Wednesday, July 05, 2006

My Experiment with Google AdSense...

Well for the three of you reading my blog, you're probably familiar with my critizism of AdSense. After the owner of posted a picture of a check for two months revenue showing almost a million canadian dollars (which is almost on par with the US dollar now), I was more convinced then ever that it's the biggest Ponzi scam of the century. I am a firm believer in the risk or hard work = reward model. I've seen many many examples in my life where this is true. A safe investment returns a small reward, and a high risk investment returns a much larger reward. Whenever someone comes up to me with a "get rich quick scheme" it usually ends up in a bunch of people losing money. AdSense, in theory goes against this philosophy. With absolutely no risk, investment, or hard work on your part, the promise is that money will start rolling in. I was convinced there was an unseen risk here somewhere. Maybe all the fraud people are talking about... maybe Google goes belly up overnight? Well, this is how I tested that theory.

One weekend I showed my wife that million dollar check blog.

Phil - "Can you believe this nonsense? I don't know anyone that clicks these AdSense ads".

Wife - "What ads?"

Phil - "Those ads...that you see everywhere, like on the side of search results...and right there, in that forum you're reading"

Wife - "Oh, i never really noticed those were ads"

Phil - *Jaw dropped*

If my wife, who is much smarter then me, never realized these links were ads, surely a large proportion of the rest of the world may not either. Maybe all those clicks to AdSense are legitimate after all? I decided to put this theory to the test. As I have mentioned before, I've been running one MicroISV for over 10 years now, one of the highest ranked classified sites on the internet, Used Cars On-Line. Highest ranked, according to the search engines that is. At one time it was #1 on yahoo and google and almost every other search engine when you search for "used cars". It's dropped down, but as of the weekend I described above, it was on the front page of Google for that search, so it gets a lot of hits.

Currently, all of the site's money was coming from classified ads, and a few advertising deals. So it more then paid for it's expenses, but I wasn't retiring anytime soon. Since I was already making money from sellers (maybe 5% of our traffic), I started thinking maybe I am missing out on revenue from the buyers... the traffic pattern was basically that someone would come in, look for a specific car, and if they did not find it, leave. Whether they stayed or left, I wouldn't make any money from them. So I decided to stick some AdSense ads up for a week. I knew I wouldn't click them, so that ruled out one type of click-fraud. And I figured it would take at least a day or two if not more for competitors would realize the ads were there, so that would rule out the other type of click fraud. So that Sunday afternoon, I realized I could have a pure test of the reality of people clicking Google ads. I figured maybe I would make fifteen cents, a dollar on monday perhaps.

I put the ads up, and that evening checked my balance. $107 on a Sunday afternoon. I put in 3 minutes of work, spent $0, watched some World Cup, and suddenly I was on a pace to add $35k to my income. After all the hard work I'd been putting into my other ISV, it was almost frustrating that this money was sitting there all that time! I was laid off once for 2 months while i've had this site, I worked in a nightshift in an unairconditioned warehouse in the summer one year, when the site was getting TWICE as many hits as it does today. If AdSense was around then, I could have technically not worked at all. This is unreal. And the clicks seem to be legit! After three weeks of data, a very consistent 10-12% of my audience clicks the ads they see. The only odd thing about the whole scheme is that Google pays you a completely different amount for each click, so there is no realistic planning for the income. One day I got twice as many clicks, but made half as much money. It's wacky. The really astounding thing to me is that Google has got to me making 200% more then they are giving me. Just when one little ol' website like me signs up, they make enough to hire another Phd. How many others signed up that day?

I may give Yahoo ads a shot now to see if they pay more (I've heard they do). The only big negative i've seen so far, and I'm not sure if it's a coincidence or not is that I've now dropped back to the second page of Google. Certainly they couldn't be punishing me for using their service?

I'm not sure what the moral is here. On the one hand, it seems like an entirely new liberating way for people to make money for their content. I'm still convinced that there is no easy money, and something will happen to dry this up. If not, maybe one day in the future we'll all just be typing blogs like this during the day and clicking ads for products we want at night... If ads are appropriate for your site, and you havn't added any yet, give them a try.

PS - I can't believe the blogger spell check does not contain the words "Google" and "blog"?!!!


At 7:52 PM, Blogger Rob Drimmie said...

Great post, Phil. A couple of things:

You've got more than 3 readers! There are 16 subscriptions in Bloglines alone. So, you know, that's at least 19 of us then. ;-)

Have you noticed any impact in traffic as a result of adding the ads? I'm curious if people would stop visiting.

At 10:36 PM, Blogger Phil said...

I don't think there are very many "regulars" on my site that would be bothered, there has been a small impact in traffic, but it appears to be more in line with the drop on Google's rankings that I mentioned.

At 2:11 PM, Anonymous Anonymous said...

One weekend when I went home to my mother's, I caught her looking at her Macintosh's screen--intently reading a pop-up ad.

Me: "Uh, mom. That's an ad. Click on the 'x' (or whatever the mac uses)".
My Mother: "Wait...I've never seen this one before. (IE: It's a new ad.)"
Me: Uhh...

No, she isn't senile.

It reminded me of a time in college when I went into the dorm's community room in which a bunch of random people were
watching football (which I don't like). A commercial was on, and 15 out of 15 of those guys sat there, slack jawed all,
but none of them senile, staring at the screen.

What. The. Hell.

The strangest thing about advertising is that it doesn't have to be devilish or clever. I've been tricked into buying things,
sure, but it was always a trick.

At 11:53 PM, Anonymous DEBEDb said...

> A commercial was on, and 15 out of
> 15 of those guys sat there, slack
> jawed all,

With some quality stuff, they could
have stared at a test pattern with
the same attention :)

At 9:46 AM, Blogger Giles English said...

Thanks! I'm going to try this.

At 7:24 PM, Anonymous Anonymous said...

Nice post - I just wanted to comment on your 'no free lunch' and 'easy money' concerns. I think you're right - there is no get rich quick scheme, and google isn't offering one. You say that in minutes you were earning some nice cash - but this is misleading. You've built a quality site that had a lot of earned traffic. So really, you've put the work in to get the returns you're seeing from adsense. You just happened to put the work in years before adding adsense, whereas too many sites attempt the opposite.


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