November 2nd, 2008 Add Your Comments Bookmark and Share

Amongst the various financial doom and gloom that is abound at the moment there is a large ray of hope for internet marketers. The second dot com bust doesn’t look like it’s going to happen just yet! Online marketing figures are still growing. However I have a word of caution for you.

I live on an Island that has a booming economy. No signs of a recession here, inflation is still running at over 6%, unemployment at less than 1.8%. In the last 12 months our ministers have come out publicly and announced that the current world crisis “will not” effect us. They were in fact full of crap. Of course it would effect us, the financial crisis will be affecting us all in one way or another. They have now changed their tune and admitted that things will become difficult over here. A local bank went under and the shit hit the fan. The final result of the current controversy could destroy our number one industry. Not bad considering it “will not” effect us! If I was you I’d be planning for things to get worse online at some point as well.

Adsense is my biggest earner and it is the easiest way for me to see changes. Several changes are already starting to be seen. If you visit any of the webmaster style forums you’ll see that there has been a huge increase in Google banning domains from showing Adsense. Many many more publishers are getting warnings. This isn’t anything to do with a change in Google’s policies, it’s just a case of them enforcing them so that they are seen to be giving the best possible value to Adwords advertisers. After all, Adwords advertisers are what drives Googles whole business. When you and I get an Adsense payment, it’s not Google paying us, it’s the Adwords advertisers who have paid for the adverts that show on our sites. If these advertisers (businesses) don’t think they are getting the best value then in times as hard as these then it’s an easy decision to consolodate their spending and pull back.

I’m already seeing some signs of this pulling back. I operate in a number of top end business niches that easily attract high value adverts. $1-$3 per advert click is quite normal and has been for years. However in the last couple of months I’ve noticed that the value of these adverts is not the same. The advertisers are obviously cutting their bids and that affect both me and Google. However I’m not really too worried by this. High value services like this don’t attract huge amounts of traffic so in turn the actual revenue isn’t that high. And this is where I’d like to mention the good news. At the lower end I’m not really seeing any difference. Niches that attract $0.10-$0.50 per click have remained steady. In fact I had one of my better Adsense days just last week, topping out at well over $300 for the day!

I don’t think there is any doubt that the credit crunch is affecting online advertising although we’ll probably not see the full effect quite yet. We are down the line and it will take a while to filter through to the lower end businesses. But it’s not all doom and gloom. Marketing online has become so popular because it provides businesses with an amazingly good ROI. As long as Google carry on doing what they are doing, filtering the wheat from the chaff then as long as you’re playing by the rules and creating quality/useful content then I don’t think we’ve got anything to worry about. Certainly not in terms of your Adsense earnings.

Related Posts

Paul B