Why does PPC income seems to be down industry-wide?

[David G]

The reductions in earnings so many are reporting in the forums appears to be an industry wide issue according to my research and first hand experience. It seems to have started big time roughly the end of Sept and is ongoing thru Oct. This effects all the players and parking firms so blaming and flaming individual firms like Sedo and others I do not feel is correct.

IMO it is due to the feed providers (mostly Yahoo and Google) reducing payments possibly because of a combination of excess numbers of publishers requesting ads, and lower advertiser budgets or possibly less of them.

P.S. It's likely things will improve soon with the Christmas shopping season for some domains but there may not be any improvement at all for those with mostly business or financial websites. In fact, they more decline even more.

 

[Theo]

I will post figures showing flow of revenue 12 months ago. It does not follow the same pattern this year round. Having been with Sedo for 2+ years, my conclusion is that they became greedy and keep a much higher chunk for themselves. There is no other explanation.

 

[David G]

For those with websites, I see my direct Adsense and YPN income also down significantly over the past 4 weeks or so.

 

[Theo]

Google posted record earnings on Thursday. Friday its stock went up 4%. Another $17 up today, trading at $477 currently. So do you really think we should not be making more?

 

[stuff]

Google posted record earnings on Thursday. Friday its stock went up 4%. Another $17 up today, trading at $477 currently. So do you really think we should not be making more?

I was wondering the same thing :confused_smile:

 

[MediaHound]

You gotta be in it for the long haul. You'll laugh at todays payouts ten years from now.

 

[fatter]

when google captures more of the market they will decrease payments even more, best thing for domainers is to have 3 or more competing companies for our business google yahoo microsoft etc, a monopoly will kill us financially

 

[Theo]

Fatter, I could not agree more.

 

[kellypitts@alltel]

We have only seen income go down with Sedo and no one else.

But what you are saying does not surprise me as so many forces are at play right now I suspect - click fraud articles; Google reining in clicks out of fear of advertiser rebellion; many portfolios are being bought, so that may change the payout percentage to the portfolio-losing parking companies; Google readjustment of algorithm for domains, thereby changing the results on your parked page; doing a Google search now for a domain now brings back many results and may not include the domain searched for - that really hurts; Yahoo apparantly has been getting stricter on the domain traffic it lets in; ALSO....Blogs, podcasts, YouTube, MySpace, IPods, Video Games, other domain extensions being developed as well as competing domains in the same extension, the upcoming House and Senate elections - ALL contribute to taking away attention from our domains. I thinks this will continue. There is an ongoing proliferation of alternative things to do.

Regarding Google earinings: I think the fact that Google is posting higher earnings may be somewhat the result of them signing new deals to syndicate their ads on more media properties like CNET, CNN or whoever they get to show their ads. They have been kicking Yahoo's but in this regard.

I'm sure domainers are still part of the equation but not the whole reason for the Google stock surge. Also, the stock market is exploding anyway - so Google should rise with the high tide anyhow.

I also agree with you guys that Google dominance means less for us. Let's hope that doesn't happen.

When is this so-called Microsoft Adcenter going live for domainers? I thought it was due this fall. That is the competition we need. Even then, they are going to take some swipes at the domainers by cutting Google's base of typo traffic that many of us provide with their new software - TypoPatrol, I think it is.

It's about to get real dirty and who knows where us domainers will land. I think there's a chance we'll see our portfolios marginialized somwhat from infighting among the big three - Yahoo, Google, MSN - but as a whole they will still make more money.

All of us must hurry up and organize together, big and small portfolios, so that we have more power to negotiate, otherwise we may get walked all over by Google, etc......

Sorry if I went a little off track on this post.

Regards, K

 

[domainah]

if you would be google and yahoo etc..you pretty much know that the domain owners and other traffic providers are pretty much gonna deliver the traffic whatever they will get for it, they could lower the price they pay us by 80% and you would still send them the traffic..who else would you send it to? That industry is not any different than any other industry such as oil or pharmaceuticals in which the big players have a silent agreement on the pricing..and google and Yahoo started to figure that out..why give up 50% of a click if you get it for 10%? Especially tricky is a situation in which you have another middleman such as Sedo or Namedrive that is greedy too..

 

[Theo]

Google's stock shows the industry - in which they are not only a major player but almost a monopoly - is very healthy. Why doesn't Sedo disclose the payout percentage rates? Because they are not only high but they are dynamically adjusted! In other words, we won't make "more money"; we'll make what's allocated for that particular time-slice based on an algorithm that ensures the middleman, Sedo, is never at a loss.

Yeah, cut the fat-ass middleman out. That's what I want to see.

 

[David G]

...Yeah, cut the fat-ass middleman out. That's what I want to see.

See my post #3 above. My Adsense and YPN is also down significantly and there is no parking firm middleman involved. Many others have also reported the declines on a large webmaster board frequented more by website owners who do not use parking firms too much vs domainers who do.

 

[taboo]

Lately Adsense has been giving me loads of $0.01 clicks, and my eCPM is looking worse everyday. And I don't see any improvement from the lots of parking providers all taking their more than fair share of our revenue.

 

[fatter]

what percentage of web traffic comes from domainers and webmasters who creat sites for adsense, if yahoo and microsoft dont step up the former may have to join forces and sell adds directly i would guess at least 20 percent comes from these sources, all the big players would have to agree of coarse

 

[denny007]

I see it more as supply/demand thing. Increase of supply in ad spaces is quickier than increase of advertisers spendings. I can tell as an advertiser - in 2003 lead cost me $15, 2004 $12, 2005 $10 this year just $8 or maybe even less.

 

[mistermouse63]

1. No matter what happens to the PPC industry, I do believe in inherent value of traffic. Traffic is the most basic and yet the most fundamental resource available on the Internet. It will always have value. Monetization is just a matter of definition and those that will redifine it in the future will set new concepts and benchmarks.
2. Any economy works in cycles. Domain parking is not an exception. I agree that earnings are going down these days due to too much supply. However, potentially this is a very advantageous situation. Parking profits are going down and some domainers will need to drop/sell domains to survive. Use this time to purchase traffic domain. Sooner or later the profits will start to going up and you'll better days than ever before. This industy is expanding in a long term, however we are going to see ever less players after each contraction of the market.
3. A lot of people were used to getting high EPC. Now their profits are falling and of course they are stressed. On the other hand, domainers who always had low EPC and were concentrated on having huge traffic rather than less but more expensive traffic are not as affected by the fall in prices. Sometimes quantity is better than quality, especially during hard times.

 

[Theo]

I see it more as supply/demand thing. Increase of supply in ad spaces is quickier than increase of advertisers spendings. I can tell as an advertiser - in 2003 lead cost me $15, 2004 $12, 2005 $10 this year just $8 or maybe even less.

So you're saying Google is having record revenue, their stock jumping $120 in 40 days and at the same time they decide to strong-arm the downchannel by paying less? I fail to see any logic in that.

 

[denny007]

So you're saying Google is having record revenue, their stock jumping $120 in 40 days and at the same time they decide to strong-arm the downchannel by paying less? I fail to see any logic in that.

Numbers (just example, not real):
Advertisers spend 1 billion for 50 billions of uniques, Google takes half. Google made 500 millions, advertisers got $10 per 1K uniques.
Same period later
Advertisers spend 1.5 billion for 100 billions of uniques, Google takes half. Google made 750 millions, advertisers got $7.5 per 1K uniques.

 

[Theo]

If that's the case, it's an example of a monopoly ante portas!

A good read about Yahoo: http://money.cnn.com/2006/10/28/magazines/fortune/yahoo.fortune/index.htm?postversion=2006102810

 

[Bill Roy]

I had better say first that I have never been a convinced fan of parking so therefore my view may be jaundiced by an inherent distrust of the present system.

The 'problem' of falling EPC would be better understood if the industry was more transparent. Unfortunately the likes of the big 'middlemen' like Sedo refuse to disclose any real figures and just give out meaningless jargon like politicians before an election, all hype designed as a smoke screen.

Over the past couple of months I have taken the decision to actually develop several sites extensively (and I do mean extensively, 1,000's of pages per site). I have done this because apart from domain selling I could see no overall improvement in the short to medium term in EPC. However finding basically virgin niche sections of the internet to be filled would enable number of click throughs to increase on such sites to accumulate and not result in substantial falls in earnings. (As Denny points out above the internet sites (developed sites and parked domains) is growing faster than advertising revenue, therefore overall the EPC must fall per capita of domains/websites).

To combat this fall in projected EPC and maintain earnings there are four main routes the 'average' domainer can choose. Firstly, to group together so as to form a large enough body of internet sites that favorable terms can be negotiated with the likes of Google/Yahoo/Microsoft or create together an advertising group selling advertising directly to the end-users. Secondly, to group together and force the middlemen of the industry to the negotiating table and hammer out percentages with the middlemen being forced to take a vastly reduced cut of the 'cake'. Thirdly, develop the domains as sites in such a way that the number of adverts on the website increases as well as traffic and/or the number of click-throughs of existing adverts increase. Fourthly, as Mistermouse says above, acquire more and more traffic domains.

Unfortunately I do not see either of the first two options as readily viable to the average domainer, we are too widely spread (literally around the world) and we are too diverse in opinions and degrees of steadfastness to act in unison. I have chosen the third as it is more convenient and attractive to me personally, but it will not be so for everyone. The fourth option, by its very nature, will only be suitable to the minority as it requires the reduction in the number of domainers holding good traffic domains as these are bought up by the remaining domainers.

I am not as optimistic, as Mistermouse above, that the market is quite as cyclical as he suggests, rather I see it as a maturing market where perhaps large numbers of domainers will cease finding an economic return in parking domains, i.e. covering annual costs of domaining. This is also a natural occurance in the marketplace.

Anyway, that is my two penny worth.