According to Reuters (and Yahoo News) Google's profits are almost 6 times higher than last year at this time, mainly thanks to more clicks on Adwords Ads
Gross revenue nearly doubled to $1.26 billion from $651.6 million. The results easily topped Wall Street's average net profit target of 78 cents a share. Analysts had seen profit excluding some items at 92 cents and revenue at $1.16 billion, according to Reuters Estimates
And where did this money come from? From Adwords Ads that while the article said came from users clicking Adwords Ads on Google SERPs, the fact that Google also paid out 462 million dollars US in "commissions"
to partner Web sites that use Google advertising services
clearly indicates a portion of that 1.16 billion $ revenue came from Adsense Publisher sites showing ads. How much Adsense Contributed to the bottom line isn't stated. What is said, however, is the percentage of "commissions" payouts were lower than last year, Googles operating costs dropped leading to a considerably higher 35.2% profit margin (up 11.4%). Adsense publishers knew the lower percentage of commissions was happening, since many of us saw Adsense CPC drop noticeably as the year went on. It also explains why targeting top $ keywords has gained considerable interest this year.
What does this mean in coming months for the adsense publisher? Well, with such stellar results, certainly the stock holders will expect more of the same (perhaps even better?) into 2006, so Google will need to continue the growth for Adwords Advertising and consequently the Adsense Program.
I fully expect current Adsense publishers payout % to be squeezed lower, just because higher profit margins are the goal of a publicly traded company, and due to more Adsense Publishers coming aboard and sharing the Adwords ad inventory pie. There are no forces to help push Adsense payouts higher until Adsense gets some competition from Yahoo (and that depends on how good Yahoo's publisher program will be), and one day from MSN. None of the current options to Adsense - like Kanoodle BrightAds- can compete on this level, so there is no reason for Google to raise Adsense payout percentages right now.
As publishers, finding the right mix of higher paying keywords to target becomes more critical, as well as finding more ways to drive traffic to those pages with Adsense. CK certainly endeavors to provide our customers with the best top keyword bids, and more importantly the connected data, with a better service and more options planned in the near future.
It takes more than just a list of keywords and their bids to make targeting expensive keywords really work. Like any venture in an open market, making more money attracts competition, and the challenge then is to be smarter and find the right tools to keep one step, or better several steps ahead of the competition. Having any successful online business,makes it hard to stay ahead of the competition, since unlike offline businesses, alot of what we do can be scrutinized and reverse engineered, or flat out stolen or copied. As CK has more tools to help our customers make more and stay ahead of their competition, we will let you know.
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