Are Adwords & Adsense Dying?

Ok, I'm talking about this from the perspective of small business. I'm certain that the Big-G is still raking in the bucks.

Is this a hunch based on an anecdote? I like to think not. Our company owns ten high traffic sites which use or have used both Adwords and Adsense since 2003.  In addition, rest assured that we talk regularly with other online partners about this subject.

The growing consensus is that Adwords is losing its efectiveness. All other things being equal, the click-through rate is down dramatically.  On the plus side, we've also noticed a corresponding decline in bidding price. Maybe everyone is starting to back off?

As for Adsense, the drop in performance has been greater than that of its sister program Adwords.  Earnings-per-click are literally at about 5-10% of what they were at the end of 2004. I hear this time and time again on various forums and in personal conversations. The click-through rate has also declined to below 1%. This fall we began dropping Adsense in favor of other publishing programs as it's no longer worth running its ads.

Moreover, of late many of our long time competitors have simply stopped using Adwords. After a year or more of going head-to-head with us in bidding for keywords, they have simply pulled the plug on their ppc advertising. From this fact it's even easier to assume that both Big-G programs are losing their effectiveness.

What's the take away here for the entrepreneur?

Don't rely on the Big-G to bring you sales. Up until recently many online entrepreneurs would rely on Adwords to bring in sales initially. But that no longer works. What's worse is the fact that the rumor mill on the various webmaster forums has it that the Big-G won't even index a new site for its first year of operations in order to force it to use Adwords to attract traffic.

I believe this rumor to be true, although the Big-G denies it, because new websites show up on Yahoo and the other search engines within 30 days of being submitted. With Google, it takes a very long time. Usually about a year.

I'd like to hear about your experiences if you run sites using these programs.

Comments

[Fantos]

You're right about declining performance. Our two sites used to earn over a dollar a click last year but now earn per-maybe-haps a dime a click at best. My theory is that no one clicks them anymore,, so due to plummeting revenues, goog has had to cut back on the payout to publishers.

[Internets Surfer]

I don't think people see the ads anymore. They just filter them out.

[Jon Husband]

Well .. first, i found this by your linking to my vague and foggy philosophizing / proselytizing about *wirearchy*. Thanks.

Secondly, I am greatly interested in your thoughts / analysis of this, because I am a co-founder of Qumana, which together with its web servoce Adgenta, is aiming to create a legitimate alternative to AdSense / Adwords for DIY publishgers (= bloggers, for now). There are a bunch of reasons why offering a solid, legitimate, and more personal-publisher friendly alternative to Google .. but i'd love to learn more of your perspective. I can be reached at my email address.

[Randy Charles Morin]

My own experience contradict everything you just said. I got a new domain indexed in Google in less than 2 months, my AdWords margins are at a high, my AdSense earnings are hanging around their all-time high.

[Peter]

I got into Adwords early on in the Spring of 2003 and joined Adsense in September of that year. So I'm comparing their performance today with their performace before. In my space, all other things being equal, both have gone down hill. I've also noticed that many of the big spenders I had to compete against on adwords are now gone. They packed it in. Maybe they just gave up on Adwords or maybe they went out of business? I don't know but at least overall bids have declined since their departure.

If you're doing well, then I'm happy for you. Enjoy it while it lasts, but don't expect it to go on forever.

[Peter]

"My own experience contradict everything you just said. I got a new domain indexed in Google in less than 2 months"

Just a request for clarification. By indexed do you simply mean that your site shows up when you do a search on its actual name? Or do you mean that it shows up favorably ranked when you do a search on whatever its key search terms are?

My sites also get indexed within a couple of months and show on searches on their names. But it takes a year for them to work their way up Google's SERPs for generic searches on key terms. Not so with Yahoo and the other SEs. There my sites pop up on the first few SERPs even for generic searches.

[bob smith]

Nice read, more info to add to my useless knowledge of search engine ranking lol

[Frank The Adwords Guru]

Interesting article. But I don't think that google adwords and adsense takes more time to get uploaded our keywords on the web. My site got indexed within a very few days and show on searches on their names. Its a very good search tool.