Online advertising has been huge in the past few years because of the growth in social networking sites such as Facebook and Twitter. Much of the revenue that comes from websites is because of advertising. Realizing that people who browse the web is a huge, largely untapped market, many companies have started to pour lots of money into online advertising. While many companies will advertise on larger websites directly, such as WalMart advertising on Yahoo, they also want to be able to advertise on smaller websites, such as individual blogs. Google Adsense makes advertising on smaller websites possible, without the larger companies having to sort through which ones to advertise on.
To show the potential revenue that online advertising creates, I will use Yahoo as an example. Yahoo took in $1.23 billion in revenue in the second quarter of 2011. This may sound like a lot, but this was a 23% drop from a year earlier. Since online advertising is getting so big, it is amazing how the revenue for a major search engine can drop so much. Many advertisers are switching to Facebook and Google since they offer larger markets to reach. They anticipate that Facebook will overtake Yahoo this year for online advertisement revenue, with Facebook making $2.2 billion and Yahoo bringing in $1.6 billion.[1]
Google offers AdSense to its users, which allows customers to place ads on their websites for various companies. Once your website is approved for AdSense, you can start earning money instantly. The money you earn depends on page views and click through to the sites of the advertisers. If you have 100 page views, and 50 people click through to the advertiser’s sites, you have a 50% CTR, which helps determine how much revenue you can earn. Users can also determine what websites appear on the site, in order to weed out any sites that you may find objectionable. For example, my blog has advertisements for Blockbuster and NetFlix, because I mention them in my blogs. However, if I did not want to show these ads, I would be able to filter what can be shown.[2]
With all of the potential for revenue to individual users, the potential for fraud is also great using AdSense. The most common is Click-Fraud. This is when click-throughs are earned through fraudulent means, such as clicking on your own links or having others do so for you. Google is able to track information of the clickers, which makes it very easy to catch fraudulent activities. If a user is caught with fraudulent activity on their AdSense account, they can be banned. While there is much contention to whether it is fraud, since if you are on a college network the same IP shows for all users, Google may still ban you do to unusual activity. AdSense must be used with caution and fraud must be avoided if you want to consider using this great revenue earner. [3]
1. http://www.usatoday.com/tech/news/2011-07-20-yahoo-bartz_n.htm
2. https://www.google.com/adsense/www/en_US/tour/index.html
3. http://www.usakpedia.org/prevent-adsense-fraud-to-avoid-getting-banned-by-google.php
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