As long as we can see that there are a big number of webmasters on WebmasterWorld affected by this drop, we can call it a statistically significant event. Imagine how many webmasters out there don't watch numbers or don't post here - plenty. So I would suggest dismiss talks like "you were smart-priced", "improve your ads" or "improve your site" as insignificant and even counterproductive to understanding of the mechanisms of the drop.

I agree totally.

In that case, you can come back to crow or apologize when Google releases its 4Q 2006 numbers at the end of January. :-)

The numbers are irrelevant because we don't know how many publishers joined or left AdSense in 2006.

And, yes, I tend to believe #4 is the case as well.

You don't need to know how many publishers joined or left the network. Just divide revenues paid by revenues received, and you get the overall payout percentage.

Of course, there's nothing to say that the compensation formula couldn't have changed within the framework of that overall percentage. For example, Google might have adjusted an existing sliding pay scale, reallocated payouts to favor certain publishing practices or to discourage others, etc. We just don't know. In any case, the only thing that matters to an individual publisher is how he or she is doing. If AdSense isn't delivering results that a publisher doesn't consider to be adequate, the publisher should either look for higher-paying alternatives or figure out what (if anything) he or she is doing wrong.

rbacal: We don't have anything close to a random sample

I won't go into the exact statistics here, but I would call Webmasterworld a fairly statistically random sample of webmasters who use AdSense AND SUCCEED IN IT. Those are the ones who saw a 50% drop in earnings. I believe we also have a fairly random group of niches represented. I don't see how you, with mathematical background, can deny that.

Anyway, this is being steered off topic. The topic is "an informational survey of UPS club members".

[edited by: jatar_k at 8:07 pm (utc) on Jan. 22, 2007]
[edit reason] manners [/edit]

While webmasterworld users might give you a usable sample (doubtful at best) I don't recall receiving the survey form.

If you are basing your "sample" on the complaints in some thread, you don't suppose there might be some selection bias there? You know, people joining the thread to add their complaints to the chorus, while those continuing to do well just ignore the thread?

By the way, if you knew anything about EFV's history, you would know that he had a MAJOR traffic drop off at one point. He didn't rant and rave about how terrible google was for cheating him, he worked on solving the problem.

Some survey. Even the OP was unclear about whether his own site had seen a significant change or not.

Anyway I just read through all the responses, and by my count 4 people specifically report an increase, 3 people report no change, 5 people report a decrease. Not sure what can be learned from that.

I would call Webmasterworld a fairly statistically random sample of webmasters who use AdSense AND SUCCEED IN IT. Those are the ones who saw a 50% drop in earnings.

1) A "statistically random sample"? I don't think so.

2) If a publisher is seeing a 50% drop in earnings, the word "succeed" should be changed to "succeeded."

3) It's possible that such publishers are victims of Google's greed, though that greed apparently doesn't extend to the publishers who haven't reported a 50% drop in earnings. However, it's just as likely that they're victims of a changing market, seasonal fluctuations in supply and demand, or--in at least some (not all) cases--their overreliance on tweaks and techniques that have worked for them at the expense of advertisers.

efv: It's possible that such publishers are victims of Google's greed, though that greed apparently doesn't extend to the publishers who haven't reported a 50% drop in earnings. However, it's just as likely that they're victims of a changing market, seasonal fluctuations in supply and demand, or--in at least some (not all) cases--their overreliance on tweaks and techniques that have worked for them at the expense of advertisers.

I highlighted 3 reasons your broght up here, so replying to them:
1) yeah, sure changing markets. just search on many hurrah! threads here about money flowing into web advertising.

2) seasonal fluctuations don't account for an exact 50% drop. In fact, having one of the biggest sites in niche, I typically see money inflow in December and beginning of the year, primarily because either (a) people want to spend earnings to pay less taxes, and (b) start of new advertising season.

3) tweaks and techniques - those are tweaks and techniques advertised by Google - see the difference?

jomaxx - see the other large thread as well. what can be learned? probably nothing, 'cause noone is interested in finding out if there's something about it, let alone find out why. I've made my mind about this mess a long time ago,and just observing newbies being misled. I wish you all success as well.

In fact, having one of the biggest sites in niche, I typically see money inflow in December and beginning of the year,

Could you please make up your mind. Are you talking about you, or are you talking about something happening across the board.

If you are talking about your own site, then I'm sure that we would all be willing to admit that something happened.

If you are talking about something across the board, then you have to come up with something more than you presented. You are projecting your own results on everyone else, and there is no proof that everyone else agrees.

Aleksl, you say that you made up your mind a long time ago, so I guess there's no point in getting into a debate with you. :-) However, I will comment on a statement you made:

"yeah, sure changing markets. just search on many hurrah! threads here about money flowing into web advertising."

Sure, a lot of money is flowing into Web advertising (though there's a shift toward greater growth on the display side, according to at least one big-name advertising research firm).

However, overall growth doesn't mean all online media, all sectors, or all Web publishers will benefit equally.

As for the "exact 50% drop" that some publishers have complained about, it's worth noting the word "some." If you really think you and some fellow publishers been chosen for a 50% pay cut when others haven't been, you might want to ask yourself why--and what you might be able to do about it--instead of making sweeping assumptions that won't lead to positive change.

I'm in the UPS club (just) for October 06 and again for January 07.

My traffic has increased steadily throughout the month and is now the highest I have seen. Click through rate has been reasonable stable.

My earnings per click are showing two trends:
1) a regular drop of about 25% on Friday and then a gradual increase over the week.
2) an underlying slight downwards trend that I suspect may be due to smartpicing.

Certainly my eCPM trend is slightly down, but it is more than made up for by the increased traffic.

evf, I want to hear about publishers that got a 50% increase, with no increase in traffic or ad displays. Can you lucky ones please stand up! :)

Anyway, what one needs to do is just look at Google's 4th quarter number...we can also wait another 2 months for 1st quarter of 2007. Since 90% of Google's revenue is from advertisers, lets see if there is a drop. None? Hmm, strange. Not even as far as January 07 and November 06 GOOG stock reached $500. I'd expect a lot of missed earnings talk and a significant price drop if that was the case. Nah? Gosh...what is it than, this doesn't look like advertisers stopped advertising....

Maybe there are certain sectors that got hit?... What about those folks who have general purpose sites then? If they see drops, and they are diversified, certainly does not sound like niche advertisers.

you might want to ask yourself why

and I did. and I didn't like the answer

overall growth doesn't mean all online media, all sectors, or all Web publishers will benefit equally

Exactly. Will the real Slim Shady please stand up? Or this is just smoke and mirrors to cover another revenue extraction?

can someone who saw a 50% earnings jump in November/December 2006 please stand up now!

I want to hear about publishers that got a 50% increase, with no increase in traffic or ad displays. Can you lucky ones please stand up! :)

aleksl, a small number of data points doesn't demonstrate anything interesting, but maybe this will get you to stop repeating the request: my EPC is up well over 50% starting in December, continuing through today, who knows why. Sweet mystery of life.

My EPC was only up around 20% so far in Dec/Jan. But due to the alignment of the planets or something like a change in the SERPs, a few very nice clicks in the first week of the year had me up over 400%.

But I know what search term it was, what those high paying ads were, and why I'm only getting those clicks rarely now. My traffic volume was virtually unchanged, but the traffic itself was radically different.

Sometimes things change. They obviously changed for you, but you cannot declare that it is an across the board change.

The fact that google is still taking money in from the advertisers, has no direct correlation with what you are making per click.

Advertisers have posted here about the fact that they have reduced their bids. Reduced bids!= reduced ad budgets. They might still have the same budget, yet they are buying more clicks. If you still send them the same number of clicks, they are paying you less. But with the same ad budget, Google will still be pocketing the same percentage at the end of the month.

You don't need to know how many publishers joined or left the network. Just divide revenues paid by revenues received, and you get the overall payout percentage.

You're wrong. Look at the following example (it's quite simple).

In 2005 you have 100 publishers and earn $1000.
In 2006 you gained 50 publishers, but 50 left you so you had 100 publishers again but still earned $2000.

Obviously, you took twice more from the same number of publishers in 2006 than in 2005. However, the public won't know you did that because they may reasonably believe you have twice the number of publishers or advertisers in 2006 than in 2005.

That's why you need to know the number of publishers and advertisers who joined or left AdSense. Otherwise, the published numbers (earnings) are useless.

I'll be glad to explain it in greater detail if you still don't understand.

Nah, you're the one who doesn't understand, because we're talking about overall payout percentage.

Personally, I think that "average revenue per publisher" and "average payout per publisher" are interesting values, just as "average payout share" is. Also the absolute number of publishers would indicate how the industry is doing.

Still, even these figures would be consolidated, i.e. our daily business might develop completely different than the average business.

I'm well in the UPS club and ideed, I see some cuts, but now it seems to recover + I've sent all my small advertisers to use "Advertise on this site" feature from Adsense.
There are large variations from day to day.

Now ~ 20% of my daily revenue is from the direct advertising using adsense.

I honestly didn't expect such a hotly debated topic.

My initial goal was to see if there was a systematic shift in the last quarter of 2006. I'm taking away the following: there does appear to have been an important shift in either the algo or ad budgets in the last quarter that affected a fraction of Adsense publishers.

A few more details from my experience: Yes, my sites were affected. However, only specific channels were affected. When I look at other sites in the same niche as those channels, they are now serving the same low paying ads (I know the ads are low paying because they are site targeted and I can estimate the eCPM of those ads) rather than the higher paying ads that used to be there. This is a big niche, so either a big set of advertisers bailed or G decided that our sites weren't well suited to those ads.

That several other (but not all) niches saw a similar change in Q4 2006 suggests that it was an algo change, not a major shift in ad budgets.

So I would predict that GOOG earnings wouldn't be affected, but that the algo "improvement" hit some sites hard.

We have been in the UPS club since Sept 2003.

Our little corporation has been with adsense since the start. We took a very steep 35% drop in december far beyond 3 year avg dev.

The drop has stuck and leveled out and appears to be our new average and our Google rep tells us they have no clue as to why it has happened.

This is across several pr7 authority sites that have been around long before Google was even born and have millions of visits a month.

#1 The drop was on every site we own.

#2 Our rep assures us we have not been smartpriced.

#3 We have a very hard time believing thousands of channels on different areas all experienced that exact same drop % wise.

Take from this what you will. We already know what has happened. It is upsetting but Google is a public company now and sadly we expected this at some point.

I'm with ardent on the drop. I've been in the club for two years and I'm currently doing 50% of the income from one year ago, on the same amount of traffic. Drop started happening in November and kept going down the rest of 2006. It's leveled off so far this year at around the 50% mark. Tough to take but oh well. EPC is much lower. I've studied some stats and the older the site section, the bigger the drop for me. My older high dollar channels are running at 20% of one year ago and then the new site sections are making up the difference or it would be even worse.

Just now, I took three channels that haven't changed their content dramatically in the last year, and I compared earning per click for January 1-22, 2007 with EPC for the first 22 days of December, 2006 and January, 2006. The sample size for each period was in the three figures. Results:

- A substantial drop from January, 2006,

BUT:

- A substantial gain from December, 2006.

Somehow I find it hard to believe that the EPC decline and subsequent EPC increase are the result of Google upping (and, more recently, shrinking) its share of the gross for those three channels on my site. That hypothesis sounds a lot more farfetched than a simpler and more obvious scenario: namely, changes in supply and demand.

Having said that, I will concede that other factors (besides smart pricing or Google's being greedy) may come into play. Quality scoring, changes in a sliding-scale compensation scheme, or adjustment of the compensation algorithm to favor certain types of sites or content while discouraging others could be affecting some publishers.

Google may be a profit-making enterprise, but its founders aren't just a couple of bean counters, and Google's corporate culture has an idealistic/academic streak that shouldn't be ignored. It's easy to imagine, for example, that publishers fitting a certain profile (lots of domains, multiple ad units on each, few inbound links from quality sites, few outbound links to authority sites, etc.) might get a smaller percentage than the types of publishers that Google wanted to encourage. But simply saying "Google must be pocketing the money from the 50% decline that I'm experiencing" is naive and is contradicted by public data such as Google's quarterly earnings reports.

efv: and Google's corporate culture has an idealistic/academic streak

wasn't going to post, 'cause this isn't really a debate...but can't resist. efv, oh, pleeeeaasseee...

Let's look at major shareholders, by number of shares owned:
Fidelity (25 mln shares)
Capital Research and Management (14.4 mln shares)
Barclay's (9.4 mln shares)
AXA (9.2 mln shares)
etc.etc... another 5-8 big corporations.

The first "indealistic/academic" Googler on the list, waaay beyond first 10, is Jonathan Rosenberg, with George Reyes from BEA Systems and Symantec being next. There is NOTHING "idealistic academic" left in this company.

Sorry for offtop.

Let's look at major shareholders, by number of shares owned:

Er...shareholders have almost zero effect on organizational culture, says I, management consultant, and management book author.

Seriously. It just doesn't work that way.

now for that piece of pure fanboying they oughta send you a walk in deep freeze ..

shareholders have almost zero effect on organizational culture, says I

the wi-fi from whatever planet you got your corporate culture knowledge must be great ..

but how do you move around and avoid stepping in all the pro g under any circumstances bull that must be filling it up by now?

corp shareholders can sack boards if they dont make money and do as they are told ..cept maybe on mars or wherever you dragged that "insight" from ..

and Bretts server would choke on the bandwidth demands if people started to post you examples of corp shareholders having done just that ..

lets just throw out the example of vivendi and J3M to start with ..

Oh yeah ..and Disneys last 25 years or so ..

the twins and the geeks were told to go play with their options at g a long time ago now ..

the money men are running the show ..if they weren't some of the fanboys here really would need to worry about the stock price heading south ..L and S do math ..they dont do stock market ..

and they dont do much nowadays 'sides argue about beds and play with radio toys ..and look geeky when the suits that work for the corp stockholders tell them to ..

publishers incomes down for some may be due to many factors ..but

shareholders have almost zero effect on organizational culture, says I, management consultant, and management book author.

I laughed so hard at that one I woke the dog :)

I laughed so hard at that one I woke the dog

I'm glad, because I laugh when I receive large cheques for consulting with organizations on organizational culture, and I laugh even harder when I get my book royalty cheques.

20 years as an organizational consultant, well, you learn stuff. There's lots of good books on how organizational culture develops and is changed, and since you aren't actually paying me for my insight, the bookstore is thataway.

the money men are running the show

This is turning into another pointless Google-bashing thread. Next you'll be telling us that some mutual-fund manager at Fidelity is telling Matt Cutts how to manage his Google Search antispam team. :-)

that was too many z's in there ..and reading fiction makes me sleepy ..

seriously ...do people actually call themselves organisational consultants and keep a straight face ..thats like management relations improvers ..and rodent operatives ..and telephone hygenists ..and interoperability confirmation executives ..and other invented snakeoil shamans ..

would n't let my dog marry one ..

EFV I can go along with on most of his "possible" reasons ..cos we know he makes money from adsense and has done so for a while and his place can be seen and analysed ..slick operation ..well made ..efficient ..and I've travelled enough to know that so has he ..

but an organisational ( sorry I cant bring myself to write that wrongly with a "z" ) consultant :) who writes books on it too :) ..and has proclaimed themselves to be the resident adsense and adwords expert ..surtout on QS ..

nah ..sorry ..silly job title ..no cred ..

EFV ..one can read and learn from ..even when disagreeing with him ..and he doesnt seem to think that if he occasionally doesnt say that the sun shine from googles wazoo that they will take away his revenue .. but you cant get cred just because you say the same things as him ..I've never seen him to need a sidekick like "incrediboy" ..and never an organisational consultant ..nor a book on it ..me neither :)

This is turning into another pointless Google-bashing thread.

not g bashing at all EFV ..if I was in their managements place I would be doing it the same way ..if I had the same imperatives ..it's just their sleight of hand that gets me going ..

Matts anti spam ..? never seen it work ..same old crap and MFA is always in the serps ..it just churns around ..if they really wanted to kill it they would ..same as if they really were automating detection of hidden text then none would get by ..first time a site using it got crawled they'd be gone ..so they arent ..because an algo wouldnt be able to miss it ..

g are an ad agency that uses now many media to deliver product ..I just never saw one that used so many smoke and mirrors and double speak about what they were doing ..and I worked with some very very big ones ..

I dont ask them for the keys to the algo ..thats their business ..but the deception about what they do ( and the cache ..and the books project ) is IMO unnecessary and wrong ..and I dont see why they think they need it ..it only costs them goodwill ..and they got to be # 1 by the goodwill of the other webmasters ..as they lose trust by obscurity they only fool and or influence the likes of "organisational consultants" and those who wish to appoint themselves shamans to the god of search ..