Google AdSense: What It Is And How To Make Money
You didn’t start blogging to earn extra cash, but now you’ve got a nice following. Why not make money off of your passion project?
While Google AdSense isn't the only advertising service that lets you monetize your blog, it’s the one you’ve most likely heard of. But how much you make is subjective and anything but simple.
What is Google AdSense?
Google AdSense is an advertising program you can use to make money on content such as blogs, websites or YouTube videos. Clients pay to advertise through it, and you get a piece of that revenue by hosting ads on your site or channel. Signing up for AdSense is free.
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How AdSense works
First, Google has to approve your website. Google doesn’t disclose its metrics for approval. But if your site has unique content and complies with AdSense's policies, you’re good to apply. You must be at least 18 years old.
Once you get approved, you can arrange for ads to appear on your site. You can choose which types of ads run and where on the page they will appear. But the companies that show up on your site bid for their right to be there.
AdSense lets its advertisers vie for space on your website based on your content, as well as how likely they are to get clicks on their ads from visitors. Google determines the latter through the advertiser's "quality score." Two factors are at play here. One is the click-through rate, or CTR. This is the percentage of visitors to your site that Google thinks will click on ads.
The other is a group of what Google calls “factors affecting the quality of user experience from viewing the ad.” Google doesn’t disclose what these are, but according to its help site, the relevancy of the ad and landing page experience are key.
How much does AdSense pay?
Advertisers look at the elements mentioned above and estimate what's called a cost per click, or CPC. This is how much they'll pay every time someone clicks on an ad from your site.
Think of your website as a landscape painting you’ve put up for auction. An auction house agrees to put it up for bid to landscape painting collectors. The higher quality the painting, the more competition there will be, and the more money you’ll get.
Because Google doesn’t release all of the metrics it uses, it’s hard to project how much you'll actually make. But as a hypothetical example, let’s say you get 2,000 views on your site in a month, and 1.5% of those people click an ad — that’s 30 clicks. If an advertiser submits a bid of 75 cents per click, you would see up to $22.50 for that month.
Create a money-making strategy
With income so dependent on these factors, it helps to have some strategy. Google has its own tips for making more money with AdSense, but here are a few guidelines:
Focus your content
If you post original recipes but also use your blog to do personal journaling, split the site in two and monetize the one with more focused content. This will make it easier for advertisers to match ads to your site. Focusing your content also will help you show up when people search on Google. If someone searches for “best chocolate chip cookies,” he or she is more likely to click on the headline “Best Chocolate Chip Cookies - DanCooks” than “Dan’s Cool Chocolate Chunk Cookie Explosion Recipe." Then, if your recipe is straightforward and your voice stands out, people will stay to read it.
Advertise yourself
Your website becomes more attractive to advertisers if people who visit intend to browse for a while. Social media presence is great for free traffic. Updating Facebook pages, Twitter and Pinterest whenever you post is a good place to start. If your following is big enough, look into sending out a newsletter.
Place ads in visible places
Advertisers want people to see their ads, and you want people to see your content. It's difficult to solve for both, but usually one or two ads placed in plain sight will do the trick without taking over your page. This is one of the hardest things to get right, so don’t be afraid to play with ad placement over time.
Don’t break the rules
Google has a few guidelines that allow it to disable AdSense on your site. Most of the guidelines are aimed at people who make content with the purpose of getting as much money from AdSense as possible, not at people with a good product or one they're passionate about. This includes posting hate speech, advertising fake goods and posting copyrighted material. Check out Google's policies to make sure you aren't violating them.
These tips won’t work if you don't enjoy working on your site. You’ll find it easier to focus your blog and advertise if you’re creating something you believe in. If you end up focusing more on revenue than you want to, you can dial back the ads for a bit and take a breather.
Google Is Placing Ads Next To COVID-19 Misinformation On Conspiracy Sites
Google’s programmatic ad tools AdSense and DoubleClick are placing ads on websites that publish health misinformation, according to reports from two independent research groups.
By allowing these sites to monetize, Google is helping to spread health misinformation and profiting at the same time, argues Daniel E. Stevens, executive director for the Campaign for Accountability, a nonprofit that publishes critical research about tech giants through the Tech Transparency Project. “Despite its public commitments, Google is not going to turn off the firehose of advertising dollars that flow to snake oil salesmen promoting misinformation about the coronavirus,” Stevens said in a statement.
Independent researchers at both the Tech Transparency Project and the Global Disinformation Index have published reports detailing when and where Google placed ads next to health misinformation on third-party websites. In its report, the Tech Transparency Project identified 97 websites that habitually publish false information and use Google ads to generate income. The Global Disinformation Index publishes monthly reports of ads placed on conspiracy theory sites. In March, the Global Disinformation Index found 1,400 sites spreading COVID-19 misinformation in Europe earned a collective $76 million from ad tools, with the majority of it coming from Google. Both institutions say that Google is profiting off health conspiracies while publicly committing to fighting COVID-19 misinformation.
Google representative Christa Muldoon says, “We have strict publisher policies that govern the content ads can run on. We specifically prohibit publishers from misrepresenting themselves or their products and have also taken an aggressive approach to COVID-19 content that causes direct user harm or spreads medical misinformation. When a page or site violates our policies, we take immediate action and remove its ability to monetize.” In this case, the company says, the websites or articles where it placed ads did not violate its policy.
One Medical has now blacklisted the site. “One Medical works hard to be a continued source of reliable, clinically vetted information on important healthcare topics, including COVID-19, and we take the fight against misinformation seriously,” the company tells Fast Company. In addition to One Medical, Google placed advertisements for AAA, AARP, Coronavirus.Gov, Geico, Lending Tree, Subaru, UNICEF, and The United States Forest Service next to health misinformation.
Some argue that anti-vaccination content fits that criteria. A few studies from the late aughts show that even though anti-vaccine videos may not be plentiful, they are often popular and can affect decision-making. In a 2018 study on how anti-vaccination propaganda can affect one’s decision to vaccinate, researchers write, “online access to false anti-vaccination information just cannot be understated in examining the rise and spread of the anti-vaccination movement.” In its conclusion, the paper notes that the rise of the anti-vaccination movement poses a “dire threat” to public health and heard immunity.
Last year, the World Health Organization named vaccine hesitancy or “the reluctance or refusal to vaccinate despite the availability of vaccines,” one of its top 10 threats to global health, citing spikes in measles cases in the U.S. And Europe. It could also spread ambivalence about future vaccines. A recent PEW survey reports that though a majority of people would get a COVID-19 vaccine if it were available today, a surprising 27% of Americans would not.
For example, Google may ban certain content from YouTube, but allows websites with that same content to monetize it on its ad network. In May, Google took down conspiracy theorist David Icke’s YouTube channel for making unproven claims about COVID-19. However, the company continues to place ads on his website. The Tech Transparency Project found a Google advertisement for cybersecurity company Palo Alto Networks on Icke’s website next to a video pushing false claims about the virus. The organization also found Google ads next to video interviews with Icke on Activist Post, another conspiracy theory website.
For brands that don’t want to be associated with health misinformation or conspiracy theories generally, Google’s choice to keep such sites in its network creates a recurring issue. Keeping up with fake news sites is hard work. A representative for One Medical says the process for monitoring where its ads appear is largely manual. The company reviews sites where its ads have been placed and then blacklists sites that publish health misinformation so that its ads don’t continue to appear there. One Medical ads are targeted to individuals, the company says, rather than specific sites. That means some ads may appear on sites visited by people One Medical is trying to reach.
“We regularly monitor for emerging sites and sources of misinformation and blacklist these websites from our advertising to prevent the spread and support of misinformation. This is part of our ongoing effort to flag and take quick action to minimize instances where our brand is displayed alongside inaccurate, malicious, offensive, or illegal content,” a spokesperson for One Medical says. Both AARP and UNICEF say they have revised their ad buying policies as a result of these reports.
How Google Makes Money (GOOG)
Google is well known for its popular search engine, email service, web browser, and various online tools we use daily at work, at home, and on the go. What many don’t think about day-to-day, however, is that all of these services are free. So how does Google make its money?
Parent company Alphabet (GOOGL) released Q4 2019 earnings with $46.075 billion in revenue, according to its website, which stated, "These numbers range from October to December, and includes the busy holiday shopping season for Made by Google’s hardware efforts."
Google Ads and Search Advertising
The bulk of Google's 162 billion dollar revenue in 2019 came from its proprietary advertising service, Google Ads.
When you use Google to search for anything from financial information to local weather, you’re given a list of search results generated by Google’s algorithm. The algorithm attempts to provide the most relevant results for your query, and, along with these results, you may find related suggested pages from a Google Ads advertiser.
Key Takeaways
Google’s AdSense program allows websites not affiliated with Google to use Google display advertising on their sites.
A large portion of Google's revenue comes from advertising.
Google also makes money on its cloud-related businesses such as the Google Cloud Platform.
To gain the top spot in Google advertisements, advertisers have to outbid each other. Higher bids move up the list while low bids may not even be displayed.
Advertisers pay Google each time a visitor clicks on an advertisement. A click may be worth anywhere from a few cents to over $50 for highly competitive search terms, including insurance, loans, and other financial services.
Google's ads advertisements integration touches almost all of Google’s web properties. Any recommended websites you see when logged into Gmail, YouTube, Google Maps, and other Google sites are generated through the advertising platform.
AdSense Network
In addition to featuring search advertising on its sites, Google’s AdSense program enables non-Google websites to incorporate Google display advertising on their pages. AdSense ads work similarly to Google’s onsite advertising but are displayed on Google-approved sites anywhere on the Internet.
When a visitor clicks on a display advertisement on a member website, a portion of the revenue is paid to the site owner while Google keeps part of the fee. Due to the breadth of companies advertising through the network, entire businesses depend on AdSense as their primary source of income.
Other Revenue
The rest of Google’s 2019 revenue came from an assortment of non-advertising related projects. These initiatives include a diverse set of projects from both online and offline businesses.
Included in the list of “other revenues” is income from related online, media, and cloud computing businesses such as the Play Store, Chromecast, Chromebooks, Android, Google Apps, and the Google Cloud Platform.
Past offline projects include Google’s famous self-driving cars, Google Glass, and an investment in a solar power plant in the Mojave Desert. Analysts have criticized Google’s investment in these projects, as mounting expenses from non-core businesses cut into profit margins for the entire company.
Major Misstep: Motorola Mobility
Just because Google’s advertising business is a revenue cash cow does not mean the company is without faults. Google’s largest financial mistake in recent years was the $12.5 billion purchase of Motorola Mobility in 2011.
By January 2011, Google had become the owner of the world’s leading smartphone platform thanks to the success of its Android operating system. Although Google already participated in the mobile market as a software vendor, the company made a $13 billion bet on Motorola Mobility. Google believed it could grow Motorola’s handset business through a natural synergy with the Android software development team.
This deal turned out to be the biggest flop in Google history. It led to a major $9.6 billion write-down when Lenovo bought Motorola Mobility from Google for $2.91 billion just two years after the acquisition, as reported in the media. For its efforts, Google retained ownership of a majority of the 17,000 patents gained through the acquisition.
The Bottom Line
In 2019 Google was up 18% year over year and up 20% on a constant currency basis, according to information released by Ruth Porat, the chief financial officer of Alphabet and Google.
While other business segments contribute billions to Google’s income each year, Google makes most of its money through online advertising. Despite the company's investments in other ventures, the tech giant's presence in the online advertising space does not appear to be changing anytime soon, nor does its strong revenue growth.
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