LOS ANGELES — Canadian software developer and
part-time humorist Eric Giguère made fun of the avalanche of Internet
arthritis drug offers on his Web site last year. For his efforts, he
received a $350 check from Internet search giant Google.
Giguère has one of those ubiquitous "Ads by
Google" links on his site, offering ads the search giant considers of
interest to readers. You might think that people rarely click on them,
but they do — and often.
"For my own, personal humor writing, I got paid,"
Giguère says. "It certainly opened my eyes to the possibilities that
were out there."
Google has a simple proposition for anyone who
owns a Web site: Let it put up links to its ads, and Google's AdSense
program will give you a piece of the action when someone clicks on them.
It's found money for many bloggers, small
e-tailers and huge businesses — from small personal sites such as
Giguère's, to those of big-time corporations such as Amazon.com, the New
York Times and About.com.
Giguère was so inspired, he wrote a book, Make Easy Money with Google,
coming in May from Peachpit Press. Hundreds of online forums and Web
sites are devoted to AdSense tips and tricks. The downside of the
AdSense economy, critics charge, is that the avalanche of ads has
created a new form of spam and is destroying the integrity of sites.
"This is a program that rewards people not for
creating the best content, but for how to create sites to attract more
advertising," says Danny Sullivan, editor of Search Engine Watch online
newsletter. "AdSense has nothing to do with search. It effectively turns
the Internet into a billboard for Google's ads."
Google, whose executives often say their mission
is to organize the world's information, naturally begs to differ. "If I
do a search for the New York Times and see an ad offering a
subscription discount, that's useful to me," says Susan Wojcicki,
Google's director of product management.
Web site publishers don't disagree.
"Say I write an article about a Braun shaver,"
says Chris Pirillo, who runs the Lockergnome.com gadget Web site. "I
publish it, and within minutes, I have targeted ads about shavers on my
site. Someone who reads the content may feel compelled to pick one up.
That helps me and the reader."
Tales of AdSense riches range from a few hundred
dollars a month to $50,000 or more a year, though high-dollar paydays
are rare. They require a Web site with tons of traffic and the ability
to put in 18-hour days working the system.
Pirillo, who has a following from his former role
as a host on the now-defunct TechTV cable channel, says he's clearing
more than $10,000 a month.
Before AdSense, which began in March 2003,
bloggers and other small Web publishers had fewer options to make money.
They could put banner ads on their sites for a host of non-related
products, or commission programs from Amazon and eBay. "It was a lot
more work, and you didn't get much of a return," Pirillo says.
With AdSense, "You write content, publish it, and the money starts to pour in," he says.
When he published the now-defunct Silicon Alley Reporter magazine, Jason Calacanis says, he used to suffer from insomnia, worrying about his monthly $200,000 to $400,000 printing bill.
He now runs a company called Weblogs, which
publishes 75 Web sites on such topics as cars, gadgets, digital music
and video games. He sleeps much better, he says, because "with AdSense,
you know you're always making money. Your life gets a lot easier."
In his first four months of Web publishing,
AdSense brought in $45,000. Some of his blogs produce $3,000 a month.
His best do "four figures," Calacanis says, though he's reluctant to
fill in the exact numbers. "And that's with zero marketing," he says.
How it works
Google and Yahoo dominate the booming online
search advertising business, which is expected to grow to $5.6 billion
in 2008, from $2.7 billion in 2004. Profit from search advertising
enabled Google to more than double its revenue in 2004, to $3.1 billion.
The concept — text ads that appear next to search
results — works on a "pay-per-click" model. Advertisers pay only if
someone clicks on an ad. To use the programs, advertisers buy "keywords"
for anywhere from 5 cents to $100 a word. Those are the terms people
type into query boxes when they're searching, such as "Atlanta wedding
photographer" or "Omaha Italian restaurants."
AdSense works as a part of that keyword model;
it's an offshoot of what Google calls its AdWords program, which
competes against Yahoo's Overture unit.
AdSense is a bonus program for advertisers who
use Google AdWords. Through AdSense, Google clients get to tout their
wares beyond Google's home page — potentially reaching more than 200,000
participating Web sites.
Small Web site operators have flocked to AdSense
as a way to attract advertising. To participate, they sign up at Google,
which reviews the site. Once a small piece of computer code language is
implanted on an accepted site, Google does the rest — matching ad links
from its warehouse of clients to appropriate sites.
There's an art to optimizing a site to attract more links — and generate more revenue.
Gay Gilmore, who runs Seattle-based
recipezaar.com, says the trick is to attract ads next to recipes beyond
the main page. "The ads need to be targeted," she says, "so that when
someone is reading about chicken soup, an ad for one of the ingredients
is of keen interest."
Web site publishers need to be creative, says
Dave Lavinsky of TopPayingKeywords.com, an AdSense advice site. A house
painter advertising his services on a homemade site is leaving money on
the table if he mentions only house painting, he says. "'Housepainting'
is a 20-cent word. 'Home improvement' is worth $2, so you should create
content for that."
But Sullivan says keyword tricks hurt the
editorial integrity of sites. Another problem, he says, is the
proliferation of computer-generated directories with links to hotels,
restaurants and entertainment and no real editorial content, fueled by
the availability of "Ads by Google" checks.
Wojcicki says Google tries to review all sites in
its program, and removes offenders such as the directory sites. Critics
say the site reviews can sometimes result in an FCC-like "family
friendly" filter. Bloggers complain about being rejected for discussions
of sexuality and use of four-letter words.
"I begged, argued and appealed to reason for
months," says author Susie Bright, whose site discusses sexuality
issues. "I pointed out that all my postings were things you could easily
read in ... any number of mainstream magazines that cover sex and
politics from a fairly sophisticated point of view. And I pointed out
that my readers like to buy trousers, go on vacations, purchase ink and
basically buy all the same things that everyone else does."
Wojcicki wouldn't address the specifics of
Bright's concerns, but says AdSense isn't for everyone. "We're very
careful about who we let into our network. We reject sites with content
some people may feel uncomfortable about."
With pay-per-click ads, Google and Yahoo are
locked in a bitter battle for advertiser dollars. But Yahoo doesn't
compete with AdSense for small publishers — yet. Yahoo says it will
introduce an offering later this year.
For now, Google's most notable AdSense competitor
is privately held Kanoodle, which accepted Bright's site. It works with
small publishers and big ones (including USATODAY.com and MSNBC) and
differs from AdSense in that advertisers can choose topic areas of the
sites where they want their ads to appear.
"The search advertising market is red hot right
now, and publishers and advertisers want more," says Kanoodle CEO Lance
Podell. "We offer them more places to show their ads, and they love
that."
How long will search sizzle?
Google's initial public stock offering last
summer was a Wall Street sensation. The stock opened at $85 a share and
now sells for around $180, down from its 52-week high of $216. Some
analysts fret that the red-hot paid search market could start to cool
down.
Forrester Research, revising downward earlier
projections, expects 30% growth in search advertising revenue this year,
after a 45% jump in 2004.
"Click fraud" is another nettlesome issue for Google and Yahoo.
Advertisers pay for ads only when they're clicked, but it doesn't always work that way.
Some competitors click ads just to run up the
other guy's bills. Web publishers with AdSense get their friends to
click ads so they can get more money. Some savvy webmasters have set up
automated clicking models called "Hitbots" or "Clickbots," which click
away all day, and cost the advertiser.
Such efforts "threaten our business model,"
Google CFO George Reyes said at a recent industry conference. "Something
has to be done about this, really, really quickly."
University of California professor John Battelle,
who is writing a book on search, says the success of AdSense has built a
"growing, extremely sophisticated offshore industry."
"There are more of these sites than you can
imagine," he says. "The robots click on the ads and then none of the
clicks turn into leads for the advertisers. That's not how it's supposed
to work."
Google and Yahoo say they are working on the problem, but Battelle doesn't think that's enough.
Yahoo, Microsoft and America Online have banded
together on several occasions to fight e-mail spam, and Battelle says
Google and Yahoo should show the same kind of joint leadership. "Because
if they don't, it will end up biting them in the butt."
People
ask always Maker How can have site money with blogs, with only a few
posts, the interesting question but extremely answered simply that when
we watch our TV to watch the commercials, and similarly, when you open a
web site you can see the advertising there. Both ads the same, but in different ways.
