In a recent development, Google has unveiled a significant alteration in its payment structure for AdSense publishers. The company is shifting away from the traditional pay-per-click model and adopting an exclusive pay-per-impression approach. The transition is scheduled to take effect in early 2024, as disclosed in an official announcement.
This modification will not adversely impact most publishers, with Google assuring that their earnings will remain largely unchanged.
Google has outlined two key changes in a blog post on the AdSense blog:
- A revision to the revenue-share structure.
- Publishers will now receive payments based on impressions.
Historically, AdSense publishers have received 68% of the ad revenue. Under the new payment structure, this percentage will continue to be the benchmark, as per AdSense.
The rationale behind this shift lies in splitting the AdSense revenue share into separate rates for both the buy-side and sell-side. For AdSense for content, publishers will receive 80% of the revenue after accounting for the advertiser platform’s fees, whether it’s Google’s buy-side or third-party platforms. To elucidate, when Google Ads purchases display ads on AdSense, Google Ads retains an average of 15% of the advertiser spend.
For instance, if an advertiser spends one dollar, Google Ads retains approximately 15 cents, leaving 85 cents for AdSense. From this 85 cents, Google AdSense takes a 20% share, equivalent to 17 cents. This leaves the publisher with 80% of the remaining 85 cents, amounting to 68 cents. Google has provided a visual representation of this new payment model.
Crucially, Google AdSense ensures that this new payment structure will not impact the type or volume of ads displayed on publisher websites. The aim is to align AdSense with the industry standard of paying per impression, providing publishers with a more consistent method for monetizing their ad space across various Google products and third-party platforms.
Unsurprisingly, the announcement has evoked mixed reactions from AdSense publishers, as seen in discussions on platforms like WebmasterWorld. Some remain cautious, advising a “wait and see” approach. Others are more skeptical, suspecting that Google’s motivation behind the change is to increase its own revenues.
Conversely, some believe that the pay-per-impression model may encourage publishers to inundate their pages with more ads, potentially neglecting the quality of content and its relevance to advertisers. This shift could challenge the traditional model where advertisers rely on audience clicks to initiate or continue the customer journey and drive conversions.
Ultimately, publishers are apprehensive about moving away from a user-friendly ad placement strategy to one focused on maximizing impressions. The consensus is that the change is primarily driven by Google’s desire to enhance its profitability.
However, there is a silver lining for publishers. The pay-per-impression model ensures that they receive compensation for displaying ads, even when clicks are minimal, offering predictability and proportionality to their efforts in content creation and audience engagement. For some publishers, this approach may yield better results than the traditional pay-per-click model.
As the transition unfolds in early 2024, publishers will undoubtedly closely monitor their revenues to assess the true impact of these changes. For more detailed information, you can read Google’s official announcement on the updates to AdSense monetization.