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I talked about the first reason for doing so being that while CPC costs going up means bad news for affiliate marketers, it also means good news for AdSense content producers.

This isn’t a short-term trend either. I believe that the way it was before, where PPC affiliates were making a huge spread on buying and selling traffic, was rather skewed. The direction that things are moving in right now makes more sense, since the real value for consumers on the Internet comes from two places:

The content producers who produce great quality content – whether that be blog posts, reviews, videos, podcasts or anything else. (information)
The products or services being sold to the consumer. (products & services)

Everyone else in between are just “middle-men” that don’t really produce content, or offer products or services. There is nothing wrong with being a “middle-man”, as I earn part of my income being an affiliate marketer, so I have a lot of respect for the affiliate marketing industry, but I’m just trying to point out that the trend is going to continue in the direction of “squeezing” the middle-man margins down.

For more information on this, please read my first Adsense article which talks about this first reason why I re-installed Adsense on my Blog

In this article I want to talk about the second reason, which is…
Significant Improvements in AdSense Ads Audience Targetting

Ask any Blogger who used to run AdSense and then ditched it and they will tell you the same thing:

“AdSense sucks. It showed the same crappy ads on my site and nobody ever clicked on them.” – Typical Blogger

Everything has now changed.

I have recently learned that Google has been making some significant improvements in the AdSense ads targeting algorithms.

Some of these improvements I saw as an AdWords advertiser which allowed me to accurately target all kinds of cool demographics for my ads.

For example, did you know that you can create campaigns on AdWords which will only show your ads to 40-49 year old males with an income greater than $50k and only from the hours of 2am and 3am?

This is just one example, but there have been some huge improvements to the way that AdWords advertisers can target specific niche markets and very specific demographics. What that means is more relevant ad targeting for your audience.

For example, if your site is visited by a predominantly male audience, ads that target males will probably produce more clicks right? There is no sense showing ads that target 14 year old teenage girls, on a Blog that is primarily visited by 40 year old males right?

So, the trend towards more finely tuned ad placement by Google will result in more money in the pockets of the AdSense publisher.

Remember, Google gets 32% of the earnings (source) on your AdSense earnings from your Blog content (you get 68%), so they have a vested interest in improving your AdSense earning! They are this silent partner of yours who has an interest in making your income go up. I think that’s a good deal. 🙂

By displaying the most relevant ads possible to a visitor, Google is going to continue to increase the value that an AdWords advertiser gets, which in turn will increase the CPC costs on each click. See, in the past an AdWords advertiser might only be willing to pay $0.25/click on mostly “untargeted” traffic, but today they might be willing to pay $10/click or even $50/click or higher if they know that the click is coming from the demographic they are targeting.

Why Accurate Targeting Matters

Accurate targeting of advertising ads is hugely important for everyone. The more accurate we can be with advertising, the more everyone wins.

Consumers win with targeted adverting because we are presented with ads that are relevant to us. As a man, think about how much time you’ve spent in your life watching feminine hygiene product commercials on TV. I mean, do we really need to see those commercials? We’re totally clueless about those things even if we watch the commercials anyways, so what’s the point? As a woman, how many times have you seen ads for stuff that really means nothing to you?

And those two examples are just related to male/female demographic data. Add in age demographics and things get more relevant. As a male in his 30’s do I really need to be seeing denture cream ads?

Add in demographic information such as whether or not I’m married and/or have kids and now the ads targeting me can be even more relevant. I don’t need to see diaper commercials – I don’t have kids. I’d be much more interested in some kind of dog related product for my dog Zoe or some cool tech gadget.

With TV advertising, there are limitations as to how targeted the ads can get, but on the Internet things can get very accurate.

I know some people might object to the fact that by targeting ads more closely to who you are, advertisers will be able to more easily “manipulate” us into buying their products, so accurate targeting is not a good thing – but I for one would love to live in a world where I never see another feminine hygiene commercial again. If I must watch commercials, at least make them about something I am interested in.

As an AdSense publisher, the more accurate that the advertising gets, the more clicks it will produce. That’s a win for us as content publishers.

Even More Cool Ninja Stuff Google is Doing With AdWords

As cool as demographical targeting is, there are much cooler things that Google is doing in terms of ad targeting.

Did you know that Google is now able to target ads based on people’s browsing history?

Yes, it’s true. Google is watching you. 🙂

Google is now tracking what you’re browsing and basing the ads you see on the types of sites you visited in the last few hours. Google announced this change to AdSense in February (source).

Two reasons why browsing history targeting is cool for AdSense users:

(1) You Can Focus on Content That You’re Passionate About

A long time ago, way back in like 2005, a lot of people started producing “made for AdSense” websites which targeted keywords with high CPC’s – instead of building real websites with real value about things they were really passionate about.

Meaning, if you wanted to make money with AdSense, and you were passionate about energy healing for example, you could start a Blog about energy healing but your Blog might not make a lot of money with AdSense. Why?

Well, the reason your energy healing Blog might not make a lot of money on Adsense is because that “niche” market might not have a lot of AdWords advertisers paying high CPC’s for related keywords. So when Google indexed your pages and saw that your site was about energy healing, it would show ads related to energy healing and your Adsense earnings could stink. (this is just an example)

Contrast that with starting a Blog in a much more “profitable” AdSense niche such as “divorce attorneys” for example. If you started a Blog that talked about divorce attorney related information, you could make way more money in that niche with the same amount of traffic compared to your energy healing niche.

This kind of thing led to a whole crapload of “spammy” websites being created with “content” (if you can really call it that) on high profit keyword topics, written by people who have zero passion for the topic itself.

In fact, at one point a few years back if you went to a website and saw Adsense advertising, it was almost a sure indicator of “crappy” content. At least it was to me. There were exceptions of course, but for the most part a lot of the highest AdSense earning sites weren’t the best sites with the best content – they were just sites in highly profitable niches.

Today, as content publishers we can focus on providing real, valuable content in whatever niche we are passionate about knowing that the “niche” we are in, is no longer the sole indicator that Google uses for determining which ads to display.

Meaning, using browsing history, Google can target people with ads based on their browsing history and not your site. This is such an important point, and it my opinion it’s a game changer. I don’t think many people really realized this in February when Google announced it (I know I didn’t), but this is going to be a huge benefit to “real value” content producers.

Read the following sentence and really try to grasp the implications of it as an AdSense publisher.

AdSense is now about what interests your visitor, and not what your site is about.

That means that it is possible for Google to show divorce attorney ads on an energy healing site, if Google deems them to be relevant to that specific visitor, even if your site is about something totally unrelated to divorce attorneys.

In my opinion, that’s frick’n brilliant!

We no longer have to try to write content that’s “profitable”. We can simply write about what we’re passionate about and just focus on attracting a large audience. Then, Google will determine the best ads to show each specific person! Instead of one type of ad for each of your visitors, they can show a thousand different ads to a thousand different visitors.

(2) Repeat Traffic Is Now a Good Thing!

If the first reason why browsing history is cool got you excited – this will really get you pumped – especially if you’re a Blogger.

Bloggers build sites that target repeat visitors. Previously, repeat visitors weren’t very profitable for Adsense because they quickly became blind to your ads.

When Google AdSense targeted ads purely based on the content of your pages, your visitors always saw the same types of ads. A repeat visitor that came to your site 100 times in a month used to see the same or similar ads 100 times.

Meaning, if I went to a “Make Money Online” type Blog, I always seemed to see the same ten ads I saw on every other “Make Money Online” Blog. If I visited that Blog 100 times in a month I would see the same ads 100 times.

That pretty much led to “banner blindness” or “AdSense blindness”, because even if I clicked on those ads once on one Blog to check them out, I probably wouldn’t be interested in clicking on them again and again.

Now with browser history targeting, Google will not only show different ads to different people – they will also show different ads to different people at different times!

If one of your visitors visits a bunch of car dealership sites for example, because they are looking to purchase a new vehicle, they might be shown an ad from Honda or Mazda when they arrive at your Blog. A few days later, if they are looking at baby cribs before visiting your site, they might actually be shown baby-related ads when they visit your Blog.

Different ads, for different people, at different times.

Isnt’ that cool?

Regardless whether or not we go with AdSense for such amazing advancements, or whether other players pop up in the marketplace to compete with Google on this, I think the days of manually selling advertising on your Blog are numbered.

I mean, honestly, why would anyone want to buy an ad on your Blog for a month, showing the same banner to every visitor of yours regardless how relevant that ad is, when they can get laser-precision targeted spots on other Blogs (like this one) running AdSense with accurate reports, demographic targeting, web history targeting, and the works.

Manually selling ads on your Blog is so 2007, it’s not even funny.

I still do it if anyone’s interested, but honestly you’re probably better off targeting my site on AdSense.

I’m giving Adsense another try on my Blog.

I gave Adsense a chance on my Blog a few years back, and ended up giving up on it after finding other monetization strategies more useful for my Blog audience.

However, the online landscape is always evolving and I’m giving Adsense another chance based on some recent research I’ve done on the subject.

Here is reason #1 why I’m giving AdSense another chance:
Secret Ninja Learnings From My PPC Affiliate Marketing Days

In 2009 I spent tens of thousands of dollars with Google AdWords, targeting the content network – in other words Adsense publishers. While I was learning the ins and outs of the AdWords platform as a way to buy and drive traffic for affiliate sites, I made a couple very important observations.

First of all, I realized that the AdWords landscape is very competitive and things are just getting more and more competitive. Affiliate margins are shrinking and CPC costs are going up. As CPC costs go up, margins for affiliates are shrinking while margins for AdSense publishers (and Google) are increasing.

Let’s use this example.

Imagine if I was paying $1.50/click on a PPC campaign running on the AdSense network.

Let’s say that this $1.50/click put me at the 2nd position in an AdSense box. If I tried to lower my CPC down to $1.45/click for example, I might fall to the 3rd position or the 4th position and may not even be seen at all. That’s how competitive things are on AdWords right now. You can’t just go out there and buy $0.10/clicks anymore.

Of course, there are exceptions to this, but for the majority of the campaigns I ran as an affiliate, there was a lot of competition.

Now, on that $1.50/click CPC I may have only been earning about $1.65/click. Meaning, I may only be making a margin of $0.15/click on that as an affiliate.

On a few occasions, I remember thinking… “Man, I’m working so hard to make a $0.15/click spread on this and taking all the risk of trying to convert this traffic and make it work. However, the AdSense publisher is getting free traffic from SEO optimization efforts and look at their margins!”

Meaning, in the example above, with my margin of $0.15 I would be making $15 in profit for every 100 clicks.

However, how much is Google and the AdSense publisher making on those same clicks?

Well, here’s what we know.

We know that the clicks are costing $1.50/click so that means that Google and the AdSense publisher are splitting $150 from 100 clicks.

Last month, Google announced that they pay AdSense publishers 68% of the revenue share, so out of $150 that the AdWords affiliate spent to get 100 clicks the AdSense publisher makes $102.

That’s a lot more than the $15 I was making on the spread as an affiliate.

Once again, I want to stress that these numbers are just examples and each niche market and each campaign is different. I understand that some affiliates are making 100% ROI or even higher on their AdWords costs, but that wasn’t me and most of the people I talk to in the industry have reported the same thing – shrinking of the profit margin for affiliates.

Of course this makes sense in the grand scheme of things because PPC affiliates are really just brokering traffic. They are buying traffic from one place and selling it to another, while trying to make a profit in the middle.

There is nothing wrong with that, but it makes sense that those kinds of margins will always erode as more competition shows up to play the affiliate game.

Anyway, while I was bidding on these keywords on the Content Network, I remember having the distinct feeling that I was on the wrong side of the fence. Google values and wants to reward content producers (like Bloggers), and not traffic brokers (ie. Affiliates).

Years ago, on that same $1.65 earning per click, the distribution might look like this:

Affiliate Earnings Per Click: $1.65/click
Affiliate Profit Per Click: $1.40/click
AdWords Cost Per Click : $0.25/click
AdSense Publisher Keeps: $0.17/click
Google Keeps: $0.08/click

Today that same campaign might look more like this:

Affiliate Earnings Per Click: $1.65/click
Affiliate Profit Per Click: $0.15/click
AdWords Cost Per Click : $1.50/click
AdSense Publisher Keeps: $1.02/click
Google Keeps: $0.48/click

These are not super accurate numbers from all across the board in all niche markets.

These are simply some observations I made from some of my previous campaigns. I could be totally off on the specific numbers but I do believe I am right about the trend – being that it is becoming way more lucrative being an Adsense Publisher / Content Producer than an AdWords affiliate.

Once again, I will re-iterate that to me this move to reward the content producers makes total sense.

The content publisher, (ie. Blogger) has to spend a lot of time producing good quality content so he should make a big chunk of that pie in my opinion.

It’s important to note here that the $1.65/click earnings I’m talking about here in the example is what the affiliate might get paid out from an affiliate network. Of course the affiliate network makes some money on top of that as well, and of course the original advertiser must be making more than $1.65/click if they are paying out that much as well.