On.. Google AdSense and Website revenue streams.

Well seeing as we’re in the new renaissance of the moneytised web I thought it was worth doing a bit of a brain dump on something that has been bubbling around my head.

I, along with a lot of other developers, would like to make money out of website developments we have done, not just as a client-customer relationship, but to take one of our own ideas and see it come to completion and launch. There are of course many hurdles to this, time, project management, development and a hundred and one other things you won’t have thought of. I’m only going to talk about one thing, and that is money.

There are a number of things I want to say, but I’ll start with one today, as I’m sure it is a topic I shall be revisiting.

Google AdSense alone is not a valid long term revenue stream

Google used to be a search engine, it is now an advert aggregator, oh it still does the search stuff, but its main business focus is its advertising. It manages to get all these adverts out on the web by supplying AdSense tools for people sites. This can be a reasonable income from what I’ve read. However if you have a business on the web, whatever it is your site does, and if you are supporting that business by AdSense you are effectively reducing your business to a Google Advertising reseller role. This is find if that is the focus of your business model, if it is not, then read on…

Now Google is making money off the advertising space it is selling on your site. Why aren’t you capitalising on this same space you are selling and powering it with your own adverts? Your mark up will be more, you will have hard numbers to take to potential advertisers to show them the benefits of advertising on your site if you’ve been on the AdSense program for a while. You can build up good relations with your advertisers which can have some good long term benefits.

The other thing about AdSense as a revenue stream for the long term is that you will need more than one revenue stream. If you look at any business they will have multiple revenue streams, I spent some time pondering this and I can’t think of many successful business that have only one revenue stream (I await correction in the comments). Traditionally you would think a shop has one stream of income, ie selling stuff. However they have multiple streams of income, each product they sell is an income, so if the potatoes aren’t selling then maybe the carrots will, or the cabbage, they can then tailor their business around what sells within the confines of there core business. This is easy to think about if you business is selling products, however it gets a bit more complex when contemplating service related businesses.

If you think of your service as a product subscription based system you immediately have a revenue stream over and above the AdSense, if you think of having different strata of subscriptions (1 month, 3 month, 12 months for example) then you can discover more about what your users want from the system, and how they use it, lots of people buying short subscriptions show you how your users are thinking of your site, whatever it may be. The same is true if they all bought longer subscriptions. One of the nicest subscription based systems I’ve seen is the Proboards one where you can have your free forum for as long as you want, but if you want to turn off the adverts, then you pay them. They are replacing their lost income from effectively anonymous forum owners with the subscription fee, however of more value is the fact they are building up a relationship with their users, a relationship they can use to push new products. In the world of the anonymous web, building up that customer relationship can be hard, you need to give your customers added value for spending their money on your product/service, however you will be rewarded with a long term relationship with your user base.

By diversifying your revenue stream beyond AdSense it means that if one day Google gets the plug pulled on it, or stops doing AdSense your business won’t be relying on their business existing for all of its revenue, just a certain percentage. Symbiotic relationships can be very useful in business, but they can be very dangerous if the ceasing of one company will spell the end for the other, business relationships should be beneficial, not dependant. Being more in control of your revenue streams also gives you more of a chance to find ways to increase your revenue, without having to tailor your site to the whims and fancies of the AdSense/AdWord system. Adsense is a great way to getting a site to offset its basic running costs when you start up, however a mid term business aim should always be to get the AdSense off your site, or at least have them running in parallel with another revenue stream.

It seems others have more musings on this very subject as well.

*Edit*

Seems that all is not well in the world of online advertising full stop, although Scobleizer believes that Google AdWords/AdSense already has a glowing future with text ads.

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3 Responses to “On.. Google AdSense and Website revenue streams.”


  1. 1 Thomas September 19, 2006 at 10:38 am

    http://money.cnn.com/2006/09/18/technology/quigo/?postversion=2006091812

    -> a different view on how to add Ads to the overall online experience.

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