Title Page: How Google and Yahoo are loosing money.
By: Akhil Sharma with Manish Jain and Romil Tripathi
1) Google because of taking money from advertisers in their local currency and paying the publishers for putting up their ads in EURO/Dollars, is losing money daily.
2) Either their is an error in google adsense reporting structure for the websites at which its ad codes is served or yahoo is loosing money on a daily basis by displaying the ad codes of individuals on their home page. (The scenario is reported in a condition when the individual display yahoo content in his website using IFRAME.
Adwords: AdWords offers pay-per-click (PPC) advertising, cost-per-thousand (CPM) advertising, and site-targeted advertising for text, banner, and rich-media ads. The AdWords program includes local, national, and international distribution. Google’s text advertisements are short, consisting of one headline consisting of 25 characters and two additional text lines consisting of 35 characters each. Image ads can be one of several different Interactive Advertising Bureau (IAB) standard sizes. (Source: http://en.wikipedia.org/wiki/AdWords)
Google Takes PPC cost from advertisers in their respective local currency.
Adsense: Google AdSense is an ad serving application run by Google Inc. Website owners can enroll in this program to enable text, image, and videoadvertisements on their websites. These advertisements are administered, sorted, and maintained by Google, and they can generate revenue on either aper-click or per-impression basis.(Source: http://en.wikipedia.org/wiki/Adsense)
Google Pays publishers in EURO or US Dollars for putting up Ads.
Scenario 1: An Advertiser uses adwords to get traffic and uses adsense to generate some revenue out of it.
Now suppose an advertiser(Which is me in this case) uses adwords to get traffic while opting out to pay in my local currency(Indian Rupee) of which unit value is less than US Dollar and Euro. For e.g. Indian Rupee.
Now I can go down on my CPC (Cost per Click) as much as low to the lowest denomination of my local currency i.e. 1 Rupee Paisa (1/100 Indian Rupee).it is possible, see snapshot below figure 1:
However, the whole campaign cannot be brought to 1 paisa but the whole campaign can be brought to 8-9 paisa which I did, snapshot attached below figure 2:
It means that I am paying Google average 9 Paisa for a single click to my website. Now my text ad is placed in different google search partners as well as parked domains and websites using adsense to serve ads given by Google.
Since Google is paying publishers in US Dollars/Euro which means the lowest it can offer to the publisher for every click on his website is 1 dollar cent or 1 euro cent.
Which means for my ads shown on different websites using adsense, for every click google will be paying the publisher the least as 1 dollars cent( lets assume the publishers chooses Dollars).
Now for my ads I am paying google 9 paisa and google is paying the publisher the least 1 cent (dollar) which is equivalent to 42 paisa(assuming exchange rate as 1 USD=42 INR) Figure 3:
Google is earning 9 paisa and paying out 42 paisa which means difference of 33 paisa per click.
For 1 Million Clicks bought with adwords at average CPC of 9 Paisa.
I paid to Google 1 Million*9 Paisa = 90,000 Indian Rupees.
Google paid to Publishers by paying out the least 1 Million *42 Paisa = 4,20,000 Indian Rupees
The deficit which the google is paying =4,20,000 minus 90,000 Indian Rupees = 3,30,000 Indian Rupees
Approximately 7857 USD per advertiser.
Now this is a scenario with only one advertiser.
The Moment the advertisers in Adwords optimises the campaign lower than the base value to Local currency equivalent of 1 Dollar Cent which is 42 Paisa in this case. Google Starts bearing loss for each click accrued.
However other possibilities are that Google will not show it as a click which I am ruling out as could be the possibility.
My logic remains the same. I can pay to google in lowest denominations in my Local Currency by optimising the campaign and going below the 1 Dollar cent equivalent CPC and Google has to pay the Third Party Adsense website or Search Partner or Parked Domains in lowest denominations of the USD or EURO.
Now this flaw assumes very serious implications:
1) One is that Google is bearing loss for each click which is below the 1 cent equivalent of Local currency.
2) That there is no connection between the Amount paid by the advertisers to the Google and then Amount paid by the Google to the Publishers. Which could be a very serious issue.
3) Third could be Google will not be reporting the clicks accrued to the publisher.
How Yahoo could be loosing Money.
I have a website in which I am displaying the Yahoo india content by using IFRAMES. There are two ads from my adsense account on the page.
Now, When I checked the Reports in my adsense account for the websites from my which ads were clicked(as i used to have couple of websites more).
I found that after certain time period Yahoo picks up my Adsense codes and starts displaying on their yahoo page for the user of my website.
For August Month Reports snapshot below figure 4:
Now this could be a flaw in Google Adsense reporting as it picks up the Yahoo URL or Flaw in Yahoo or could be both.
The point is that their exists a flaw in the reporting and ad display technology in either Google or Yahoo which resulted in the my ad codes in adsense page impressions in Yahoo Homepage.
Keywords: Google Losing Money, Yahoo Losing Money.
Result: Google started charging minimum CPC for every campaign now.