When adsense isn’t worth it

July 11, 2010 | Filed under: business

I was reading an article on a games blog recently, and noticed our ever-present strobing friend, the ‘evony’ ad.* Apart from the ubiquity of the ad, and my lack of interest in ‘saving my queen’, what I really noticed was the prescence of a google ad on such a low traffic blog.

I can see how a lot of people would think it makes sense for people to stick small google adsense (or similar) ads on their blog, or maybe even their indie developers website to ‘bring in some cash’. I think it’s a bad idea. (I am selling stuff too, and need money, but ads on a site can be a step too far. My games are here, feel free to buy one to support my blog, I won’t mind :D)

There is a tradeoff happening here. You are basically giving up a bit of your creation (in this case, screen-space on your website) in return for some revenue. I think a lot of people get the calculations dead wrong.

Does your site get 10,000 page-views a month? That’s a ‘not bad’ amount of traffic for someone who is actively trying to build a web business (although positech gets more :D). If all of those 10k impressions result in an ad view, then that’s 10 CPM, as the hip-cats say online. How much is a CPM costing an advertiser?

I actually pay about £0.20 for a thousand impressions when I buy ads. So assuming you get that, and google takes 70%, you get £1.40 a month in ad revenue, or not enough to buy a coffee. If you are not based in the US, currency conversion swallows the first 6 months income.

Is it worth it? I reckon not. The point of my rant, is not to say that it isn’t worth it for people running those ads, it may well be worth it. You might get more than 70%, or a higher CPM, or way more traffic. But have you done the math? Is that banner ad on your website actually making any vague economic sense?  The big name popular, succesful and much loved games studios don’t stick an adsense banner on their site, and it just reminds people that you aren’t in the same league when you do it. If you can make the numbers make sense, then fine, but it really is worth checking the numbers.

* I know about adblock, but I tend to leave it off. Some websites really do run purely from ad revenue, and I’m happy to support that, unless it’s entirely overdone.

13 Responses to “When adsense isn’t worth it”

  1. […] Original post: Cliffski's Blog » WHen adsense isn't worth it […]

  2. […] Cliffski's Blog » WHen adsense isn't worth it […]

  3. CountVlad says:

    I don’t have adverts on my site, mainly because I feel it makes it look unprofessional, but also because I know I’m not going to get enough hits to make it worthwhile.
    I appreciate that some sites need to show adverts if they are offering lots of free stuff, but some can totally overdo it. There have actually been one or two sites that I’ve stopped visiting alltogether because the ads were so intrusive.
    I like the idea of putting ads on the loading screen of flash games. It gives you something to look at while you’re waiting for it to load and disappears when it’s loaded, so it doesn’t distract you when you are playing.

  4. I actually made that experiment partially based on your comment. My result after a month is that I lost money. Not a lot since I don’t get a lot of traffic (about 10k) but I I lost about $50. That might look ridiculous but it does pay for 1 server (forums and Joomla website) each month. Since my game is not a game able to make me a salary it means something.

    My traffic might not be the same as most downloadable games as my game is a free online game. You can play for 3 months and never spend a cent but I still have to pay for you to play. If I was receiving more traffic I have numbers that are telling me the game would make a nice profit (an ARPU of a little more than $1).

    The typical thought is that usual visitors don’t even notice ads anymore. Strange thing is that each time there is a new ad running I see my revenue raise a bit. It’s not big amounts but still it means I have a machine that is paying for itself.

    The theory that people are leaving my website to check that other game might be true. But on 10k visitors I don’t have a 100% conversion rate either or not even a 30% conversion rate. If I had that I would have quit my day job long ago.

    So what were those ads doing on my game website? Just helping to convert some of those non-paying or non-playing visitors that most likely wouldn’t have stick on my game anyway.

    I’m not sure my experience can be applied to a game that you have to download. People playing free online games are less likely to commit with their wallet rapidly. I usually have to count 1-2 months before a player spend at least 5$ on my game. If they leave before spending any money then at a minimum I might have done some money with them through the ads. The number of people that would have stick for at least 1 month and eventually spend money on the game but that I lost through the ads is minimal. I should be more concerned about my conversion rate than the ads on my website. But that’s a whole different matter.

    Now I’m not blaming anyone as I needed to make this experiment. I had my doubts but wasn’t sure. I decided to test it as I heard a couple of times that my ads were hurting my games but all coming from people producing downloadable games. I do believe that it’s not the same market and that rules are different.

    Again $50 is ridiculous and I won’t make a living out of this. But if I don’t make that $50 it means I have to use the money the game made to pay for it and the money made from the game wasn’t $50 higher in the last month. The game did make more money in June but after checking my stats that money was spent by “veterans” that were playing for a minimum of 3 months up to 14 months. I released some new update available through microtransaction which explains the raise.

    Also until recently I was making more from ads on my Kongregate appearance than with microtransaction. With no ads on Kongregate I think it is a really long shot based on my recent experiment that I would have make that money in microtransaction instead. Kongregate is a special case though as if your game don’t have badges then the crowd there isn’t really looking to play an online MMO to start with.

    This is only based on a free online game experience. I’m sure the crowd buying downloadable games is not the same and maybe it doesn’t react the same way to ads.

    For example I usually browse the indie section of Steam once a week and might throw some money on a game just because I know what being indie means. I’m not even looking at the website of the creator so ads have 0 impact on me (well ok Steam do promote games so it might count as advertising …).

    So will the ads on Golemizer be back? Probably. However I have put instead a big Facebook fan box where the ads were appearing. I found that the number of fans raised much more than in previous months. That still doesn’t say that those fans are actually players but it means I have another way to make them aware of a new update so maybe it can translate in more paying players later. That bit will require more time to be validated though.

  5. Even that estimate is optimistic. I get a little less than 10k page views per day and it results in less than 20€ per month. It might have something to do with the ads being at the *bottom* of the page though :-)

  6. kone says:

    I just wanted to say thanks to Cliffski and Dave for letting us know those stats which the most guys are keeping ‘secret’.

    You know you are dealing with a professional when he talks freely and shows deep knowlegde of things where others wouldn’t even talk about in the first place.

    Thanks!!

  7. Matthew says:

    Ah yes, one of the many reasons I shut down my old online work. You had to sell your soul to the green door or some other evil back alley web-site sponsor in order to get the $20/month just to pay the server fees.

    Cliff, if you read this send me an e-mail. I’d love to e-mail you but I have some technical difficulties at home (google is not a recognized mail client), and legal difficulties at work (not allowed to browse anything related to games).

    May not come to anything, but a conversation perhaps worth having.

  8. Robert says:

    I’m a developer, however my games are web based games instead of downloaded/installed ones.
    I see AdSense as critical to supporting the servers that run the game along with encouragement to continue to create new games.
    For example, World of Solitaire (http://worldofsolitaire.com) has a single ad that more than pays for the server costs.

    I hear what your saying about an ad taking up valuable screen space, which is why I have a ‘Hide these ads’ link directly above the ad that anyone can click on to hide the ad and reclaim the lost screen space.

    So while I agree with you that adsense for a blog doesn’t make a lot of sense, to a game developer creating web games, it makes a lot of sense :)

  9. baz says:

    Useful to know.

    I suppose you might get lucky and hit the main page of slashdot/digg or something, and the spike in visits could bring in some revenue. But, if you’re getting ~10k hits, the numbers dont stack up.

    If you’ve got flash games etc on your site, thats a different matter, you prob want some ads around/in those.

    I agree that ads can make a site look really cheap, not worth doing it.

  10. Natalie A. says:

    All very good points. *Goes to redesign page*

  11. Max says:

    In my opinion, you need around 10K a day, not a month, to get into decent ad networks and have the numbers start making sense. It’s of course all relative to an individuals needs / wants.

    Either way, I think you missed a crucial number in your calculations. If you’re willing to put 1 banner on your site, you mind as well put multiple. Multiple ads multiple your impressions… .20 CPM isn’t great and I usually see that for international traffic. .50-1.00 CPM is average for USA traffic from a decent ad network. Let’s say you have 4 banners, 1 top banner, 1 side banner, 1 footer, 1 300×250 banner in your main content. You can design a site that integrates ads well enough that they are not invasive. So, 10,000 views a day @ .50 average CPM = ~$5 a day but we’re showing 4 banners, so it’s $20 a day or ~$600 a month. Not too shabby in my opinion and that’s with 10K per day.

    Now it’s your job to raise your traffic, give visitors more to do and reasons to come back, aka, raise those page views by making a better site and get paid based on your performance. Plus, don’t forget we are talking about passive income here. Spikes from networking sites are fun, but they tend to only generate 1 pageview and bail back to the networking site. Only a small percent will stick around and generate the typical average page view per visitor. It’s the steady numbers that continue to make you money when you’re sleeping. Also, gaming related sites tend to make more on the weekends. That’s a fun thing to see if you’re used to working during the week.

    Well, I found your blog when I read that you developed Gratuitous Space Battles on your own and then Googled your name. Nice work!

  12. mapo says:

    There are many ways to use AdSense to achieve your goals.Some people are using AdSense to earn a great deal of money in amounts that you would not have thought was possible unless you robbed a bank.

  13. mapo says:

    good work keep growing