Google Adsense earnings down?

James Ryan Jonas

Several website owners are reportedly seeing their Google Adsense income declining in the past months. A discussion over at WebmasterWorld got webmasters talking about the phenomenon and what supposedly is causing it.

We are also seeing that decreasing trend here in the site, albeit not consistently from month to month. Our monthly average income now is just barely half of what we earn last year.

In December, income dropped by 30% from the previous month. We don’t know what triggered this but we’re thinking the shrinking of clickable areas in Adsense ads and the PageRank penalty slapped on the site might be the culprit.

Fortunately, Adsense earnings reverted to its normal level in January 2008 but in February, income is back again in the same level as December 2007. Daily earnings during the first days of March this year are increasing but still nowhere close to the pre-December figures.

Why are Adsense earnings on a decline?

No one knows the actual reason but there are several guesses:

1. Google reducing the clickable regions of the Adsense ad units eventually brought fewer ad clicks and thus lesser ad revenue;

2. The recession in the US economy is causing companies to cut back on advertising, particularly online advertising;

3. The ones advertising now are primarily small-time advertisers who bid and pay less for every ad click; and

4. Google’s smart pricing system (that is, the automatic adjustment of the cost of a keyword-targeted content click based on its effectiveness compared to a search click) is causing lower return on content clicks to help protect the value of search clicks.

Whatever the reason is, the decline in Google Adsense earnings does not bode well with most website owners and bloggers.

Is this the same in your case? Is your Google Adsense income also dropping?

James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.