Google AdSense Publisher Payout Dropping?
Google released its outstanding first quarter figures yesterday which reported a 60% jump to $2.25 Billion in revenues. One reason for the increase in Google revenue over the first three months of the year could be attributed in part to an increase in the percentage of Google AdSense spending that Google is keeping for itself, leading to a drop in the average publisher payout percentage.
This is also more than likely the result of smart pricing and a maturing industry and product.
Cornwall from Threadwatch does the fuzzy math after looking at these figures:
Google Network Revenues – Google’s partner sites generated revenues, through AdSense programs, of $928 million, or 41% of total revenues. This is a 59% increase over network revenues of $584 million generated in the first quarter of 2005 and a 16% increase over fourth quarter 2005 revenues of $799 million.
TAC – Traffic Acquisition Costs, the portion of revenues shared with Google’s partners, increased to $723 million in the first quarter. This compares to TAC of $629 million in the fourth quarter.
If Google AdSense Publisher Payout = Google Network Revenues/TAC:
Google Publisher Payout Q1 2006 = 77.9%
Google Publisher Payout Q4 2005 = 78.7%
With an advertising agency industry average (or rule of thumb) being 15% commissions, and a large amount of interactive agencies charging 20%; Google is still coming in well above average with its AdSense product bringing in 22.1% of all contextual network advertising revenue.
The more optimization of these figures via cost-cutting, automation and increased conversions/ROI for the advertiser could lead to better ‘commissions’ for Google. Way to go Google!
But how do publishers feel about this?