Savvy Affiliate

Is Adsense Losing Its Edge As A Revenue Source?

I often see questions on forums and blog comments from webmasters  who have seen a drop in their earnings or whose earnings haven’t grown as much as they thought that it would.  They ask if Adsense is dead as a money making source, and if they should look elsewhere for their revenue.

The answer is no, Adsense is very much alive and is in fact still growing.  Although this may be a shock to some webmasters, this comes right out of Google’s 2007 1st quarter report.

Comparing Year over Year earnings Google’s revenue shot up 46% from its network partners (Adsense) shot up 46% from the first quarter 2006 to the first quarter 2007.  More importantly, Google’s traffic acquistion cost, i.e. the amount of money paid to its partners, went up from $785 million to $1.125 Billion between 1Q06 and 1Q07.   Which means that there are 46% more adsense dollars out there this year than there were last year!

Looking at just the percentage of money that Google paid to its adsense partners vs. how much they brought in - In Q1 07 Google paid out $1.05 billion to its Adsense partners, they generated a net revenue of $1.35 billion off of Adsense.   Doing the math you can see that Google pays out ~43% of all its Adsense earnings!

What this means is that as Google grows, their adsense program continues to grow right along with it.   When you consider that Google is currently only capturing 5% of all the advertising dollars available in the United States, and much less than that in other parts of the world, you can see that Google’s growth potential is still tremendous.  As such, Adsense is a long way from being dead, in fact it is stronger than ever.