Google reduces, eliminates referral payouts for AdSense

By January 9th, 2008

Effective the end of this month, Google has reduced its payout for new AdSense accounts for the Americas and Japan, while eliminating it completely from other geographies where it operates.

For the past year, the referral program has worked like this:

  • referred publisher earns $5 within 180 days = you earn $5
  • referred publisher earns $100 within 180 days = you earn $250
  • 25 referred publishers earn $100 each within 180 days = you earn a bonus payment of $2000

Under the new terms:

  • referrals from users in North America, Latin America and Japan who earn $100 within 180 days = you earn $100
  • no referral payouts at all for referrers in other geographies

As you might imagine, reactions from prominent figures in the blogosphere (and, naturally, big referrers for AdSense), like Darren Rowse/Problogger and Shoemoney are not happy.

Why the change? Occam’s Razor would suggest the referral bonus program simply wasn’t working the way Google had wanted. However, the abrupt dropping of referral bonuses outside the Americas and Japan (instead of reducing them) suggests a strategic decision to reduce ad inventory in these regions.

AdWords, advertisers’ analog to (publishers’) AdSense, in DecemberĀ unveiled improved location targeting (geotargeting), allowing advertisers to target their ad campaigns to different geographies. (It allows picking geographies from a map, choosing individual states and even cities, and even a specified radius around a chosen point) Location Targeting is also a more prominent step in the campaign creation process, so advertisers might have started to pay more attention to it.

So the recent changes with AdWords might have demonstrated a waning demand for ad serving in geographies outside the US, Canada, Latin America and Japan, against the growing pool of published inventory.

Another possibility is that the number, breadth and sophistication of alternative ad networks has made the lifetime value of an AdSense signup lower. AdSense might be the first ad network that a publisher might go with, because it’s the easiest to install and it has a recognized, trusted brand name, but may switch to another with better payouts later. That’s especially true with niche publishers, who are increasingly pairing with niche ad networks, but also with more general publishers who have Yahoo, Microsoft and others moving more aggressively into the contextual ad space.

It’s hard to know. What is certain is that Google’s plea, “[We] hope it won’t cause you any inconvenience” is unlikely to assuage publishers that will be burned by this change.

Bookmark and Share

This entry was posted on Wednesday, January 9th, 2008 at 12:03 pm and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply