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Posts Tagged ‘google adsense’

Small Business Podcast

November 1, 2008 Leave a comment

For those of you who can’t get enough of podcasts (and intelligent internet insight), Rick Breslin of Drive Thru Interactive hosts the Small Business Internet Marketing Podcast.  

Recent topics include:  “Google Paid Search Clicks Are Down – Why?”, “Web 2.0 for Small Business – Does it work?”, “Local Search Engine Marketing” and “How Much Is Your Web Site Worth?” which can be seen below.  

For the list of podcasts please visit

http://www.drivethru.us.com/small-business-podcast

 

Online Advertising Spending

October 31, 2008 4 comments

I received a great comment yesterday in response to my article, Google Adsense & the Economic Turmoil, from Rick Breslin of Drive Thru Interactive.  Rick is the President of Drive Thru Interactive, web site design for small business, and the developer of Bizak.

In my article I speculate that the current economic downtown will slash marketing budgets which will trickle down through Google Adwords and Adsense. According to Rick, and an article in eMarketer, marketing budgets will likely be cut but online advertising will still thrive because online marketing is more “measurable and accountable” than print advertising.  

According to Rick Breslin:

While I agree that advertising/marketing budgets will get cut within large corporations, this is actually the best time for small businesses to continue their marketing efforts. Never stop marketing. Ever.

In fact, we’re seeing businesses (both big and small) trimming their advertising spend with traditional media (especially newspapers and magazines), while keeping or increasing their online advertising/marketing spend. Why? Online marketing is entirely measurable (and typically produces quicker ROI), and you don’t have to lock-in to huge advertising contracts with old-school publishers.

Additional email conversations with Rick expressed his belief that “online ad spend is decreasing with display ads and increasing with search (Adwords)” and 

…taking into account that Internet TV companies like Revision3 (who just had layoffs / cancelled shows) are adjusting because they make revenue from ads placed within their videos (early adopter stuff). That money is shifting to tried & true online advertising avenues like search, since they’ve figured it out over the past 5 years or so (PPC, that is).

Of course there is speculation on both sides of the online advertising spending debate but a lot of recent research supports Rick’s stance.  A survey in October 2008 by MarketingProfs found that 60% of 600 US marketers expected to increase their online spending in response to current market conditions. In June, McKinsey & Company surveyed 340 senior marketing executives, of the 91% who currently advertise online 50% of them expect to “maintain or exceed current levels” (eMarketer). The most interesting feedback from the McKinsey survey is that 55% of the senior executives are cutting traditional media expenditures in favor of online advertising.

The eMarketer article makes 7 points on why they remain bullish on online advertising spending. The number 1 point being that online advertising is measurable and accountable. With online analytics an advertiser can track every click and every sale that comes from their advertisement – print advertising can’t provide this type of tracking. Unlike traditional media (newspapers, magazines, TV) the Internet is interactive allowing for instantaneous feedback and engagement from consumers – feedback that can tweak the ad for increased effectiveness. Blogs, Facebook & Twitter can help spread these advertisements like wildfire and at virtually no cost to the advertiser – much more effective (and trackable) than handing a magazine to a friend.

All of these points by Rick and eMarketer increase my  optimism about online advertising spending. I still believe it’s time for a new advertising platform, but at least all of those Web 2.0 sites can still generate some income from Google Adsense until that platform is developed.

Google Adsense & the Economic Turmoil

October 30, 2008 3 comments

The marketing department is always one of the first departments to feel the heat during an economic downturn. With marketing budgets (and employees) likely getting cut, online advertising platforms like Google Adwords will see a decline in revenues. A decrease in Adwords will result in a decrease in Google Adsense earnings for website publishers. In response to this uncertainty Google Adsense just sent out the following email to all publishers.  

Dear Publisher,

We understand that the recent economic turmoil has created a lot of uncertainty in the lives of AdSense publishers. During these difficult times, we’re continuing to invest in innovations that improve publisher monetization and advertiser value in the content network.

We’re focusing on further developing our product offerings and boosting ad performance for publishers. We recently announced advancements in AdSense for search and experiments to make ads more effective. We’re bringing DoubleClick technologies to AdSense publishers, and we’ll continue to launch new products and features. We’re also continuing to improve our offerings for AdWords advertisers, making it easier for them to target the Google content network. Features for advertisers, such as the new display ad builder, are designed to improve ad performance on AdSense publisher sites.

We’ll keep driving technological progress, but our best asset will always be our publisher partners. The strength of AdSense lies in the value of the content you bring to users and the quality of the sites you bring to advertisers. Our success is tied to yours. We look forward to partnering with you for the long term, and remain dedicated to helping you succeed.

Sincerely,

Bootstrapped

October 13, 2008 1 comment

Well, last week was one heck of a week. Wall Street saw one of its worst weeks ever – actually the worst since 1933. After 8 consecutive days of decline the Dow lost 2,400 points, a 22.1% decrease in just 8 days.   Both the Dow 30 and the S&P 500 reached their all time high on October 9, 2007 closing at 14,164.53 and 1,565.15, respectively. The Dow is down 40% to 8451.19 and the S&P 500 is down 42.5 to 899.22, since October 9, 2007.  (Numbers as of October 10, 2008 close.)

Back in 2000 it was technology that drove the market down and this time around it’s the financials.  It will be interesting to see how much technology will be affected by this massive decline. The internet boom of the late 1990s and early 2000s was spurred by massive internet IPOs that saw stock prices skyrocket for companies with shaky foundations. Over the last 5 years there has been some massive internet valuations but most of them never went public – this could work to the internet’s advantage this time around. During the Web 2.0 era many of these startups were acquired or financed by established companies.  Of course some of these valuations were exorbitant, YouTube bought at $1.65 billion & Facebook valued at $15 billion, but they never IPOed.  Facebook has been flirting with an IPO over the last couple of years but given the current market they’re definitely not thinking about it now. One benefit of remaining in private hands is the ability to steer your company the way you see fit – not the way stockholders see fit which is often influenced by emotion.

One benefit of downturns is a startups ability (or need) to bootstrap operations, be creative and run a more efficient business model. Based on Bizak’s startup statistics over 40% of websites rely on advertising to generate revenues. Today is a good day in the markets but it will likely take years to get back to the levels we saw just weeks ago. The first department to feel this pinch will no doubt be the marketing department. Advertising across the web will decline affecting not only startups but also Google. For startups this will hopefully result in new & creative business models – hopefully more startups will generate product sales, services and subscription models. If a website can’t monetize their free content (advertising, Google Adsense) then they might be forced to charge (micro-payments maybe) for it. Adsense was already becoming worthless and these recent events will likely make it worse. 

Other startups will need to lower their burn rate to weather the uncertainty. I don’t think VC money will dry up as much as it did during the first half of the 2000s but it will probably take pause to access the trickle down effect. Right now the markets are running on a lot of emotion so we need time to pass before accessing the situation. Tough times tend to generate some of the most creative ideas – ideas that capitalize on the situation. Think of all the major web apps that you use today – Google, Myspace, YouTube, Facebook, LinkedIn.  All of these apps were post “internet bubble” products that were launched during a time when many thought the web was dead. They helped bring the tech sector back in force. This time around it’s the financials struggling and maybe it will be tech that pulls them out? 

All in all it’s a time to conserve and take the necessary steps to ensure the longevity of your application. According to Ron Conway, startups should heed the same advice he gave in 2000 which includes: 

  • If you are in a funding cycle, you should raise your funding as soon as possible and raise as much as possible.
  • You must aggressively examine and pursue M&A opportunities (unless you have over 12 months of cash reserves!) ro insure you have critical mass (including funding, customers, rolodex power, market
    share, cash, synergy, etc.).
  • Be realistic on valuations – they will fall so be ready and willing to co-operate.
  • Look for corporate partners to invest so you can raise more money. You should also consider a sale of your company to your corporate partners.
  • While it’s safe to say entrepreneurs have had negotiating leverage with the “down draft” in the market, the VC community will start exercising their leverage.

For me I have two startups and three more on the way. None of these applications are funded and all of my “salary” is in equity which will require me to wait another 1-3 years. During this time I’ll continue to launch new and exciting applications but I also need to prepare for the unexpected. To accomplish this I’ll likely join/partner with a well funded startup/company where we can equally benefit during this exciting time. Interested?  My resume and my bio.

It’s an exciting time because social and economic events create a snow ball of technological innovation. Innovation that can grow quickly and adapt efficiently. Whether this is the end of Web 2.0 or not doesn’t matter since no matter how you define it the next wave of innovation has just begun.

Google Adsense or Advertising Model?

October 1, 2008 3 comments

According to Bizak, in house advertising campaigns are more profitable for entrepreneurs than Google Adsense.  Websites who implement Adsense have an EPV of $0.07 compared to sites who manage their own advertising who earn $0.17 per visitor.  I actually think the Adsense EPV ($0.07) is a bit high and it will come down with more data.  However, compare Adsense to subscriptions ($0.35 EPV), consulting fees ($2.29 EPV) and product sales ($10.64 EPV) and Google Adsense is a poor decision for startups and websites.  

One benefit of Google Adsense is that it’s very easy to implement and the costs associated with that implementation are very low.  Sites with Adsense have the lowest CPV (Cost per Visitors) at just $0.03 – In House Advertising is more difficult to implement and therefore have a CPV of $0.12.  To no surprise product sales requires some of the highest startup costs with a $4.34 CPV – subscriptions are at $0.39 and consulting registers a $1.62 CPV.

Startup Statistics from Bizak

September 26, 2008 1 comment

Bizak allows entrepreneurs to categorize and search for startups according to industry, business type and revenue source.  As of September 26, 2008, Internet industry startups utilizing social networking tools with in house advertising is the most popular type of startup.  

The stickies below outline the most popular types of startups in their respective categories.  Google Adsense still remains very popular at 20% of all revenue models, even though I feel that it has become worthless.  My preference has always been a subscription model in one form or another – Bizak and infoMedMD both integrate a subscription model with corporate services.  Deciding whether to offer services for Free or Not Free are usually the deciding factors between a subscription or advertising model and whether you’re targeting consumers or corporations.  Generally speaking, consumers want your product for free whereas corporations are willing to pay for value added services and/or data. 

Top Startup Industries on Bizak:  Internet (35%), Arts & Entertainment (9%), Computers & Electronics (8%), Business (4%), Politics & Media (4%) and Retail (4%).

Top Website Types on Bizak:  Social Networking (16%), Ecommerce (14%), Consulting Services (11%), Content (9%), Blogs (9%), Video (6%), and Business Networking (6%).

Top Revenue Sources on Bizak:  In-House Advertising (22%), Google Adsense (20%), Product Sales (20%), Consulting Fees (17%), and Subscriptions (11%).  Back in May I also highlighted the top revenue sources on Bizak and it’s good to see with more data that Google Adsense has decreased significantly while product sales have increased.  Based on our statistics in May 2008 (a month after launch) Google Adsense was at 39%, Product sales at 14% and In-House Advertising was 12%.  Subscriptions and Services have remained relatively constant at 11% and still less then 1% use Microsoft Search Advertising and Yahoo Search Marketing for revenues.

Product Sales Top Earnings per Visitor, Adsense the Lowest Earnings

June 17, 2008 1 comment

According to current estimates on Bizak.com companies that rely on product sales have the highest average earnings per visitor (EPV) at $4.35. Google Adsense comes in with the lowest EPV of $0.06.

Google Adsense makes up almost 22% of all startups listed on Bizak yet they bring in the lowest amount of earnings. Product sales account for 17.4% of all business models, affiliate marketing 10.8%, services 16.7%, subscriptions 8% and in house advertising 25%.

Earnings, Product Sales, Google Adsense, Subscriptions, Services, Consulting