Theory on percentage of ad costs as payments

[aqls]

I understand that google pays out about (uncertified) dependent on who is asking 62% of the ad revenue they get.

Top financial domains like mortgages, credit and loans cost anything up to $100 to buy top spot.

To buy 2nd, 3rd - 8th etc spot the price dramatically decreases usually as many will pay a premium to be top dog. After that, because it doesn't feature on the first google response page it is usually much cheaper still.

(Albeit, money alone doesn't get you to the top, you need good CTR as well, but it helps!)

ND top payouts are about $5 to date according to publicly available disclosure on this board.

So taking worst case - ad cost is $100 to advertiser, google pays ND $68, ND pays us $5 which is just shy of 10%.

Taking average case - ad cost is say $25 - google pays ND $17 - ND pays us $5 - which is about 30 %.


My guess is that the last one is about right.

Google, I bet will pay much less for adsense ads on a site that is traffic rather than content driven, lets say 50% for sake of argument.

So ad cost of $25 - google pays out $12.50 on an adsense click through. (my estimate is a bit high perhaps?)

But on your own trafficked site, you won't get so many click throughs as you would with say ND.

I haven't got the faintest idea of those stats, but lets say it is 25 times worse.

So although you are getting $12.50 instead of $5 you need 25 times the traffic to get that revenue.

So, as you are allowed to promote an adsense site but not an ND site - the target is to get approx 25 x $5 / $12.50 = 10 times the traffic in order to equal the revenue you'd get just from parking it.

Anyone got any figures to disprove/prove this is the case? Any other opinions?

:???:

 

[LoneDomainer]

i used to have very well targeted secured finance ads and i only got max $1.20 per click

I know i had the top site advertising as well so i dont know what the percentage is with adsense

student-consolidation.co.ukon sedo is doing well 71 euros in a few days
average 4 euros per click

 

[SF]

student-consolidation.co.ukon sedo is doing well 71 euros in a few days
average 4 euros per click

Drinks on your then!

 

[rob]

So taking worst case - ad cost is $100 to advertiser, google pays ND $68, ND pays us $5 which is just shy of 10%.

Taking average case - ad cost is say $25 - google pays ND $17 - ND pays us $5 - which is about 30 %.

...

Any other opinions?

The other thing to remember is if your domain name is earning $5 a click many people see the worth of that domain as a multiple of the total earnings.

To an end user who is used to paying the full whack to google (and still create profit on the leads) the domain could be worth much much more...

 

[LoneDomainer]

Drinks on your then!

would be really good if we could get more traffic to it

1 question.. are you allowed to drive PPC traffic to the domain
cant find anything about it on sedo

 

[aqls]

no. it's against the rules from google to push traffic except from prior links and type-ins.

>To an end user who is used to paying the full whack to google (and still create profit on the leads) the domain could be worth much much more...
- good point when discussing yearly multiples.

This thread (note initial post date) has given me a severe dizziness feeling!

-aqls-

 

[NameDriver]

Hi Aqls,

I'm not really sure whether I can add any helpful points to this, but...

I was talking with Eytan, head of the domain channel at Google at the last traffic show (I'm in Vegas now ) and he was saying that Google's 'max bid' structure is very different to Yahoo's - I'm not sure how this has changed with Project Panama.
If an advertiser on Google specifies that he is willing to pay $120 to be top dog on an insurance domain but the next person down is only paying $25, then, despite the top bidder's willingness to part with $120, Google will adjust his max bid so it's just higher than the 2nd bidder - say $26. Yahoo will take a top bid regardless of the second bid. This means that, although you may on occasion have to pay top dollar, more often than not, you won't.
In addition to this, we've found that the 3rd ad often gets more clicks than the top one...

In addition to this, on this forum, we've also had some reports of some $20+ clicks which went live on a new system we had in September. I think $24 was the highest one we heard, so I wonder how much that cost them on AdWords.

Like I say, I don't really know if this helps, but there's my two pence.

Have a good evening.

Ed

 

[aqls]

Thanks Ed for that info.

I had noticed that the Namedrive max payout had increased since the original post.

With regard google's benevolence of heart, only charging people a dollar more than the guy below - I feel it's a bit of a sneak, and more marketing hype that anything worthwhile.

Given my range of ad bids mostly ranges from 5 cents to 50 cents, a $1 increment is a bit of nonsense. Only on the top paying adwords would it be very significant.

I also think that if top dog is paying $65 or so, then it should follow that there must be at least 65 bidders (which is possible) and that the bid prices for 1st, 2nd and 3rd go $65, $64, $63 at the preset increments. I don't think it does. It is often much cheaper to get 8th or 9th place than that.

However, I shouldn't bite the dog that catches my dinner, so I'll accept that it is better than yahoo.

Cheers

-aqls-

 

[fred]

I also think that if top dog is paying $65 or so, then it should follow that there must be at least 65 bidders (which is possible) and that the bid prices for 1st, 2nd and 3rd go $65, $64, $63 at the preset increments. I don't think it does. It is often much cheaper to get 8th or 9th place than that.

If there are three bidders, you, me and Ed:

I bid a max of $5
You bid a max of $65
Ed bids a max of $100

I would presume the result would be:

My ad in 3rd place @ $5 (or would it be at the min bid price as there is no one below me?)
Your ad in 2nd @ $65
Ed's in 1st @ $66

 

[aqls]

In that case bidder 2 (me) doesn't get his guarantee.

You're just picking on me!

-aqls-

 

[fred]

I think it only applies to the top bidder.

It's like proxy bidding at ebay, you only pay the amount needed to beat the person below you. The person below ends up bidding to their max.

 

[aqls]

ok.

Thanks for that.

I knew it was a sneak!

Just needs more than one person to think its safe to overbid and you both end up right up there.

point made.

-aqls-

 

[NameDriver]

Sorry I'm a bit late on this. Only 7.30 am in Vegas, baby...

Sorry I also missed out on the opportunity to pick on aqls. Whatever happened to Yesterday? Seems so far away.

I agree with Fred that I believe this only applies to the top bidder. I don't know if it's only 1$ more, but it could be a percentage more. I know Google love the hype, but it would certainly explain why the top AdWords bids don't always translate into huge AdSense clicks.

Time to go and schmooze at TRAFFIC.

Ed

 

[diablo]

If there are three bidders, you, me and Ed:

I bid a max of $5
You bid a max of $65
Ed bids a max of $100

I would presume the result would be:

My ad in 3rd place @ $5 (or would it be at the min bid price as there is no one below me?)
Your ad in 2nd @ $65
Ed's in 1st @ $66

Wouldn't it be

My ad in 3rd place @ $5 (or would it be at the min bid price as there is no one below me?)
Your ad in 2nd @ $6 (enough to keep you from 3rd)
Ed's in 1st @ $7 (enough to be top dog)