Owning an Adsense Site is the worst decision you can make - I've posted the figures here to prove it

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<< I feel like I'm risking upsetting people, so I'm adding this to clarify, I have no issue with Adsense as a way of making money despite my overly dramatic title! I own (successful) adsense sites myself, but I've learnt there's more money to be made by not staying in the adsense comfort zone. The figures below are a summary of how I arrived at that conclusion >>


I did the research here for a post due to be published on my blog this Friday.

Without realising, many of us are literally throwing money down the drain promoting sites that have a fraction of the potential they would if we knew what to change.

In this post I ran calculations on over 2,000 recent website sales on various marketplaces including Flippa and Digital point, to find out which type of monetisation strategy yields the highest revenue per unique user. When looking the different monetisation types, this relies on Flippa data as this is the only marketplace which supplies this.

The idea behind this is simple; How much money you make isn't really down to how much SEO you do. It's how well the site is set up to convert and monetise the people who visit. For example, I can build 100's of links to a site that has badly configured adsense ads and make little money regardless of how much traffic is generated. On the flip side, I can do half the work and get half the traffic but still make many times more if that site is set up to sell a product for example and does so with a great conversion rate.

To test out various theories I looked at revenue per unique user - the average amount a site generates for every unique visitor it gets. Here are the results (the full criteria used to create these results and a much more indepth description of everything here will be published this Friday via RSS)



The full article goes into more depth (including measures that were put in place to increase the likelyhood the results were representative and accurate), but here's a brief overview of the most important conclusions: 

Adsense alone = a quick route to slow growth
One of the lowest RPUs and hence one of the poorest methods of monetisation for a site was Adsense / Advertising only which barely makes $0.11 for each unique user that visits. Adsense is probably the easiest way to start in IM and I personally think it's a great way to make a dent in generating a passive income, but for the same amount of effort you could quite easily double or even quadruple your income from that same site with a few small changes.


A combination of both affiliate sales and advertising yields the worse results overall, worse than advertising / adsense alone.


The type of site which made the most revenue per unique user, gross and net, were sites that sold a product or service.


Flippa has no strict guidelines on what this is, but from the data I analysed it consists of
  • Service offerings (mostly SEO related) such as proofreading, traffic selling, link building and Facebook / Craiglist services
  • Ecommerce offerings including dropship sites
  • Web Applications
  • Info products and Digital Downloads (with ownership rights)

It seems logical that this type of business would have the highest RPU, as almost all of the revenue is gross profit (with the exception of dropshipping). Not only will these sites generate more cash when you own them, if you decide to sell, the average revenue multiple far exceeds any other type of site, especially when you have an asset (content rights or software) included in the sale.

To stress the point, picture this; you have three sites that you choose to work on in the same niche. All are brand new sites and you spend the same amount of time doing exactly the same amount of work. Assuming you manage to attract 1,000 visitors per month on average for those six months

- An Adsense site is statistically likely to make you $660 in profit.

- A site selling a Clickbank product ($27 ave per sale after refunds, 0.6% ave conversion) statistically likely to make you $972 in profit.

- A Product based site (e.g. ecommerce or your own DVD / Ebook product) is statistically likely to make you $6,360 in profit.

These figures are based on averages, but generally will stack up unless some 400+ transactions were all anomalies.

There are logical reasons to own an adsense site, some of which I've taken from discussions with peope on forums, but not all these are 'good' reasons. My excuse was 'comfort zone' and fear of failure. Doing something different always lost to doing something that I knew would work (i.e. adsense), so the choice of potentially failing or guaranteed success was an easy one to make. Not thinking big enough has potentially cost me 000,000s in lost revenue for all the time I've spent promoting sites that could be making more money with the same level of promotion.


Here's a list of things to consider:

# There are practical reasons where an Adsense site is still the best option which include, lack of time initially to do something else, lack of suitable products in a marketplace (e.g. government / community / social) or ease of ownership (although I dont think selling an affiliate product is much more difficult)

# If you're actively promoting adsense sites, ask yourself if they could support a product based offering such as a dropship store or an information product and give serious consideration to switching. It may not be broke, but that doesn't mean you shouldn't fix it!

# If you've been doing your own linkbuilding for over a year and you're doing it for an adsense or affiliate site, stop now! You've served your time - outsource everything you understand and devote your hours to creating a product

# There's an opportunity in searching for websites for sale that are adsense only but have good traffic. Simply changing the monetisation would more than likely increase its revenue based on the existing traffic figures

The full article goes into more depth and also covers affiliate sites and how they fit into everything. You can find out when it goes live via my RSS Feed

Justin
#adsense #buying a website #decision #figures #flippa #make #owning #prove #selling a website #seo strategy #site #worst
  • Profile picture of the author waken
    Well.. MFA sites are easy to build.. you can build 100's of them with the same amount of time spent to build a good looking content rich (unique) site.

    So, while it sounds theoretical..people are still doing this ...and yet some are very successful.. (of course there are some off-site SEO done - link building etc.).

    "Make $1/ site/day; 100 sites = $100/ day and each site takes you only 5 minutes to build"
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    • Profile picture of the author Flipfilter
      Originally Posted by waken View Post

      "Make $1/ site/day; 100 sites = $100/ day and each site takes you only 5 minutes to build"
      This is the bullsh!t dream that propels people to keep doing something which is less likely to work.

      There are adsense success stories - I see posts here often from people who have a large portfolio of sites that make between $1 and $500 per day.

      But would you like to guess what percentage of people actually find success with the '100 sites per day' method? I dont know the exact answer but I can make an educated guess that its a very very small minority.

      The fact is you're statistically more likely to make more money by doing exactly the same work on 100 sites that aren't adsense than ones that are. So why go for the low hanging fruit? You'll save time initially but lose a lot more in $ in the long run.

      And if your 100 sites making $1 per day dream doesnt pan out, the 13 or so sites that you did manage to build and promote will make a lot more money selling a product, than selling ads.
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      • Profile picture of the author Mike Anthony
        Originally Posted by Flipfilter View Post

        This is the bullsh!t dream that propels people to keep doing something which is less likely to work.
        thats the money quote right there
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      • Profile picture of the author JoeMbulu
        Originally Posted by Flipfilter View Post

        This is the bullsh!t dream that propels people to keep doing something which is less likely to work.

        There are adsense success stories - I see posts here often from people who have a large portfolio of sites that make between $1 and $500 per day.

        But would you like to guess what percentage of people actually find success with the '100 sites per day' method? I dont know the exact answer but I can make an educated guess that its a very very small minority.

        The fact is you're statistically more likely to make more money by doing exactly the same work on 100 sites that aren't adsense than ones that are. So why go for the low hanging fruit? You'll save time initially but lose a lot more in $ in the long run.

        And if your 100 sites making $1 per day dream doesnt pan out, the 13 or so sites that you did manage to build and promote will make a lot more money selling a product, than selling ads.
        Think of adsense sites from a business perspective. How much you have to spend vs what kind of return you're able to get. I personally believe it's hard to lose money on an adsense site. You might not make millions from it, but there are definitely some things you can do to maximize your return. Think about it. Google is a multibillion dollar company and 95% of there revenues comes from Text Ads on search results. Not really too much different than relevant ads on a Adsense site. Because search engine marketing is getting more competitive by the day, prices are going up. That benefits Google and adsense publishers. I have affiliate sites in some very competitive niche and honestly I would rather get paid $10 for each visitor I send to a network than the $25 I make get per lead. I do however get $5 per click on some of my adsense sites. I've honestly contemplated shutting off my lead generation sites and seeing what kind of results I could get from adsense alone.
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        • Profile picture of the author Crew Chief
          Originally Posted by Flipfilter View Post

          Thanks Giles.

          If I could I probably would, but I think I'll add a note to the end of the post!

          Today I've learnt being controversial isn't really my thing (last time I'll take advice from the problogger book! ), but I did get what I was looking for which was a sounding board to see if I'd thought everything through.

          Justin
          Hey buddy, we live and learn...

          Giles, the Crew Chief
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          • Profile picture of the author inter123
            I am just curious to know how you are able to use the figures supplied by sellers, most of them are over inflated and not the truth.
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            • Profile picture of the author Flipfilter
              Originally Posted by inter123 View Post

              I am just curious to know how you are able to use the figures supplied by sellers, most of them are over inflated and not the truth.
              Hi Inter / Yukon,

              This is explained on the blog article.

              Statistical bias works in that when sampling from the same dataset, you can assume constant levels of bias.

              This uses several hundred transactions, from several hundred different sellers. If the numbers are all overinflated, then it's right to assume they'll all average out to approx the same level of over-inflation and what I'm looking at isn't the actual number, but the relationship between the numbers - i.e. Selling a product produces significantly more profit per person than running an ad.

              This is the thing about stats - a lot of it is down to accepting that your theory isn't perfect, but you have to make an educated decision as to how likely it is that what you've found is a positive indicator of something. In my opinion, unless your claiming that product sellers lie to a magnitude of 6+ times greater than adsense site owners, what you've suggested doesn't affect the results.
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  • Profile picture of the author AFI
    Adsense sites are easier to make. End of story. Everyone is looking for the easy way out.

    edit: HAHA we posted the same thing at the same time.
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    • Profile picture of the author waken
      Originally Posted by AFI View Post

      Adsense sites are easier to make. End of story. Everyone is looking for the easy way out.

      edit: HAHA we posted the same thing at the same time.


      I am typing faster ...
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      • Profile picture of the author discrat
        Adsense Sites are easy to build and if you target the right Niche you can get some really impressive CPCs !! Even with Google crackdown there are still some very highly successful people capitalizing off Adsense Sites.

        Another positive thing about creating Adsense Sites is that you can make one and forget about it. NO nagging emails from people upset with a Product or tons of emails asking you what your Product can do for them.

        I have switched away from Adsense Sites and am working on building Lists, Products etc..Personally I believe that is the way to go.

        But I find it beneficial to have a few Adsense Sites to add to your IM arsenal !
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        • Profile picture of the author Crew Chief
          Originally Posted by Flipfilter View Post

          I did the research here for a post due to be published on my blog this Friday.
          Sir, all you did was prove that YOU failed miserably at a proven profitable money making income stream.

          Google generated 7.3 billion dollars this past 3rd qtr; I had a piece of that pie because I know how to build and market Adsense sites to generate dollars and not pennies.

          And once those sites are built and ranked, they are on auto pilot. On the flip side, these past four days, I've received notices from six different affiliate programs declaring that I must change their links by NOV 1st or else I won't receive commissions from those referrals.

          I said that to say this; there is a trade off for allowing Adsense to handle all of the back end tasks and I'm willing to pay it.

          Once set, Adsense sites are low, low, low maintenance.

          Honestly, your missive reads like the dude who never made it into the NFL, or the dude who didn't get drafted into the Major League Baseball ... and now they spend their time haranguing the NFL and the MLB.

          Here's the bottom line; just because you failed at Adsense, doesn't mean that everyone else is also going to fail. That's just like Ryan Leaf swearing that it's impossible to be a marquee QB in the NFL. What? Are you kidding me?
          • What about Peyton Manning?
          • What about Drew Brees?
          • What about Tom Brady?
          • What about Joe Montana?
          • What about Steve Young?
          • What about the new kid on the block, Josh Freeman?
          Here's the point; Ryan Leaf failed and those others guys succeeded.

          You failed at Adsense but there is a TON of us who are succeeding TODAY, in the NOW!

          Wake up and smell the coffee Justin!

          Like any other competitive sport and business, Adsense takes brains, business acumen and brawns. Bring those tools and character traits to the table and Adsense can compete with any MMO money stream.

          You may convince noobs that Adsense is not worth it, but you won't convince seasoned veterans who know better. IMHO, you could have spent the time it took to do your research and post this thread on more noble causes.

          Oh and today is Adsense payday and it's another huge one!

          Stealing dreams today, eh?

          P.S. You should have entitled this thread...

          [For Noobs ONLY!] Follow Me As I Steal Your Adsense Dreams of Success In Spite of GOOGs 7.3 Billion 3rd Quarter!"

          Giles, the Crew Chief
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          • Profile picture of the author Flipfilter
            Originally Posted by Crew Chief View Post

            Sir, all you did was prove that YOU failed miserably at a proven profitable money making income stream.
            Sir, who said anything about me failing?

            In fact, the last line in the full post due to go live on the blog is about tweaking one of my adsense sites and making more money in two days than I did the previous week.

            I'm no adsense guru, but I'm far from failing - if you read my last blog post you'll see I hit CTRs of +20% week in, week out (the second link in my sig).

            If I write a post based on an opinion or my personal experience, it's exactly that and I'll be clear about it. This is based on a conclusion from over 400 transactions - OTHER PEOPLES transactions.

            And yes, numbers can lie, but the message here is too black and white to be ignored - Adsense, typical makes less money than any other method (Although it is the better performing of all the contextual networks).

            Giles, your NFL metaphor is amusing but I'm not speaking from the POV of someone who has failed and gone on to do something else. I create web apps and ecommerce stores now because it makes a lot more money, and If I knew what I know now, 10 years ago, I'd be a lot better off for it. There's a lot of things I still suck at (blogging for one) but the things I do learn, I ll share and hopefully it will be someone's shortcut to not enduring the crap I did.
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    • Profile picture of the author Mike Anthony
      Originally Posted by AFI View Post

      Adsense sites are easier to make. End of story. Everyone is looking for the easy way out.

      edit: HAHA we posted the same thing at the same time.
      True but the unfortunate part is that pretty much sums up why so few survive in IM. So you make them easier - so what? Now you have several sites to rank and how much time do you spend with that to get those sites to even be seen by a human beings?

      and your traffic never increases beyond the search levels because no one wants to return to your MFA site.
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  • Profile picture of the author Mark Brian
    EZA is pretty much an Adsense site and is perhaps an "authority" Adsense site :-)

    I've built Adsense sites that I never touched for years but still brings me checks.
    Its not my exclusive source of income and I'm not making a fortune out of it but I can't say I hate it.
    Frankly the only constant work I do with Adsense sites is to renew the domains and hosting (w/c can be automated too if you set auto renew :-)
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  • Profile picture of the author dirtyroger
    I agree with the origional OP, i haven't used adsense on my sites as from personal experience i never click on adsense ads when i browse the web i look for quality content so that what i aim to provide!
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    • Profile picture of the author paulgl
      There are just as many lousy sites not using adsense.

      A lousy site is a lousy site.

      Has absolutely nothing to do with adsense.

      If people are happy making $1 day as opposed to zip, who
      gives a rat's hat? You are assuming people making $1 a day on
      a website could make so much more. That's a big leap of faith.

      I'd say owning an adsense site is one of the best decisions you can make.

      Paul
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      • Profile picture of the author Flipfilter
        Originally Posted by paulgl View Post

        You are assuming people making $1 a day on
        a website could make so much more. That's a big leap of faith.
        Assuming they haven't messed up the site design and the reason for their $1 day is traffic (or lack of it), even switching to an affiliate product rather than their own product would make them more money for doing exactly the same amount of work and maintenance.

        Here's an example - a $1 / day site averages 10 visitors per day for 6 months - that's 1800 visitors whose details you don't have and will probably never return.

        That same site (which made $180 on adsense) with an average CB product (I dont have the figures on this machine so I'll have to guess but I think its $27 commission) would only have to convert at 0.6% (apparently the average) to give you over $100 more for that period, even taking into account refunds and chargeback fees. And that excludes the potential value of backend sales to that list.

        Like I said, it's not that adsense is evil; the title was deliberately a little dramatic, because this is the Warrior Forum and that's what gets attention, but the message is valid all the same - at some point, people need to explore life outside of Adsense.

        J
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  • Profile picture of the author Mangozoom
    I am happy with my fleet of adsense sites and take a longer term view.

    Agreed they do not make big amounts up front like the launch of an eBook. However I have sites that have been up a few years that bring me cash in everyday without any maintenence ... or minimal.

    For me it is a no brainer to do Adsense as part of my internet marketing mix.

    John
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  • Profile picture of the author Zeus66
    You should never put all of your income eggs in one basket - Adsense or anything else. But it absolutely is a long-term business model, unless you think Google's going down or is likely to dispense with the Adsense program. Possible, yes. Likely, not very. Still, this is a good wake-up call for those who get too focused on any one stream of income. Especially if that stream is ultimately out of your control (Adsense, affiliate marketing, etc.). You definitely want to diversify and add some streams that you have as much control over as possible. Then if you take a hit on any one of the streams, you keep on rolling instead of going belly up.

    John
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    • Profile picture of the author Flipfilter
      Originally Posted by Zeus66 View Post

      Still, this is a good wake-up call for those who get too focused on any one stream of income. Especially if that stream is ultimately out of your control (Adsense, affiliate marketing, etc.). You definitely want to diversify and add some streams that you have as much control over as possible. Then if you take a hit on any one of the streams, you keep on rolling instead of going belly up.

      John

      That I certainly agree with.
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      • Profile picture of the author Frank Donovan
        Gotta love these absolutists! :rolleyes:

        Justin, your post would have been fine if you'd just quoted your figures or described how your sites perform, but to leap from the stats you provide to such conclusive statements as that made in the thread title is absurd.

        There are so many variables concerned with successful product, affiliate and third-party-advertising monetization methods, that I hardly know where to start. Suffice it to say that many of us already do our own testing to decide on the most appropriate revenue channels - and may well conclude that sites containing only AdSense ads are sometimes the best option.

        Also, you're basing your conclusions on a limited study of one type of data - site sales. Professional site-flippers are usually concerned with achieving the highest short-term income possible. Those of us with long-term profitable sites are unlikely to want to sell them any time soon.


        Frank
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        • Profile picture of the author Flipfilter
          Originally Posted by Frank Donovan View Post

          Also, you're basing your conclusions on a limited study of one type of data - site sales. Professional site-flippers are usually concerned with achieving the highest short-term income possible. Those of us with long-term profitable sites are unlikely to want to sell them any time soon.
          Frank
          That's a valid point Frank and one I didnt take into consideration.

          The post here skips a lot, as the full article is over 2000 words long, but the sample tested included a wide range of sites, not just built to flip (in fact, anything with less than 3 months history, $30 in revenue and 250 uniques were excluded to get some of the built to flip sites out of the dataset)
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          • Profile picture of the author Crew Chief
            Originally Posted by Flipfilter View Post

            Ok Giles, I'll admit to being overly melodramatic, and yes I see your point.

            But like I said, this is the Warrior Forum and unfortunately a post with a title like "This is how I made $50,000 on Fiver" is likely to court more attention than a more played down alternative.

            I'll admit it ... it took me twenty minutes to write so I wanted people to read it even if that meant going superdramatic with the title.
            Gotha!

            Maybe you should think about changing the title???

            Just a thought.

            That said, I never compare money streams because they are all different and slightly different business models.

            Adsense is a totally different business model than writing your own software and marketing it to the masses. Additionally, becoming an affiliate of the person who made the software is different than being the vendor who is offering the software.

            Your missive is like comparing a truck, to a car, to a bus, to a motorcycle.

            They are all modes of transportation and one is not better than the other depending on the situation.

            To your success,

            Giles, the Crew Chief
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            • Profile picture of the author Flipfilter
              Originally Posted by Crew Chief View Post

              Gotha!

              Maybe you should think about changing the title???

              To your success,

              Giles, the Crew Chief
              Thanks Giles.

              If I could I probably would, but I think I'll add a note to the end of the post!

              Today I've learnt being controversial isn't really my thing (last time I'll take advice from the problogger book! ), but I did get what I was looking for which was a sounding board to see if I'd thought everything through.

              Justin
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      • Profile picture of the author Crew Chief
        Originally Posted by Flipfilter View Post

        Sir, who said anything about me failing?.
        These, [YOUR WORDS] are not the words of someone who is wining with Adsense, sir...

        Owning an Adsense Site is the worst decision you can make - I've posted the figures here to prove it
        The worst decision???

        That's like a man saying, "Getting married is the worse decision you can make... I've posted figures here to prove it!"

        Is that a better analogy for you sir?

        Giles, the Crew Chief
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        • Profile picture of the author Flipfilter
          Originally Posted by Crew Chief View Post


          Giles, the Crew Chief
          Ok Giles, I'll admit to being overly melodramatic, and yes I see your point.

          But like I said, this is the Warrior Forum and unfortunately a post with a title like "This is how I made $50,000 on Fiver" is likely to court more attention than a more played down alternative.

          I'll admit it ... it took me twenty minutes to write so I wanted people to read it even if that meant going superdramatic with the title.
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  • Profile picture of the author Emogen
    For me Adsense is one of the few viable and profitable options as a South African, exchange controls and stupid laws place most other programs out of reach or illegal.

    Even accepting Paypal is a problem, we have to clear it via the reserve bank and wait up to 10 days after losing 20% exchange tax and then another 40% income tax (and bank charges)

    EDIT: Obviously GAN is quite popular here ;-)
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