Comment by patio11 | Hacker News Reader

Comment by patio11 | Hacker News Reader

Google has historically not been very open about this, but they're very gradually becoming more transparent on ad pricing: their cut is 32% for ads on the content network, so the advertiser is getting charged $1.47 for every $1 you see in your stats.

See: http://adsense.blogspot.com/2010/05/adsense-revenue-share.ht...

Their customer service is abyssmal. This is intentional. Everyone doing business with Google needs to go into that relationship with eyes wide open in that respect.

reocities.com probably got banned because -- and this is a pretty important concept -- there is no incentive for their Indian quality rater to think "Hmm, although in five seconds that sure sounds like it is a typosquatting spam site which is infringing on the Geocities trademark and built on industrial strength copyright violation, I'm going to give them the benefit of the doubt and investigate this thoroughly."

Typically, AdSense pays much, much more poorly than individually negotiated advertising buys, which is why most major sites use it only for placing remnant inventory. (It isn't called "webmaster welfare" for nothing.) You also get the best results of it if your page is essentially an extension of someone's Google search, which is why eHow gets $2.50 CPMs from just one of the thirteen ads on their bingo-related pages: their traffic is overwhelmingly (60%) direct from Google for queries with demonstrable intent in commercial areas. (This is better than quadruple the performance of most sites I advertise on. sigh I'm giving aid and comfort to the enemy.) Demand Media gets the psychology of advertising. Other people wanting to do it should study and study well.

"Typically, AdSense pays much, much more poorly than individually negotiated advertising buys"

What you are saying is true in some but not all cases... It's a bit more complicated than that and depends on how targeted your app/site is, as well as how much traffic you are getting.

Small startups with a lot of possible advertising topics can't solicit every possible niche. You would have to have a sales person selling bingo ads one minute, then the other niche, then the other niche etc. and then manage all those relationships.

What Adsense does is manage all that for you. No salesperson investment, no ad software investment, no prospecting etc. Also, Adsense does some other things like customizes the ad to the user's behavior (across sites), not just the page content.

Maybe what you are saying makes sense in the case of Demand Media because they have a lot of sales people.

But it's not practical for a small startup if they cover more than a few topics. They will end up with less-targeted run of site ads with lower CPM and more ad management headaches.

If you're a startup with lots of possible advertising topics, and monetizing with advertising, you're probably a UGC/social media site. Advertisers will see you as not much more than a glorified general discussion forum, and pay accordingly.

Forum traffic, unless it's very targeted to a specific niche, does NOT convert well. You won't get a good CPM no matter what. The exception to this rule is for social networks, who know enough about their users to allow demographic targeting. Even then, the CPM isn't great(I pay less than 20 cents CPM on Facebook for example). Social networks make up for this on volume, because social apps tend to generate a lot of pageviews.

That said, you will still do better with ad sales people even if you're selling general, untargeted inventory, especially if you're selling to brand advertisers.

Every couple weeks I get pestered by ad sales people from some second-tier social network who are willing to do almost anything to get an IO and commitment for a large number of impressions. Sometimes this works, even for low-quality traffic. It's possible to sell almost any kind of traffic as long as the numbers are right, and the benefit of having ad sales people, at least good ones, is that they can sell large blocks of inventory to big advertisers at once and hopefully maintain a relationship if the traffic backs out.

As for Demand Media, you're wrong about how banner buys work. If I go to cracked.com, which has lots of diverse content(and low-quality traffic), I don't see ads that are targeted to the categories or specific niches. I see banner ads from big CPG advertisers doing branding sitewide.

"Forum traffic, unless it's very targeted to a specific niche, does NOT convert well. You won't get a good CPM no matter what."

No, I'm talking about informational and news/blog sites that have hundreds or thousands of subtopics. They can get excellent CPMs with Adsense.

"That said, you will still do better with ad sales people even if you're selling general, untargeted inventory, especially if you're selling to brand advertisers."

No that's not true, unless you have a big enough company to support a lot of salespeople and really high untargeted traffic -- which is not most startups. (That's why I mentioned in my original reply that it partly depends on your traffic.)

"you're wrong about how banner buys work"

No I'm not wrong. First, I'm not interested in developing an app to sell low CPM banners. Low CPM means you are untargeted--I'm targeted. Second, the vast majorty of people on this site and doing startup do not have boatloads (100s of thousands of pageviews per day) to justify the type of ad buying your are recommending. They don't have the time nor overhead capacity to hire a staff of salespeople. Nor, do they need the headache of managing them.

They would be better of with Adsense.

"As for Demand Media, you're wrong about how banner buys work."

Actually Demand Media does both -- they are using Google Adsense, its lower on the page often integrated into the articles.

> there is no incentive for their Indian quality rater

I don't get what being Indian has to do with this, could you explain?

I doubt that actions of quality raters of non-Indian nationalities would differ if they were paid the same wages.

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