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NYT reports that AdSense pays publishers 78.5 cents on the dollar

I am often asked by readers what percentage of the money advertisers pay Google is kept by them and what they give to AdSense publishers. Jen has spotted an article in the NYT that claims the figure Google gives publishers is 78.5%.

‘the article clearly states Google pays roughly 78.5 cents for every dollar an advertiser pays for advertising on partner sites. Unfortunately, it isn’t clearly attributed to anyone. However, this figure is definitely in the neighborhood of what I had believed the revenue split was at, so I do believe it is fairly accurate to my knowledge, based upon the information given in the SEC filings.’

Like Jen, I’m not sure whether it’s accurate but it was at the upper end of the ballpark that I would have estimated.

About Darren Rowse

Darren Rowse is the founder and editor of ProBlogger Blog Tips and Digital Photography School. Learn more about him here and connect with him on Twitter, Facebook, Google+ and LinkedIn.

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Comments

  1. Mihai says:

    I think the actual value is much lower.

  2. big4guy says:

    This means Google retains 21.5 cents in a dollar. I see Google as a commission agent, who brings advertisers and the prospective customers together. As far as commission rates for advertising go, 21.5 % is pretty huge. Anyone know similar rates for Yahoo!

    big4guy

  3. Interesting. I don’t think 21% give or take is unreasonable at all. I think Big Guy’s comment ignores that part of the number (whatever it actually is) is a return on the Google’s context technology.

    Now as many have said, the technology is not perfect for all websites, but gives many small publisher a chance to make a little or a lot of change with little or no effort

  4. jim says:

    If true, I think their split is very generous considering the technology behind it.

  5. Dan Marques says:

    That is way higher than I had ever expected. My best guess would have been somewhere in the 25-50% range. Although, could that 78.5% number be what Google pays for site tageted ads on a CPM basis? It may not necessarily be what google pays for CPC contextual advertising.

    Of course, the great debate could be ended easily enough. Create ads with very specific keyword targeting and set up a site on a different publisher account with a keyword rich site for that targeted ad. Once clicks come in, see what the difference between the two are.

    Here’s another interesting thing to think about. If I have some clicks that I only earn 1-3 cents on, yet Google’s minimum bid for advertisers is 5 cents. On any ad paying me less than .03 per click, they are keeping drastically more than 21%….

  6. jim says:

    I emailed Bob Tedeschi (author of the article) about where he got the numbers and he said that he gleaned the figures from Google’s 10-Q. Of $675M in revenues from the Google Network, they paid out 78.5%, or $530M. Then he mentioned that the company emphasized that 78.5% is an average payback… so each publisher gets more or less than that (smart pricing?).

  7. Trent says:

    The payback averages 78.5% but includes partners such as AOL that likely receive a much higher percentage. In addition, certain high-traffic partners receive guaranteed minimum payouts, and in certain cases these result in payouts in excess of 100% (this is all in the regulatory filings, by the way.) The average payout for a blog owner is likely significantly lower.

  8. Then it’s time for me to get to 20 million hits a month!

  9. George says:

    Thats just bull. Remember NY Times are known to publish fake stories and I bet this is just one of them to help sell paper.

    No way Google is paying that high of a split.

  10. Doesn’t BlogAds take a 30% cut? In light of that, 21.5% doesn’t sound too bad.

  11. Leo says:

    Great Post.

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