Ever inventive, Google has been sending out emails to select Adsense publishers regarding a new pay for action program. This is bad news for publishers promoting Adsense.

Pay For Action Adsense

If you are reading this, you probably know what Adsense is and are using it. If not, it is a program whereby Google allows sites to place ads from the Adwords program on their site. When a visitor to your site clicks one of the ads, you get a cut of the bid price from Google. It is a simple program that surprisingly generates a significant amount of revenue.

Google is now beta testing a new version of Adsense it is calling pay for action. While Google is not providing much information, the program apparently is an attempt to convert Adsense into one giant affiliate program. Instead of paying publishers for clicks on ads, the program will only pay a commission if a person clicks on one of the ads on your site and takes the relevant action on the advertiser’s site. In this case, it appears the action is buying whatever is offered or becoming a lead. In exchange for killing the click revenue aspect of Adsense, you apparently get a cut off the commission for whatever revenue is generated by the advertiser from your traffic.

There are a number of problems with this approach. First, Google offers no explanation of how it will account for sites that list phone numbers for orders, a method used by customers that Google can’t hope to track. Second, Google has offered no indication of how revenues will be generated from sites offering services such as lawyers, doctors and so on. A vast majority of people clicking onto these sites will telephone or email the business, which makes tracking a very difficult game. Admittedly, the program is in beta testing, so Google may come up with solutions for all of these issues. There is, however, a more fundamental problem.

The pay for action program contains one inherent flaw. It eliminates the motivation of the advertiser to have a good, fast site that converts and proper customer service. All indications are the advertisers will be able to use the platform for free and only pay commissions to Google which are split with us, the publishers. If so, what motivation does the advertiser have to improve their site? What motivation does the advertiser have to satisfy customers? In my honest opinion, the answer is very little. Yes, they want to get more sales, but what do they really care if they are getting a bunch of free traffic?

If I told you I would send you 100,000 visitors a day and you had to pay me a commission only on sales, how much would you work to improve the site? Be honest. Perhaps you would work on it for a month or so, but after that human nature would take over. We all know of sites out there that haven’t been touched in years because they have so many affiliates producing tons of traffic that they can just kick back and collect cash.

I fully understand that Google is trying to deal with click fraud, click bots and so on. Perhaps the pay for action program will be the solution when it is ultimately finalized. Perhaps it will be the greatest thing since, well, Google. My experience, however, is that a majority of affiliate programs are iffy at best, otherwise I would be promoting them instead of Adsense!

Again, it is to early to draw any conclusions regarding Google’s move, but people with Adsense ads on their site should take notice. This is a fundamental change that redistributes the risks and benefits of the Adsense program. I bet Yahoo is salivating about the prospects for its Publisher Network if Google goes ahead. Personally, I planned to stay with Adsense for as long as it was offered, but have my doubts now. If I wanted to partner with other sites, I would have done it a long time ago.

Once you have made the decision to use Google Adsense, you need to consider how to add Google Adsense in your website. Here are some tips that will produce for you.

Google Adsense In Your Website

First off, you will not make $500,000 a year with Google Adsense if you have one site with 30 pages and 30 people visiting it a day. The people offering eBooks and memberships to that end are full of…stuff. Google Adsense is a program that produces over time or if you have a lot of visitors or sites. Now that I have burst your bubble, let me offer some advice on ways to do well with Google Adsense in your website.

The single most critical step to making money with Adsense is the location of the ads. Most people put them down the right column or up at the top. This approach is dead wrong because of something known as ad blindness. Ad blindness occurs when you look at the same format over and over. In the case of the net, most people filter out the ads on the top, right column and bottom of a page. After looking at hundreds of sites and results on search engines, they know those listings are advertisements. You, my friend, must avoid ad blindness.

The best way to get past ad blindness is to put the ads in unexpected places. In this case, you want to place them between the paragraphs of text on your site. Few sites due this, which is pretty surprising. This placement is perfect for maximizing clicks because it is in the natural flow of the text. Readers will inevitably read the text ads and click anything they might be interested in. This conclusion is also supported by the fact that people do not read the entire article or page on a site. They usually only make it through 50 to 80 percent because they find out what they want. If you place ads at the bottom of the page, they are never going to see them.

The second biggest issue is the type and color of the ads. First, try to stick to text link ads whenever possible. Nobody clicks banners because they are worried about getting caught in popup hell. As to color, some believe your ads should stand out while others believe they should blend in. Personally, I am with the blend in group. I try to make my ads blend into the overall color of the site and it seems to work fairly well.

Placing Google Adsense in your website is simple, but should be done with some thought. Avoid the top, bottom and right column of the pages. Try to place the java script in between paragraphs of text and experiment with different colors to see how it does. Ultimately, you will find a solution that returns solid click thru rates and generates revenues month after month, year after year.

Recent changes in the Google Adsense program has many online website owners and marketers seriously concerned. Many have seen their Adsense profíts and income flatline… seen their four or five figure monthly Adsense income disappear overnight. For many the Google Adsense bubble has burst.

What happened?

First, Google made a change in its Adsense program, letting advertisers choose between putting their ads in the search results or on the content pages of Adsense publishers. Search won out and started to receive the higher bids. Search results convert better than content ads Next, Google has cracked down on Junk Adsense sites, like they should. These sites consisted mainly of software generated re-hashed search engine links and were totally annoying to say the least. But Google also cracked down on ‘squeeze pages’ or ‘affilíate landing pages’ – a lucrative source of income for many online marketers, mainly because these pages helped marketers build an opt-ín list or use permission based email.

The results of these changes produced an Adsense meltdown for many online marketers.

Some Internet marketers are speculating recent changes could even mean the death of Adsense. One online marketer, Scott Boulch even published a free report entitled ‘The Death of Adsense”.

Many affilíate marketers would agree with Boulch on some of his points, especially the obvious fact that using Adsense on your web content is starting on the bottom rung of the online marketing ladder. Instead of receiving pennies per clíck with Adsense, alert marketers and webmasters have already discovered that by using CPA (Cost-Per-Action) and direct affilíate links, they can produce significantly more revenue from their web pages. Why eärn pennies per clíck when you can eärn $5, $10 or OVER $100 per clíck?

But the fine people at Google are catching on…

In the past Google has made its own swing to the Cost-Per-Action direction with its referral system for the Firefox Browser and giving webmasters credít for signing up Adwords and Adsense accounts.

Many online marketers believe Google needs to expand on these baby steps and open their Adsense affilíate program up to third party products/advertisers. In a recent company statement Google offered some hope: “We’re always looking for new ways to provide effective and useful features to advertisers, publishers, and users,” the company stated “As part of these efforts we are currently testing a cost-per-action (CPA) pricing model to give advertisers more flexibility and provide publishers another way to eärn revenue through AdSense.” Basically, in cost-per-action, advertisers pay for leads, purchases or customer acquisition. It would help with the clíck fraud issue and the monetary returns could potentially make Adsense’s revenues pale in comparison.

As more and more commerce goes online… acquiring customers for such diverse services as ínsurance, real estate, telephone, marketing, web hostíng, travel, mörtgage loans, cable TV, banking… you name it, almost any service or product sold in the marketplace is now turning to the Internet for customers and lifelong clients.

Enormous sums of monëy will change hands. Perhaps, the most lucrative of these is customer acquisition. Advertisers are turning to the Internet and webmasters/marketers for acquiring these lifelong customers for their respective services and products. Businesses and companies are quickly realizing paying an attractive lead generating fee/commission is smart business. They quickly build a client base for their services or products and quickly recoup their expenses – realizing in the long run these leads will generate huge profíts.

It can also mean huge profíts for the CPA networks like ValueClick’s Commission Junction and Rakuten’s LinkShare who supply the advertisers with publishers and website marketers to harvest these leads. It can be a lucrative venture for all involved, especially for those online marketers who have cornered the search engines for lucrative niche markets in big ticket items. Even small ticket items pay quite well for those marketers who know how to market online.

Contextual advertising is fine, but CPA (Cost-Per-Action) will offer much better returns for the website owner. Making any profitable site much more profitable. It will and is opening up a whole area of marketing opportunities that nevër existed before we had the Internet. Creating a complex structure of advertisers, publishers and the Affilíate/CPA companies that connect the two.

Of course, cutting out the middle man has always been even a more profitable venture for most marketers. As more and more webmasters realize they can make much more with dealing directly with companies, rather than going through a middle process like Google Adsense or the countless other affilíate/CPA networks … online marketers can reap even bigger rewards.

For an online marketer when you get a telephone call or email from the CEO or the affilíate manager with a company or service you’re promoting with your website – you know you have made it! Dealing directly with a company usually means bigger commissions and special exclusive deals just for you or your sites.

Only fly in the ointment, all that extra paperwork and business wheeling and dealing. Many marketers and website owners like the idea of someone else handling all the tracking, collecting payments, promotional materials… they just like to sit back and build more websites and content. It gives the affilíate marketer a lifestyle that they are looking for on the web. They just like to market and promote with their sites and let someone else worry about the details. Therefore, there will always be a place for contextual ads like Google Adsense… “Rumors of my demise have been greatly exaggerated.”

However, could CPA be a better alternative for the current Adsense contextual ads?

Google would be the natural choice for a middleman if there ever was one. Besides, many savvy marketers know the Google brand name is trusted online, any product/service promoted through Google would be an easy sell. Many argue Google already dominates the web, why should it not be the one to handle these CPA transactions through its Adsense program.

On the flip side, over countless updates and changes to its indexing, many webmasters have experienced more than a few negative dealings with Google. Many have won, many have lost in this Google Age, but all have realized riding the Google Search Engine is like running with the bulls at Pamplona, totally thrilling unless you’re one of the unfortunate few who get trampled in the process.

When people hear about online marketing, they often think of two of the more popular methods that a company can use to enhance its visibility on the Web: organic search engine optimization and pay-per-click advertising.

In an ideal world, you would use both strategically to maximize your site’s profile. However, budgetary constraints often make this impossible, and trying to do both on a limited budget or with minimal resources can result in neither campaign producing ideal results. In this case, it’s usually better to focus on one or the other. But which is best for you?

Organic Search Engine Optimization

Organic search engine optimization campaigns offer several distinct advantages over pay-per-click advertising campaigns, as many recent studies have shown. What follows is a brief listing of some of the findings.

Propensity to Click

Study after study indicates people are less likely to click on paid search ads rather than on results from organic search engine optimization. For example, one study found that search users are up to six times more likely to click on the first few organic results than they are to choose any of the paid results[1], while an eye tracking study[2] showed that 50 percent of users begin their search by scanning the top organic results. Other studies have shown that only 30 percent of search engine users click on paid listings, leaving an overwhelming 70 percent who are clicking the organic listings.[3] And a 2003 study found that 85 percent of searchers report clicking on paid links in less than 40 percent of all of their searches, and 78 percent of all respondents claim that they found the information they we searching for through sponsored links just 40 percent of the time.[4]

Trust

Studies are beginning to indicate that the trust level for organic results is much higher than that of paid results, and that paid results are looked upon as a nuisance by some searchers. One study found that only 14 percent of searchers trust paid listings, and 29 percent report being “annoyed” by them.[5] Another study found that 66 percent of customers distrust paid ads.[6] Clearly, it’s not generally a good idea to upset potential customers before they even click on your link.

Value of Visitors

Organic search engine results tend to be seen as non-biased, and they therefore are able to provide visitors that are more valuable. The overall conversion rate, or the rate at which searchers take a desired action on a site, is 17 percent higher for unpaid search results than the rate for paid (4.2% vs. 3.6%).[7] Trends also have shown that more of the sales that result from search engines originated in organic search listings.[8]

Visitors Becoming More Aware of Pay-Per-Click as Advertising

As more and more people turn to the Internet for research and information, more searchers are becoming aware of paid results as a marketing tool. One study showed that not only are 38 percent of searchers aware of the distinction between paid and unpaid results, 54 percent are aware of the distinction on Google, which is widely recognized as the most popular search engine.[9]

Pay-Per-Click Costs Rising

Meanwhile, pay-per-click costs are rising steadily. Between October 2004 and December 2005, average keyword prices rose from around $25 to just under $55.[10] And the cost of keywords can increase by as much as 100 percent during the holiday season.[11] These costs aren’t going unnoticed either; one study of problems experienced by U.S. companies found that 57 percent of respondents felt that their desired keywords were “too expensive,” while 51 percent expressed concern that they are overpaying for certain keywords.[12] On the other hand, when you outsource to an organic search engine optimization firm, your costs will likely remain more stable than the prices for pay-per-click advertising.

Long Term Results

While a pay-per-click campaign may produce results more quickly than an organic search engine optimization campaign, organic search engine optimization campaigns can give you results that last. When the budget runs out for a pay-per-click campaign, or when your company decides that the pay-per-click campaign should be terminated, the results end as well. With organic search engine optimization, the optimized site content and other changes made to your site can have an impact on your search results until the next change in a search engine’s algorithm, or possibly even beyond.

Relevance

Users also have rated organic search engine results as more relevant than paid results. On Google, 72.3 percent felt that organic results were more relevant, while only 27.7 percent rated paid results as more relevant. Yahoo offered similar results, with 60.8 calling organic results relevant compared to only 39.2 percent for paid.[13]

Pay-Per-Click

While the above statistics may make organic search engine optimization seem the clear choice in all cases, in certain situations it actually can make more sense to do pay-per-click advertising. For those looking for fast results on a small budget, a pay-per-click campaign may be the answer.

Results

As previously stated, the results from pay-per-click advertising are immediate. On the other hand, an organic search engine optimization campaign may take up to three months or more for results to be apparent. In this case, pay-per-click is advantageous for those who are looking to promote an initiative that will go live in a short amount of time, or whose business is seasonal in nature and who only do promotion during certain months of the year.

Budget

Small businesses with extremely tight budgets may find that pay-per-click is a better investment than organic search engine optimization because a pay-per-click campaign will almost always cost less – good search engine optimization companies simply do not work for $100 per month. By limiting a campaign’s keyphrases to highly specific terms relevant to a company’s business, there will not be a large amount of traffic generated, but the traffic that is generated will be specific to the desired result. Plus, choosing such specific phrases can make them less expensive on a per click basis. Moreover, in niche markets with a high average dollar sale, where there’s not a great amount of search activity because the prospect pool is limited, it may not make sense to engage a quality organic search engine optimization firm at several thousand dollars per month when you can instead buy varying niche-specific keyphrases and generate traffic in that way.

Easier to Handle In-House

Non-complicated pay-per-click campaigns can be handled much more easily in-house than an organic search engine optimization campaign. Such campaigns generally involve business to business and high-end, service oriented companies, not those geared toward a large consumer base. Since organic search engine optimization requires a steep learning curve and since there are so many questionable tactics that can put a site at risk of penalization (the tactics that neophytes to search engine optimization are likely to use), it may make more sense to run a pay-per-click campaign. Since you are dealing directly with the engine, i.e., Yahoo Search Marketing and Google AdWords, you don’t need to pay a middleman, and these sites offer helpful tutorials on how to use pay-per-click marketing. Perhaps most importantly, the concept of pay-per-click is much easier to grasp and understand at the outset.

No Contracts

Most organic search engine optimization campaigns require a contract of a certain length because SEO companies know that meaningful results will rarely happen overnight. When dealing with an in-house pay-per-click campaign, obviously a contract is not an issue. But in general, even when you are dealing with an agency, you will not tend to need to sign a contract because the agency instead makes money on a percentage of the spend, although there may be a setup fee. Without a contract, you are free to reallocate marketing dollars elsewhere if you discover that the pay-per-click campaign is not providing the desired results.

Conclusion

Clearly, organic search engine optimization has some distinct advantages over pay-per-click advertising. However, there are undoubtedly certain situations and scenarios where pay-per-click advertising makes more sense fiscally and strategically. With a high enough budget, you would be able to have an effective organic search engine optimization campaign running in tandem with an effective pay-per-click campaign. But if you have to choose one, look into your unique situation before you decide.