6 Reasons CPC Is Not Fair For Publishers?
In light of the punishment Google has been handing out recently, I have been thinking a little bit more about the current play with blog advertising. It would be fair to say that most blogs use Google for monitization, but are they getting a fair share of the pie?
CPC Advertising
If you are unsure of the different advertising terms, see my post on Online Advertising Explained; CPC advertising is basically what the majority of sites use, with Google Adsense being the perfect example. Most of us should be familiar with CPC, but how many actually click on these ads on other sites? I know some of the ads Google serves also have a CPM value, but this is normally quite small, with the publisher seeing little income from it. Is this fair?
Online / Offline Advertising
As I have said, I have been thinking about this topic lately and one conclusion I have come to is that CPC is heavily waited in favor of Google and the advertiser. Alright, not a startling conclusion you may say, but have you really given it much thought?
I make some generalizations here, but If you liken traditional advertising to advertising in the online World, there are obvious synergies, as well as differences.
Similarities:-
- Print media circulation helps determine advertising rates
- Ratings figures perform the same task in Television and Radio
- Online media has similar measurements including, number of uniques, page views, feed subscribers, Alexa ranking, Technorati, and the contentious Google Page Rank.
The differences are that in traditional media, if you purchase adspace or airtime, even on poorly rating space, you have to pay a specified fee. This fee is not based on any performance measure beyond the circulation figures. The publisher gets paid irrespective of the direct performance of the ad. Why is this?
The advertiser is generally not expecting direct sales for every eyeball that sees their ad. They recognize that there is value in the ad just by itself and that over time it helps build credibility and brand recognition. The same is not true in the online World for CPC advertising.
If anything, the success of online ads is far easier to measure, with greater directs metrics then print, radio or Television.
6 Reasons CPC Is Not Fair
You may say that most CPC ads do not directly promote anything by themselves, but that they are there to draw people to their particular site promoting a product or service, and that without a click, the ad is useless. Maybe so, but that is the fault of the ad copy itself, rather then the model of the service.
The reasons CPC is not fair:-
- Google serves ads across millions of sites, with millions of eyes seeing the ads
- If there are no clicks, the advertiser pays nothing, yet still gains value
- The advertiser can gain great exposure for relatively little cost
- The publisher is only paid for clicks
- With no clicks, the publisher devotes adspace for no return
- Smaller publishers can serve many ads per day, yet still receive no return for their effort
There are sites that receive thousands of page views per day, thus serving thousands of ads per day, yet receive virtually zero revenue from CPC ads. Irrespective of the reasons for this, such as lack of optimization, etc. The fact remains, they are providing value to others, with no return for themselves.
A Fairer Solution
A simple solution to this problem would be to have the ad network, in this case Google, have an extra charge for CPM for each advertiser. A percentage of this could then be distributed across all of the publisher sites. Obviously there would be some issues to overcome, and some economics to work out, but it really should not be too difficult to achieve for someone like Google. The extra cost for the advertiser would not have to be that great either, but it would go someway to providing a fairer model for smaller publishers.
There is also another advantage to this model, it would help to deter some of the more spammier, lower paying ads from cluttering the Web.
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