Last week we got a bit of news that Google AdSense has changed the way its auctions work. This change was rolled out to standard units (in December, we believe). Most folks didn’t notice that lower revenue per click was made up with higher click-through rates because AdSense launched a formatting change that included arrows in the ad format at the same time.
While AdSense hopes this will be good for the long-term health of advertising-supported businesses, it’s going to mean a decrease in the revenue per click that we earn. Like all of you, we are concerned about revenue.
We have been optimizing the page and running tests to see how we can increase revenues to make up for the loss we will experience. We’ve been told to expect the change the week of March 11th. The estimated revenue hit is 10 to 13% of the custom-formatted revenue we earn based on January earnings. We have made several tweaks to the custom ads we display on Hubs in February (custom ads are the units you see within the content area of a Hub), so it may turn out to be more than that. I think the best case scenario would be that we see a total hit in the 5% range (the worst case scenario would be a hit in the 10 to 15% range). We won’t really know what the impact will be until the pricing changes go through.
When AdSense shared the news with us, they also gave us a new product to try called CSI units.
These units can be sized to non-standard sizes like the custom 520X200 unit we have below Hubs. The main difference is we can’t blend the fonts as well or have as much control on the layout, but the new units add the little graphic arrows that seems to help the click-through rate. Our plan is to run the CSI units side by side with the custom ads and see which one performs better. After a few weeks, we will switch to the units that perform best.
In short, we are going to see a drop in revenue per click and we have a few weeks to see if we can offset the loss with tweaks to our ad layout. Most of the tests are now running on Hubs for the web version of Hubs (not mobile versions).
We are highly dependent on custom ads for mobile, and while there are fewer options available for that format, we are on the beta list for a new type of unit called an adhesive unit that anchors to the bottom of the page which we hope to test out soon.
We will keep you posted as we learn more.