Publishers.
Second, I think the payout from Google is very nice. Seriously. You have a huge ad network that does an incredible job optimizing which ads it shows at the right time to the right person to optimize click through and revenue. They take care of the instantaneous auction, tracking, ad delivery, and billing. This is all delivered to you by cutting-and-pasting a snippet of code into a web page. 68% sounds very good to me.