Adsense is Broken

9Feb2008 Filed under: Psychology, RescueTime, Startups Author: Tony Wright

I love the idea of contextual advertising, and I think Adsense has been a boon to entrepreneurship across the world. But it’s clearly broken. Today we received some nice feedback about RescueTime:

from A RescueTime User
to team@rescuetime.com,
date Feb 9, 2008 1:27 PM
subject RESCUETIME APP FEEDBACK

great site!

put some adsense here and i’ll click it every time i come here!

This is the 3rd such email we’ve received, and given that the concept of PPC advertising is increasingly well understood, is not an uncommon sentiment. Internet software has to be free, right? If so, how can a thankful user reward a company?

I wonder how advertisers feel about this? It’s no wonder that Adsense earnings are sharply dropping.

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3 Responses to “Adsense is Broken”

Nivi
February 9th, 2008 at 8:55 pm

Shouldn’t this be self-correcting though? Advertisers will simply pay less for click-throughs as the quality of click-throughs goes down. Or no?
Auston
February 10th, 2008 at 7:08 pm

There is always Tipjoy!
Tony Wright
February 10th, 2008 at 11:45 pm

@nivi I suppose it is self-correcting… But I think the specter of click-fraud is enough to scare a lot of advertisers away. It’s never a really great value proposition to say:

“I know some percentage of what I’m offering is pure and utter crap…. But because of that, I’ve marked the price WAY DOWN!”

For “pro” advertisers, this is probably fine. Just measure it, and make sure your ROI is solid. But I wonder how many adsense advertisers really measure how many click-thrus convert and are savvy enough to have differentiated measurement for search ads and content ads?

I dunno. Maybe Google’s PPA advertising will take off in the content network…