Mountain View, California — Google, which has faced disapproval from publishers that its AdSense program is not transparent enough, has finally unwrapped the way it splits advertising revenue with search and content publishers, who run Google ads on their own sites.
In a blog post, Google described that, in general, AdSense customers are publishers who operate “Ads by Google” ads side by side to their content as well as those who use a custom Google search box on their website and operate search-linked ads. Those in the first category–AdSense for content–keep 68 percent of the revenue that Google earns for selling those ads, while AdSense for search customers get 51 percent of that revenue, the company revealed for the first time Monday.
AdSense engages websites carrying an automated set of Google adverts which relate to the content on their pages; it is one of the key ways which smaller sites that do not sell their own display advertising make money online. But amazingly such sites have never officially known how their share of the resulting revenue is calculated.
“AdSense for content publishers, who make up the vast majority of our AdSense publishers, earn a 68% revenue share worldwide. This means we pay 68% of the revenue that we collect from advertisers for AdSense for content ads that appear on your sites. The remaining portion that we keep reflects Google’s costs for our continued investment in AdSense,” Neal Mohan, Vice President, Product Management at Google, wrote.
No word so far on the proportion it shares with users of its AdSense products for feeds, games or mobile. Google says it would not provide those breakdowns because the products are “quickly evolving, and we are still learning about the costs associated with supporting them.”
“We disburse our AdSense for search partners a 51% revenue share, worldwide, for the search ads that appear through their implementations. As with AdSense for content, the proportion of revenue that we keep reflects our costs, including the significant expense, research and development involved in building and enhancing our core search and AdWords technologies,” he added.
AdSense for search delivers search ads alongside queries on the customized Google search tools deployed by various sites. For these, the rates are smaller for the publishers as, Google says, it costs more to operate them. In truth, with AdSense for search, the company is providing an additional service, the search engine, besides serving the ads so that weighed on its decision. The rate has been at 51/49 since 2005, when the company increased it. For the immediate future, Google states it’s not likely it will modify any of the rates.
Google, which is based in Mountain View, Calif., long had resisted calls to reveal its revenue split. But it recently suggested to do so in Italy in response to an antitrust probe sparked by Italian newspaper publishers’ complaints that Google was abusing its dominant position in the country.
According to a person familiar with the situation said Google had been discussing the possibility of revealing its revenue split for some time and the Italian situation made it the “right time” to do so. The company’s growing clout has made it a frequent target of regulators in a number of other European countries, as well as in the U.S.
“Google is trying to present itself as more open and friendly. It is hard to make that argument if they are not open about this,” said Gartner analyst Andrew Frank.
“We hope this additional transparency helps you gain more understanding into your business partnership with Google. We believe our revenue payoffs is very competitive, and the vast number of advertisers who contend to appear on AdSense sites helps to ensure that you are earning the most from every ad impression,” Google said in its blog post.
The company stated that its revenue sharing for AdSense service has not varied since it was introduced in 2003, while the company’s search-ad revenue sharing has been the same since 2005.
Major publishers discuss individual deals with Google for those revenue splits, but the thousands of smaller publishers and companies that constitute their income with these types of ads had never been exactly certain how Google was splitting the pie, creating frustration for many in the publishing community.