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- Posted March 20, 2011 at 3:27 pm | Print
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If you’re a webmaster who’s looked to contextual advertising solutions (like Google’s Adsense, Chitika, Netseer, etc) to monetize your site’s traffic, you’re in the minority if you haven’t seen ad revenues continuously dropping like a rock since late 2008′s sub-prime mortgage crisis.
I certainly have.
And while I have certainly witnessed some webmasters bitching about Google and how they seem to be paying out less than they used to be, that hasn’t been the case for me. As far as I’m concerned, we’ve hit the “perfect storm” of advertising issues. Here’s how I see it…
- Visitors have become increasingly desensitized to ads, and click through rates (CTRs) have plummeted accordingly.
- Things are still really tough in large parts of North America and the rest of the world. People have less disposable income, and are therefore less likely to click on an ad that will lead to a purchase.
- With less disposable income available, advertisers are seeing lower conversion rates; people that do click through to their sites from an ad are less likely to make a purchase. Ultimately, this reduces the amount the advertiser can afford to pay for advertising, resulting in a lower payout for you.
- Tough times and increased competition for fewer customers has forced some businesses into bankruptcy/or drastically reduced their advertising budgets. With fewer merchants competing for the same top keywords, advertising becomes cheaper, yielding lower payouts to you.
- Fewer advertisers means a smaller bank of ads to draw upon, resulting in less targeted ads displayed on your site. This contributes to a constantly dropping CTR.
Like I said, the “perfect storm.”
So what to do about it?
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