Why You Shouldn't Start a Business Based on AdSense
Not long ago, I talked about my great success adding AdSense to my used car site. For a while, it was great, the more clicks I got, the more money I made. Unfortunately, starting around September, the relationship between money earned, and ads clicked started to differ wildly.
I made a graph of what's going on (click to see larger):
The red line represents the click trends, which follow the general traffic trends of our site, which is basically a nice Sin curve following the times of year when people shop for cars.
The blue line is what Google is paying per 1000 clicks (it's on a different scale then the other line, scales not shown).
The interesting thing is how it started out with a very close coorelation, but over time has gotten eratic, and now it's simply divergent (The more clicks I'm getting, the less Google is paying??). Assuming all sites in my same category are getting more clicks over all, shouldn't that increase the price for ads? It's sketchy how Google keeps the actual breakdown of price paid per click secret. They can essentially "take profits" as the middle man any time they want, with no way of us auditing. It's their right to do this, but this is why I think it's silly to base a new company on AdSense as I see some doing. How can you possibly anticipate profits when there is no relation to the amount of clicks and the price paid? (The content doesn't really change on my site).
If there is no profit taking going on, is the market for AdWords slowing or drying? It seems like from the point of view of someone paying for AdWords, Google has only increased costs. Maybe I am missing some more obvious explanation for the results above.