Rubber Duck's Theory of Low Revenues from Google

[Rubber Duck]

Everyone on here is moaning about low revenues, and I am getting pretty fed up myself, but I think I have come up with an explaination.

Simple, it is supply and demand.

I have long asked myself why Google bother with Type-in when they can get everything they need by displaying Ads in Search. Well, the truth is that they can't. In the US Market, I believe that they have more clicks paid for than they can fill from Seach, so they are more than happy to suppliment the supply of clickers from PPC services.

In Asia they have not been going so long with Adwords but the Seach side of things is well established. This means that they have too few paid Ads to go around. They prioritise the clicks from search and shut out the PPC guys. We effectively only help to mop up that excess demand from advertisers that they cannot otherwise satisfy. They ensure maximumisation of their own revenues by not loading the Adwords into PPC services until the supply and demand balance reaches a certain point. It is quite clear to me that while the Search Engine is full of Ads the PPC programme is virtually empty. This is particularly so in Japan where Yahoo is the established player and Google is Johnny come latetly.

I am not saying that we won't get a cut of the action, indeed we are starting to see a bit of it now, but my guess is that it isn't just IE 7.0 that we are waiting for on the PPC front. Does the same logic apply to Adsense, well probably yes to some degree, but I expect Adsense does rather better than Adwords.

Should we be pannicking. Well no. Only six months ago there were virtually non ASCII Adwords at all. Now there are plenty, so things are rapildy moving in our direction, but the cup doth not yet overflow, and we will only get our share once that starts to happen.

[blastfromthepast]

This is why adult affiliate programs, such as the Japanese DTI Cash program (http://xn--vus.tv/1/), and adult words, are going to be the real winners when typin traffic shows up. Just like in the early days, when nobody was paying for web traffic, Rick Schwartz was making good money with adult domains.

[Rubber Duck]

This is why adult affiliate programs, such as the Japanese DTI Cash program (http://xn--vus.tv/1/), and adult words, are going to be the real winners when typin traffic shows up. Just like in the early days, when nobody was paying for web traffic, Rick Schwartz was making good money with adult domains.

I have been thinking more about this over night, and I have come to the conclusion that whilst Google probably have some complicated Algorythm for it effectively, what is happening is that domain owners never get a crack at what is top of the Adwords lists. Google keep those for themselves. What this means is that you need a modified model for PPC. The easiest way of thinking about it is take Edwin's foot print model, but ignore the first 8 places on the Bid Terms.

What this actually means is that where we were multiply the Oveture Search by Overture bids, the model was grossly over estimating those domains with very high Search but comparatively few bids. Terms like this will easily have their demand satiated by Google own Searches. By contrast those with small numbers of searches but very high bids will be largely unaffected. On these there is just so much demand and very little supply.

This tends to back up my intuition to plump for the high Overture Bid terms rather than focus too much on search, which is what we is effectively what we have been doing for a month or two now.

[burnsinternet]

Hey, some of my crap regs might be OK after all!

Seriously, this sounds like a fun game to play. Non-popular, high-cost words....

I like it!

[touchring]

Yes, Google PPC from newer markets like Arabic, Russian, and East European will take time to pickup - with few advertisers, one can't expect Google to give us good ads.

[burnsinternet]

What is the prospect of Yandex accelerating the process by competing with Google or Yahoo and helping drive up bids for Russian? Anyone have any knowledge?

Contrary to popular opinion, I see Cyrillic as a better prospect than Chinese market in the near term.

[Rubber Duck]

What is the prospect of Yandex accelerating the process by competing with Google or Yahoo and helping drive up bids for Russian? Anyone have any knowledge?

Contrary to popular opinion, I see Cyrillic as a better prospect than Chinese market in the near term.

I think the supply and demand thing is particularly applicable to Russia. They don't have much going on the adwords front, but equally and probably more importantly is they haven't cracked the search market either, so the Adwords are passed almost straight to the PPC market. I think this will be a good area as foriegn advertisers will tend to run without Google, but knocking Yandex off the top of the hill is going to be a very tough call. Google will be hungry for PPC traffic for some time to come!

[bwhhisc]

This is an excellent theory Rubber Duck, and the logic is sound. I hear rumors that Microsoft is coming into the PPC game. This would be interesting as they are hugely global in scope and may see wide open territory for massive revenues.

[burnsinternet]

Hmmm.... I have some very relevant RU & UA domain names. Maybe I can think of something.... Ya never know. :rolleyes:

[Rubber Duck]

It might prove a huge opportunity as well. As they control comparatively little search, they might put more Goodies our way than Google do!

[bwhhisc]

It might prove a huge opportunity as well. As they control comparatively little search, they might put more Goodies our way than Google do!

There has been a good amount of press in the US about Microsoft putting a lot of resources into their search engine capability and relevance. They are currently #3 I believe behind Yahoo and Google. Huge numbers of msn.com users and searches. http://www.msn.com/

With Google getting such negative press and insiders dumping millions of shares they may see an opportunity to positions themselves as a new choice in the search game. Also coming...search engines that combine top search resluts for Google, Yahoo, and MSN side by side to give you a better look and comparison of top choices.

[touchring]

What is the prospect of Yandex accelerating the process by competing with Google or Yahoo and helping drive up bids for Russian? Anyone have any knowledge?

Contrary to popular opinion, I see Cyrillic as a better prospect than Chinese market in the near term.


Cyrillic.ru?

Internet in China is very strong, although it has yet to be seen how idn.com will compete with Pinyin.

Overall, the economic structure points to greater china being the next emerging economic power.

To have an idea of the kind of economic competition you will see, just count the number of ethnic chinese, taiwanese, and mainland chinese domainers on this forum.... :o And remember, this is an English forum.

[burnsinternet]

I believe that, over a period of time, the China market will be larger. However, I think the Russian, Ukrainian, etc. market will mature faster. That is just my opinion, of course, influenced by my personal Russian IDN PPC & traffic. That is probably a function of the quality of my Russian IDNs and other unique factors, but that is my forecast.

[Rubber Duck]

Cyrillic.ru?

Internet in China is very strong, although it has yet to be seen how idn.com will compete with Pinyin.

Overall, the economic structure points to greater china being the next emerging economic power.

To have an idea of the kind of economic competition you will see, just count the number of ethnic chinese, taiwanese, and mainland chinese domainers on this forum.... :o And remember, this is an English forum.

I totally agree with you about the ascendency of the Chinese economy and the influence of the Chinese in general.

I am mystified about about the Pinyin thing, as doesn't Pinyin strictly require a whole load of diacretics anyway, and won't that make them IDN in any case. Either way, there is little or no evidence of serious competition by Pinyin with Hanzi in terms of web content so I really don't see it as viable alternative in URLs. How many Chinese really use Pinyin on a daily basis?

[burnsinternet]

We spend a lot of time discussing Asian IDN, and there is a general consensus on JP and CN along with DE, but I can never get an opinion on FR, ES, PT, etc. (Europe without DE).

I have seen posts referring to FR as backwards. ES may explode in the USA first. PT has a huge number of speakers. Any thoughts on maturity order with those in the mix?

[touchring]

I totally agree with you about the ascendency of the Chinese economy and the influence of the Chinese in general.

I am mystified about about the Pinyin thing, as doesn't Pinyin strictly require a whole load of diacretics anyway, and won't that make them IDN in any case. Either way, there is little or no evidence of serious competition by Pinyin with Hanzi in terms of web content so I really don't see it as viable alternative in URLs. How many Chinese really use Pinyin on a daily basis?


Diacretics are not required for pinyin to be comprehensible - Diacretics are only used as a learning/pronuncation aid. Chinese is often double character, so people can guess the word (and the sounds) when they look at the 2 characters, e.g. anyone can read Beijing (even though it has no diacretics).

It's like the example that Bill brought up the other day with jumbled English words, as long as the first and last word is in place, we can guess as quickly.

I'm also trying to find out how idn.com will compete with pinyin, myself being a stakeholder of chinese names.

[burnsinternet]

Hmmm.... Deja Vu all over again.

Why is it that whenever I ask that question above, I can never get an opinion? Is it a secret code for thread stopper?

[thegenius1]

Hey, some of my crap regs might be OK after all!

Seriously, this sounds like a fun game to play. Non-popular, high-cost words....

I like it!


Its not they are Non-popular , its the fact that 100's of thousands may be searching for ero or music ect , and a fraction of that are searching for loans and realestate but they will highly convert... 8 years old to 80 years old you may be looking for certain things , but Realestate, apartments , loans , jobs, hotels ect are more then likely going to convert highly. I say that High Searches/Low bids - Low Searches / High bids kinda balace out due to the fact if you have 100 people click at 5.cents a whop per day , and on the other hand you get 1-2 people per day to click on a high paying term @ 4-10 bucks a pop it kinda balances out. But i personally would rather bank on the small amount of clicks because IMO they are guaranteed.

[blastfromthepast]

We spend a lot of time discussing Asian IDN, and there is a general consensus on JP and CN along with DE, but I can never get an opinion on FR, ES, PT, etc. (Europe without DE).

I have seen posts referring to FR as backwards. ES may explode in the USA first. PT has a huge number of speakers. Any thoughts on maturity order with those in the mix?

The problem with French is that it is a small(er) market than others, and most of the good names have been taken.

I'd say any Latin names are strong at this point, because they don't depend on IDN.IDN at all.

[touchring]

4-10 bucks a pop it kinda balances out.

I've not seen 4-10 bucks a pop on ND or Sedo ? ? Or am i missing something?

[thegenius1]

I've not seen 4-10 bucks a pop on ND or Sedo ? ?


I never parked at SEDO , but i have 5 Bucker here and there , right now been seing alot in the .87+

Look at it like this then 100 clicks @ 5 cents a pop , and 2 clicks at 2.00 a pop , pretty much balanced out imo

[Rubber Duck]

Diacretics are not required for pinyin to be comprehensible - Diacretics are only used as a learning/pronuncation aid. Chinese is often double character, so people can guess the word (and the sounds) when they look at the 2 characters, e.g. anyone can read Beijing (even though it has no diacretics).

It's like the example that Bill brought up the other day with jumbled English words, as long as the first and last word is in place, we can guess as quickly.

I'm also trying to find out how idn.com will compete with pinyin, myself being a stakeholder of chinese names.

Yes, but jumbled comprehension is not what is required here. What we are looking for is unambigious addresses which for most Chinese, I am not convinced that Pinyin would provide. It is clearly the case that in Japanese there are at least 2 or 3 alternative transliterations of each word.

I've not seen 4-10 bucks a pop on ND or Sedo ? ? Or am i missing something?

I have seen them, but they are certainly rare. It a bit like looking at the great pyramids of Cheops with 100ft removed from the top, but with those particular pyramids the bulk will still be there. With the smaller pyramids if you do the same it has a much bigger impact on the volume of the pyramid, but the Irony is that with smaller one's Google would take 200ft.

I never parked at SEDO , but i have 5 Bucker here and there , right now been seing alot in the .87+

Look at it like this then 100 clicks @ 5 cents a pop , and 2 clicks at 2.00 a pop , pretty much balanced out imo

Yes, but I see it more like this.

In the first case, you were expecting maybe 1000 clicks at 20 cents you end up with a thousand at 3 cents.

In the second case you were expecting 100 clicks at $2 you only actually get $1.50.


Obviously, in both cases you are going to be disappointed, but perhaps a lot more in the first case than the second.