Declining revenue has publishers rethinking Google AdSense

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In its first-quarter financial results, Google reported that revenue generated through its AdSense programs fell 3% year-over-year. For b-to-b publishers, the quarterly revenue dip is nothing compared with the program's long-term decline. AdSense has become such a small percentage of their revenue that many are looking to replace it. “A few years ago, Google AdSense was it; but that's just not true anymore,” said Joe Pulizzi, chief content officer at Junta42, a vertical search site for content marketing and custom publishing, and president of parent company Z Squared Media. “You need to do your own analysis and find out how much money you're really making with AdSense; then, ask if you can use those spots more efficiently.” Christine Oldenbrook, director of marketing and e-media at Bobit Business Media, said: “We don't do a lot with AdSense, and we're cutting it back. We're selling a lot more contextual ads ourselves since we opened up more contextual advertising space in our Web site designs and integrated our sales force. “Our salespeople are becoming anxious to sell the space themselves, and we can make more money.” To maximize inventory, Oldenbrook is also looking into ad networks that might bring in nonendemic advertising at higher CPMs than AdSense. Ted Bahr, president and publisher of BZ Media, which publishes two tech titles, SD Times and Systems Management News, said: “We're really disappointed with AdSense. We get about one-sixth of the revenue we did three or four years ago [from AdSense]. For a small company like ours, Google is unresponsive, and the checks are so small now that it's not worth my time to try to work with them.” So Bahr is investigating other passive revenue streams. “We're constantly being solicited,” he said. “Right now, we're working with a company called Job Target and the IDG Tech Network.” Bahr said the IDG Tech Network has access to large technology companies and agencies his company often cannot access. “We look at it as a way to expand our reach, but we're not making a lot of money yet,” he added, noting that the network is only about a year old. In contrast to smaller b-to-b publishers, large companies such as Hanley Wood and Reed Business Information are largely happy with Google AdSense, crediting the search giant with helping them grow revenue in spite of the down economy and the general trend toward lower click-through rates. Nevertheless, the revenue generated by AdSense and other large general networks is usually minimal. “Our AdSense revenue has incrementally grown over the past few years,” said Traci Young, VP-product development for Reed's RB Interactive unit. “The growth has come from following some suggestions Google provided us to increase the performance of the AdSense units on our pages.” In addition, Reed recently renegotiated its contract with Google so that it is consistent for all its units internationally and the revenue share percentage is higher. Erik Schulze, director of audience and media optimization at Hanley Wood, said he is testing other ad networks to see if they will yield higher revenue per page than AdSense, although he said he hasn't yet found one. “Some of the inventory that would have gone to Google in the past has gone to other networks,” he said, adding that Google has improved its targeting capabilities, which has increased click-through rates.
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