Friday, July 19, 2013

Can you make money using Google Adsense by adding Google ads to your site?

On Google Blogger today I noticed a post from Google titled "Celebrating 10 years of shared success". In essence each year two million publishers (businesses which display Google advertising on their site) earn a staggering seven billion dollars. Or put another way, these publishers help Google earn three to seven billion dollars a year as Google receives 30-50% of the advertising revenue. But let's not worry about what Google gets because the question really is, if you add Google ads to your site using Adsense can you make money.

Unfortunately due to Google's non-disclosure clauses in their agreement it is hard to get real figures from real people. Also even if you did get figures people have a tendency to exaggerate as they don't really want others to know what they are earning.

So how can you make an informed decision.

First you need traffic, lots of traffic to make good revenue. So if your site gets a few hundred visitors a month forget it. You need to be in the thousands to get a dribble and to replace your income you'd probably need to be in the million visitors a month range. If you just want to generate additional income or top up your income and have the traffic, then Google advertising may be worth considering If you read information on the internet and read between the lines you can ascertain this type of information.

However Google's celebrating 10 years of success article gives us some really useful information. That is, $7 billion dollars earned by 2 million publishers. We can look at this four ways which are: an even split, using the 80/20 rule, using the 95/5 rule and the 99/1 rule.

The even splits is where everyone has the same amount of traffic and that would mean everyone earns on average $3,500. Yes not much really is it. But the reality is chances are your site isn't a major daily newspaper site so some sites do generate a lot of traffic and most generate a little.

The second is using that age old 80/20 rule where 80% of the business is generated by 20% of the customers. In in other words 20% of the publishers would get 80% of the revenue and 80% of the publishers get to split the remaining 20% revenue. This works out for the top 20% of publishers as $14,000 a year and for the remaining 80% of publishers $875 a year. The old 80/20 rule seemed to be a good guide for standard business models of past but the internet tends to concentrate far more people into far fewer sites as evidenced by sites like Google, Facebook and Twitter.

The third approach uses the 95/5 split. What I've found recently on the internet is the old 80/20 rule no longer applies and a smaller group now earns most of the money. For example recently I read that top 20 apps earn 50% of the money and the top 250 apps earn 80% of the money. When you're looking at app stores having 100,000 to 1,000,000 apps and only 250 of those apps make most of the money, that doesn't leave much for everyone else. Thus the 95/5 split is where 5% of the publishers make 95% of the money and 95% of the publishers share just 5% of the money. This works put that 5% of the publishers make $66,500 and 95% make $184.21.

If you wanted to go with the 99/1 split which could very well apply in the internet world, you'd end up with around 20,000 publishers making $364,500  a year and 1.98 million publishers making around $35.35 a year.

Based on this information I would suspect that most people will be making something in the range of $35 to $184 a year. Whilst that doesn't sound like much keep in mind a parcel of 600 Telstra shares, which you have to have bought with hard earned money only returns around $360 a year. If you collected aluminium cans with a recycle value of about 1.25 cents a can, you'd have to collect nearly 3,000 cans to make $35.

If you're running a site where you share information and get a reasonable amount of traffic but not generating income, then adding Google advertising to your site may be worthwhile. Be careful though, if you can't do it yourself paying someone else to add and maintain the advertising for you could easily cost far more than you earn.

Clients are welcome to contact me to discuss if adding Google advertising to their sites may be worthwhile or not for them.

Kelvin Eldridge
Online Connections
Call 0415 910 703 for computer support.
Servicing Templestowe, Doncaster, Eltham and the surrounding area.

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