Forum Moderators: martinibuster
According to the article, average CPC has fallen to its lowest level in two years, and Google's average CTR (for both AdWords and AdSense, presumably) fell from 1.8% to 0.7% in 1Q 2009.
The article goes on to say that virtually all of the decline occurred in European, Middle Eastern, and African countries, making Google more vulnerable than Yahoo and MSN (in terms of CTR) since it controls 95% of the non-U.S. search-ad market.
The article's author, Rob Hof, adds that (based on what he's hearing) January and February were "pretty awful" but there were signs of improvement in March.
The BUSINESS WEEK "Tech Beat" article is here [businessweek.com].
The interesting thing for me is that supposedly US CPC spending is up and Europe down whereas I am seeing the opposite however my widgets are an expensive luxury and the US widget trade has been hammered hard but this does relate to "largely tech and consumer electronics", nonetheless, interesting.
Traffic: 117%
CTR: 70%
eCPM: 100%
Revenues: 117%
Keep in mind that this also represents 1 year of adding new content, making new sites, etc. Overall it's not so bad considering the economy, but it is certainly not proportional to the efforts I put in in terms of growth. It's more of a continuous effort to avoid sinking.
However, statistically speaking, April 2nd was the lowest day in years in terms of performance, so it has got me scared and wondering if there wasn't a glitch. I do hope that the drop of CTR is related to the economy and does not represent a global disinterest of users for Google Ads, which we have to admit, are everywhere. To avoid ad blindness, Google should be more strict with the quality of publishers and advertisers they're letting in the program.
If you go to Google's Investor Relations web page and review Q4, 2008 earnings PDF slides you will note that revenue for that quarter was up 18% and was driven mostly by international traffic. Additionally, you will note that traffic acquisition costs for Google was down 26.9%. Overall profitability was up 33%. Google does not seem to be suffering from the economic slow down that has been in motion for over a year.
I think first quarter revenue reports for 2009 are due soon - should be interesting.
As you say, it will be interesting to see the 1Q 2009 revenue reports. If there's a recovery in the works, it's likely to affect some sectors more quickly than others. (Factory orders tend to pick up before the job market does, for example, so B2B sites might see improvement before consumer sites do. Still, my consumer site has already enjoyed a sharp improvement in March for display ads and affiliate sales, though AdSense has been slower to perk up after a so-so January and February.)
Are you a Google investor or employee?
On a somewhat related note too, I wonder if things are sinking in all over to a new low. Maybe the money and credit that some have had is running out or people are holding on tightly. I have been to three places this week and times when they are normally busy and they were dead. During peak hours they are almost empty to the point where I've never seen it before. It was not a good sign for the near future.
My stats for the past 30 days compared to last year for the same dates, 100% being same:
Traffic: 117%
CTR: 70%
eCPM: 100%
Revenues: 117%
Traffic 208%
CTR: 46%
eCPM: 40%
Revenues: 84%
fell... by 1.4%
With daily fluctuations in the ranges of up to 20-30% up or down, a drop of this amount might be buried in the noise of regular day to day fluctuations due to visitor habits/holidays/day of the week/ time of the month/ news/ advertisers/etc.
Is it possible to discern a 1.4% change from within the noise of daily fluctuations? :)
Are you saying Business Week (Cavario) got their numbers drastically wrong?
With daily fluctuations in the ranges of up to 20-30% up or down,
Maybe for your sites MB however mine rarely see anything like that except at times of Google Glitches.
Using 2009 average for me shows only 6 days at 20% above average and nothing above 25% with 13 days at 20% below and significantly with 3 days of April at -25% and that the last time I had any other days at -25% were 3 days in the first week of January.
I wonder what effect it has on quality scores (both for the advertiser and publisher) when the CTR falls so rapidly (mine has only fallen by about 30%).
If Google has a single system with worldwide metrics is there a risk that European advertisers and publishers are seen to be low quality?
Or reading through other posts again - my case is unusual isn't it - something else has happened.
This is an interesting thread, especially the parts about Europe being badly affected, and the claimed drop of 60% in average CTR leading only to a drop of 1.4% in overall revenue.
As publishers we have some of our own stats to compare to this article. It's been said time and time again that we can't compare stats day to day. So does anyone else record weekly averages back to 2003? And smooth them on a 5 weekly basis?
Here's my eCPM (UK publisher).
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2003..2004..2005..2006..2007..2008..2009
Not totally accurate - getting tricky to draw ascii art on here.
Anyone else seeing similar?
So does anyone else record weekly averages back to 2003? And smooth them on a 5 weekly basis?
How many of us have sites that haven't grown and changed over the last six years? On my own site, I can see all kinds of variables at my end (not just Google's end) that would render long-term comparisons meaningless.
If everyone's eCPM looked like mine it would surely be meaningful to Google as their quarterly profits would be down the pan by 60%.
Title:If your eCPM is dropping, there may be a good reason.
Quote from the article:"search spending fell from quarter to quarter for probably the first time ever, by 1.4% in the first quarter. "
If your eCPM is dropping between last quarter to this quarter, will you notice a drop of 1.4%? The amounts members are complaining about generally exceed 1.4%.
IF your site is in a European language and the traffic is primarily European then perhaps you may see a drop in line with the 16% claimed in the article. U.S. advertising spending actually increased.
>>>Are you saying Business Week (Cavario) got their numbers drastically wrong?
Nope. Just that I don't think that these numbers apply to the quarter to quarter income drops reported here which seem to indicate a steeper drop. So relative to the topic under discussion, for sites that are in English the numbers cited by the BusinessWeek article are irrelevant to the greater income drops reported here by members. Which is to say that contrary to the title of this thread, the BusinessWeek report may not actually explain an eCPM drop felt by members, particularly those sites published in English with traffic primarily from the United States, especially because according to the report United States spending actually increased.
I think my previous posts were misunderstood. Does that make it clearer? ;)
U.S. advertising spending actually increased.
The unfortunate fact we do not have here is if this is applicable across most/all sectors since this is "largely tech and consumer electronics" which tend to be a lot easier to promote and move on faster than many other widgets.
If your eCPM is dropping between last quarter to this quarter, will you notice a drop of 1.4%? The amounts members are complaining about generally exceed 1.4%.
I appreciate what you're saying about misreading stats - there's a lot of that going on in WW. But the main message isn't in the title, it's in the link. And it's not pretty.
For the first time ever the Adsense juggernaut may have stopped speeding down the motorway, crawled down a narrow country lane, come to an abrupt stop and is frantically reversing in an attempt to find a route back to the highway.
On a different note...
So relative to the topic under discussion, for sites that are in English the numbers cited by the BusinessWeek article are irrelevant to the greater income drops reported here by members.
particularly those sites published in English with traffic primarily from the United States...
The full quote:
So relative to the topic under discussion, for sites that are in English the numbers cited by the BusinessWeek article are irrelevant to the greater income drops reported here by members. Which is to say that contrary to the title of this thread, the BusinessWeek report may not actually explain an eCPM drop felt by members, particularly those sites published in English with traffic primarily from the United States...
I think we're in agreement with the rest of what you posted. I just really wished people didn't resort to misquotes and whatnot to make points. It's just disheartening when you're honestly putting down opinions and someone tries to pull a rhetorical trick to make a point. It really is disheartening. This isn't a debate. This isn't personal. We're just discussing things, ok? ;)
Let's return to the article rather than the "my eCPM has dropped" threads.
What's significant is
1. It's not just a drop over a day or a week which could be considered a blip
2. Advertisers are finding lower returns and lower click throughs
3. Advertisers are moving some of their adspend to Yahoo and MS
4. The "erosion in spending" is expected to continue over the course of the year
5. The drop reflects tech companies' ad spend. Non-tech may have dropped by even more
I have sites that are targeted at US audiences but they still get a fair amount of traffic from European countries. The less than 1% increase in ad spend on my 80% US audience could well be rendered insignificant by a 10% cut in ad spend on the other 20% of visitors.
Adsense may well recover, and I hope it does, but there's no getting away from the fact that for the first time ever, it's going backwards.
Could Google itself be the one responsible for its reduced revenues?
Why?
Let's take this April Anomally as an example, and don't forget we seem to get at least one a month of these now, surely if my, and many others, metrics are down and assuming they are accurate and Google is not creaming anything off and the advertisers are paying less, then their income is bound to reduce as well.
In the past month I have had at least two five day periods whereby clicks, income etc dropped by a substantial amount..errr...hang on, that's ten days, 1/3 of a month.
I know we're referring to a different quarter however there were also significant anomalies during that quarter too therefore could Google be the instigator of its own earning's reduction and, thereby, many publishers?
These sudden drops and jumps are clearly an indication that something is wrong and it is obviously affecting many including Google itself plus Netmeg has already stated that implementing new AdWords campaigns has been extremely difficult.
Class, please discuss:-)
In the past month I have had at least two five day periods whereby clicks, income etc dropped by a substantial amount..errr...hang on, that's ten days, 1/3 of a month.
I've seen more day-to-day stability with AdSense than I have with display ads or affiliate revenues.
Also, common sense would suggest that some sites will be more vulnerable to spikes and dips than others are because of variables like:
- Diversity of topics
- Diversity of keywords and keyphrases
- Numbers of advertisers (overall and within topics)
- Sources of traffic
- Traffic numbers (overall and within topics)
The fact that "sudden drops and jumps" affect some sites but not others makes me skeptical about the notion that "something is wrong" or that Google is somehow instigating those sudden drops and jumps. The AdWords/AdSense world is like the stock market: Prices and publisher earnings are dynamic; they aren't determined by a printed rate card.
It's more of a continuous effort to avoid sinking.
That's because this is nothing more than a job, a nice job, but it still needs a lot of work to "sail the quarters". Some of us will be here in ten years and others don't; probably we will need to evolve and work harder.
The fact that "sudden drops and jumps" affect some sites but not others makes me skeptical about the notion that "something is wrong" or that Google is somehow instigating those sudden drops and jumps.
How else could it be explained when, in my case, all the advertisers I can see seem to remain pretty constant with only new ones entering the market, not established ones disappearing en masse?
Seeing an immediate overnight 25% reduction for several days and then an immediate 33% increase is not the normal behaviour of any kind of market, ok we're not in normal times, it is the behaviour of "manipulation" or "malfunction".
If, and I repeat IF, I had seen a dramatic reduction in my EPC I would probably find it much more difficult to postulate as above however when my EPC has remained constant and only my CTR and reported Page Impressions reduced considerably and consistently only to jump back to where they were, then I have to suspect a glitch/anomally/etc.
In the US we have seen a clear trend (from a lot of clicks):
Oct 08 = 100% ecpm
Jan 09 = 58% ecpm
Now = 77% ecpm
Our UK site has shown this same trend (also from a lot of clicks):
Oct 08 = 100% ecpm
Jan 09 = 67% ecpm
Now = 78% ecpm
It looks as though the worst of it is over (for now, assuming the economy stabilises as it is for a while before recovering in 2010, I just don't know what will happen though) - and I'd say it's been entirely down to the time it takes people to react to changes in the economy. There's no Google conspiracy here, just the unfortunate consequences of a downturn that has gone from being on Wall Street, then all over the TV then in Detroit to finally hitting people in your neighborhood. It looks as though most people now know how they are going to deal with the current circumstances (pay off debt, spend less etc) so we just have to make the most of what's being spent and prepare for a year of lowered earnings.
