Posted October 21, 2013 6:02 pm by with 8 comments

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ocxKwwcMy son just discovered the joy of AdSense. He’s been producing almost daily science hangouts in Google which then slide over to YouTube. I encouraged him to monetize, he did and he made his first 20 cents this week. He was sure it was a mistake. This is too easy. “You mean, people are clicking ads and I’m getting paid?”

I love seeing that light-bulb moment.

I don’t make a living off of AdSense but it pays for my fun sites and who doesn’t like making money from their efforts. I won’t collapse if it went away, but I’d be unhappy. So I got a little nervous when I read a post on ZDNet called “What’s the future for Google’s plunging $12.7bn AdSense business?”

I thought the author was being overly dramatic with his insinuation that AdSense could fold but then I saw the numbers and now I’m not so sure.

According to Google’s recently release Quarter 3 2013 Earnings Statement, AdSense revenue has been steadily declining since the beginning of the year. In contrast, AdWords grew 22% over last year.

Google Q13

As I understand it, the blue “Network” portion is AdSense. The green “” portion is AdWords. Clearly this isn’t spelled out on the chart, I’m going by what I’ve seen from a few other sources, so do correct me if I’m wrong. stalled as we rounded from 2012 to 2013 but is back on track with continued growth. ZDNet and other sources say that even though AdWords was always a bigger moneymaker, AdSense used to mirror the growth. Not anymore and that’s worrisome.

Then there’s the added issue of split profits. AdSense revenue has to be split with the affiliates. AdWords is all Google.

If Google decided to make a radical change to AdSense, it would be like knocking over a row of dominoes. It’s not just the ads we all run on our blogs, it’s the ads on YouTube, the ads on Blogger, the co-writing sites they pay with shared AdSense dollars.

No man should live by AdSense alone, but I know there are quite a few sites that would be devastated if the program went away.

What do you think? Just a small bump in the road or are these numbers something to worry about?

  • Anders

    That is interesting. Lucky that my animated explainer video website and blog do not use AdSense,

  • Reginaldo Pereira

    Thats It! Thank you for the information it is very useful I will use in my website in Brasil:
    Website about plastic surgery in Brasil – Dr Sergio Luiz Cardoso de Faria

  • gerri50

    Bottom line as you’ve already said, you cannot live on Adsense alone!

  • A growing number of people are downloading ad blocking extensions for their browsers. The major extensions claim millions of downloads. I doubt that AdSense will be able to recover from this decline, unless Google’s new cookie-less ad technology is designed to get around these blocks.

  • aybecker

    makes sense. less and less Google traffic is going to other sites, between a combination of less SEO traffic, more competition and more Google products, people are getting less traffic and clicks than before and the traffic and money is staying at Google…look at their growth, it’s staggering.

  • Kernel Panic

    Adsense and Adwords are two sides of the same coin. Don’t sweat it.

  • Reinhardt

    Margin…more and more advertisers are flocking to other programs that pay more. Google has a difficult task of growing ad profits but at the same time have to balance the auction between supply and demand. Adwords advertisers need cost effective ads, but publishers need a bigger cut of the revenue. Google will never shut it down though. Too much market share and revenue from the program.

  • Mat Bennett

    I think that the cause of this is firmly at the feet of Google’s war on poor quality sites. AdSense has been criticised heavily in the past for helping fun the bottom rung of web publishing. We all know how hard low quality sites have been hit and that was bound to impact on AdSense revenue.
    I wrote about this on our company blog yesterday . I mentioned in that how I think that AdSense is on a quality drive of its own and the impact of Panda/Penguin are being amplified by AdSense raising the bar for publishers at the same time.
    Longer term this is a good thing. No-one wants to advertise on a network that they think is full of low quality sites. With profits of $10 billion and a share price of $1000 Google can afford to take short term hits for long term gain.