Google to Make Publishers Rich with Display Ads?
In your dreams.
The news that Google will now broker display ads much as it does text ads is positioned by the company as being a way for publishers to make more money by selling remnant banner space. Here’s the article in the WSJ [subscription only].
I have a few issues. First of all, many vertical niche publishers already have relationships in place with ad networks that suck up and sell all of their remnant space. For example, we partner with IDG TechNetwork and are generally happy. There are hundreds of other networks like this. But our experience and what I have heard from others is that the revenues from these sources just keep on dropping as inventory increases and advertisers demand more services for less cost-per-impression and cost-per-click.
As I have said before, the media business is suffering from not so much "dollars into dimes" but "dollars into pennies."
So, first, publishers are NOT going to make any significant money from this. (Four years ago we made $600 to $700 per month from Google adwords. More recently, it dropped to less than $100 per month. We have removed them from our site).
This experience, which is pretty universal unless your ad page view growth outstrips Google’s decreasing returns, means that web publishers like us will tell Google to "take a hike."
I’ve also heard from customers—advertisers—that they are growing increasingly suspect of their Google adwords investments. As such, I don’t even know if the idea will fly for Google. Not everything they do works.
Maybe by placing display ads on the blogs of individuals with day jobs who currently get no revenue for their efforts, they will be satisfied with a few hundred dollars per month versus nothing. But for professional Web publishers, for certain, the idea that Google is now going to make us rich is a joke.