Bad Economy = Low Adsense Earning = Low Pay Per Click?

March 8, 2009

Reading the news about the bad economy that the world is suffering I was thinking on what will be in the coming months for us (Publishers, Marketers, Affiliates…). Let’s see what Google’s CEO calls economy ‘pretty dire’:

The search giant’s chief touched on a wide variety of topics and, specifically, how they affect Google, during an on-stage chat with tech analyst Mary Meeker during the Morgan Stanley Technology Conference held Tuesday in San Francisco. But he focused mostly on the economy, calling the current climate “pretty dire” and adding that he doesn’t expect it to improve until next year.

“It obviously will affect the online advertising market because our systems are so tightly tuned. If customers are buying less, it will eventually be reflected in CPCs and CPMs,” he said, referring to cost per click and cost per 1,000 impressions, respectively. “We are not immune to this.”

After reading this paragraph intantly Adsense Publishers came to my mind. Obviously, Google will pay much less per click to adsense publsihers (may be not all publishers adsense but for sure the majority). That’s why diversifying is always good. But Also there is another point of view that will be good. If Google Adwords advertisers pay less for their advertising budget the competition will much less in most of the keywords.

I know many Adwords advertising lowering their advertising budget and Google known it. What will be the solution to this? Lowering the price per click. In another point, It seems that Google will take the opportunity on this bad economy and will buy a lot of other online services like Twitter.

When asked about Twitter during an audience question-and-answer session, Schmidt said Google “was in favor of all these new communications mechanisms.”

“Speaking as a computer scientist, I view all of these as sort of poor man’s e-mail systems,” he said. “They have aspects of an e-mail system, but they do not have a full offering.”

“Twitter’s success is wonderful and it shows you that there are many, many ways to reach and communicate, especially if you are willing to do so publicly,” he said while touting the success of Google’s instant messaging system.

Fool.com made a pretty cool analysis about what Schmidt said: “Google isn’t really taunting Twitter — it’s negotiating. Taking Twitter down a few pegs helps drive a lower price and soothes antitrust regulator concerns. And if history is any kind of dependable professor, Google is now three weeks away from swallowing Twitter whole.”

This is what other webmasters have to say:

Google might no be “not immune” But they will certainly be around in 2 years time . Maybe this is putting the breaks on the massive growth that they have had.

I think that it is a period of reconsolidation all around. Those good businesses that are strong will stick around & those that are not so, will find it tough. I think that as long as you are using the slower times to be more productive,Educate yourself, (maybe look over the expenses that you never had time to go over to see if you really need it ). things will turn around. Even in these times there will be business setting records in all sorts of different industries.

So less time surfing Google News and other time waster sites that we all have & more time on Split testing, Upping conversions, new product development, more education etc etc. As it is certainly not business as usual over the coming year.

No, what they need to worry about is being labeled a monopoly in search which appears to be in the making right now according to the news. I’m guessing that the new administration may have some issues with Google’s aggression in acquiring and dominating everything Internet.

I think there are multiple factors at play here. Google might be “forced” to put the brakes on because of continuing pressure from the Federal side. Last month’s narrow margin in search share gain and/or loss may be a sign of some cutbacks and a slightly different approach to growing the Gorg.

You reminded me, I need to finish my visual on the Google Acquisitions Timeline. They’ve been up to something big and I think 3 to 4 years of acquisition data is enough to paint a picture.

Questions to be answered:

Do you think that Google will buy Twitter?
What about your adsense earnings? Do you see the difference?
Adwords Advertisers, do you think that because of the bad economy many adwords advertisers (mostly big companies like amazon, ebay, buy.com, etc..) will lowering their advertising budget and that will turn up to be good for us small-mid advertisers?
Do you think in the coming months we will see that Google bought this and that company for a bargain?