Joel on AdSense gets it (partly) wrong

24 10 2005

Joel Spolsky: “It is important to remember that AdSense is just one part of Google’s revenue. A more significant part is AdWords, which covers the ads that appear on Google’s own site. AdWords are still susceptible to some fraud, although you can’t make money clicking on those ads, so it’s much less of a problem. There is a minor problem where advertisers hire clickers to click on their competitors’ ads, which cause their competitors to waste money, but that’s penny-ante stuff, and rare enough that advertising through AdWords still works well.”

OK, there’s a bit of confusion here. AdSense and AdWords are just two faces of the same program. If you are an advertiser, you subscribe to the AdWords program and your ads might go on Google’s search result pages, on other Google property like Gmail, or on pages of web publishers who subscribed to the AdSense program.

AdSense is not part of Google’s revenue. All ad revenue to Google comes in from advertisers using AdWords and aprt of it is used to pay AdSense publishers.

Apart from this minor point, Joel’s analysis is correct. And worrysome for advertisers, small publishers and Google alike. I can attest that Google takes click fraud very seriously, to the point that sometimes their net catches some innocent bystanders, together with the fraudulent clickers. But this might indeed be an unsolvable problem, in general.




3 responses

24 10 2005
Randy Charles Morin

I’ve heard the innocent bystander theory many times and almost everytime I find proof that he was clicking his own ads, asking friends to click on his ads or asking his readers to click on his ads.

25 10 2005
Ubiratan Pires Alberton

I’m looking at the Google ads on this page right now, and it seems all of them are for click-fraud sites, with names like “Adwords – Beat the System”. Strikes me as kind of ironic.

4 12 2005

I -thought- that’s how it worked! Thanks for posting that! I just read Joel’s post, and I was all confused.

I used adwords for my business for a very short time. My advertising revenue got all eaten up and I got no sales out of it.

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