On May 24th Google finally revealed what percentage of Adwords revenue they are paying to their Adsense publishers. According to their Adsense blog
AdSense for content publishers, who make up the vast majority of our AdSense publishers, earn a 68% revenue share worldwide. This means we pay 68% of the revenue that we collect from advertisers for AdSense for content ads that appear on your sites. The remaining portion that we keep reflects Google’s costs for our continued investment in AdSense — including the development of new technologies, products and features that help maximize the earnings you generate from these ads. It also reflects the costs we incur in building products and features that enable our AdWords advertisers to serve ads on our AdSense partner sites. Since launching AdSense for content in 2003, this revenue share has never changed.
We pay our AdSense for search partners a 51% revenue share, worldwide, for the search ads that appear through their implementations. As with AdSense for content, the proportion of revenue that we keep reflects our costs, including the significant expense, research and development involved in building and enhancing our core search and AdWords technologies. The AdSense for search revenue share has remained the same since 2005, when we increased it.
In response to the question of whether this is an average or across the board they replied
The 68% revenue share for AdSense for content applies to all online publishers, and is not an average revenue share. If you’re showing AdSense for content ads on your pages, you’re receiving 68% of the amount advertisers pay for those ads. While the revenue share can vary for some major online publishers with whom we negotiate individual contracts, these amounts are not in any way averaged together. Also, there isn’t anything additional taken off the top. You get 68 percent, period.
So there we have it. We know exactly what we make as publishers. It also lets us know that most likely Internet Traffic has negotiated a deal higher than that. Combine that with the better returns of the Google ad feed vs. Yahoo and you can easily get to the 40% increase in revenue that is being whispered, OK shouted, across the domainisphere. We also know that the parking companies are receiving somewhere around the 68% mark and they are keeping a large percentage of that amount. So the big question arises. what percentage should parking companies be taking as their cut?
Let’s first discuss what the parking companies have built. They’ve built a platform that makes it easy to transform your domain. They’ve built the software that allows you simply to enter your domain name and then change the DNS. Instantly ready to go. They have the software that analyzes traffic and determines which ads to serve on your parked page. Almost all improve as more data comes through. Google has done WAY more than that and they think they deserve 32% for their effort. I can guarantee that parking companies are keeping more. How can I guarantee? From the analysis on one simply domain.
I have one domain that has a CPC of approximately $10. On Sedo I was getting under a dollar per click so I moved to Domain Sponsor where it move up to $1.50. I then moved it a developed site where the clicks moved to a around $3. I realize that this is by no means scientific, but it certainly gave me a little better view of who is taking what. With Google opening up and giving revenue share it is all coming together. Google pays $3.20 and I would imagine the parking companies are in that ballpark. They presently take 30 to 70% of that total leaving you with $1 to $2.25 of the $10 CPC depending on your standing with the parking company. This is an educated guess based on webmaster forum discussions over the years but I bet you that it’s pretty close. Somebody like me is probably only getting 30 percent of the total. This is way too low in my opinion.
I think the parking companies should be keeping 30% of the revenue across the board. Lower for the big portfolios. I’ve chosen this number completely based on Google’s take. Google does most of the work. They are getting all the advertisers. They are collecting the payments and paying out. They have developed the network. Same goes for Yahoo. Parking companies have merely created a platform to feed all this in and optimize the traffic to choose the best ad keywords. Much less work than Google so therefore they should keep less than them. The staffing for a parking company is minimal. Customer service on parking? Barely a need. The backend can probably be maintained by a person or two. That leaves servers to handle the traffic. When you look at it this way you can see how they have so much money to blow on trade shows, domains, and advertising. It’s a cash cow. But let me get this straight. They are not shaving or stealing from you. You have agreed to let them do whatever they want when you sign up to park with them. You are allowing this. Shaving is telling you one percentage and then paying you less. They aren’t doing that. They have always been paying you a low percentage. That’s just good business, not shaving or stealing and you have been cool with it.
So now that you have all this info, what should they pay out? What percentage should they keep? I’d love to hear what other domain investors think is a fair amount.