AdSense Revolution

Maybe a little off-topic, probably this is the kind of discussion you would see at Many-to-Many, but it is about the web and may be great. It's about Google's AdSense and how it will change how we produce information on the internet.

Google's AdSense is an advertising program directed toward allowing sites to share Google's advertisers. The procedure is simple: you find a space in your site to put some ads and Google will provide them; each time your visitors click on an ad, you are credited some money into your Google's account and after you have acumulated U$100,00, they will send you a check so the virtual currency can be converted to real money.

So, how can this change anything on the internet, other than making sites look uglier? Two simple facts. One: ads showed on your site are automatically related to your site's content. Two: the amount you receive from each click greatly varies according to the advertiser. Basic conclusion: the amount of money you will make greatly depends on your content.

What makes AdSense different from other affiliation programs is precisely its content-related nature. This is done through Google's search engine. Once it crawls and index your site it has access to your content and will select the ads to be displayed based on existing keywords.

To see why this changes everything, first we must understand how much is earned for each click. Advertisers wanting to advertise via AdSense will enter in a sort of auction for keywords. This auction is administered by Google. Imagine you are one of this advertisers and you sell shoes. You surely would like that your ads to be shown in a shoe-context, that is, in sites that talk about shoes and related issues. Thus, you would bid for keywords such as "shoes" or "feet". If you don't have much competition for the keywords, the price will end up low. Low prices are something like U$0,05 per click. However, if you happen to have a lot of competitors bidding for the same keywords, the price may go straight up. Actually, there are cases of keywords valuing close to U$100,00.

The amount the advertiser pays Google is directly related to how much Google's AdSense partners (i.e. you) end up receiving. The exact amount is not known, but it suffices to say they are directly proportional, that is, the more the advertisers pay the more you earn. The bottom line is, if you happen to have a site about, say, forms of cancer and "cancer" is a high-valued keyword to advertisers (it actually is), you will much likely earn more than if your content is about shoes.

AdSense provides a way for small content generators/managers to receive some income from advertising without the hassle of dealing with advertisers. What happened before, and actually nowadays, is that someone very fond of airplanes models would make a site about this, just to share her or his experience with others. If the created site ended up receiving a lot of traffic, maybe some companies (selling engines or RC units, probably) would want to advertise in the site for some amount. Even in cases where someone would build a site having the possibility of advertising in mind, this site would primarly be built based upon the creator's interests and knowledge about the subject. There was no great interest for the creator to improve site's content, other than personal satisfaction, since the probability of profits was too low.

Rare were the cases where a content creator would come to a company and say "if you give me money, I'll build a site about something related to your product and I'll advertise your company in it". Mainly, this was done by huge companies in big portals. For small creators, content came before and without connection with incomes from advertising.

In the beggining of AdSense, people already owning a site would opt to having Google's advertisers in hope to receive some extra revenue. However, once it was discovered that having some high-valued keywords in the site would boost the value per click and, thus, general income, a form of content generation once only available to big portals became available to any internet user: content generation by demand.

What is happening is that people are taking some major keywords and building content around them. For example, one of the highest-valued keywords is, at the time, "mesothelioma", a kind of cancer, and hundreds of sites were built about this just because it is a high-valued keyword. This is precisely a market mechanism, with supply and demand well defined.

This creates an information market of proportions never seen before, and will change much of how content is created and how content evolve. Keywords are valued, ultimately, by the amount of people looking for them in search engines. And now we have a feedback loop that generates content on demand: more content is generated around the information that is most searched. This happen in a distributed way and due to a simple incentive: money.

Obviously this happened before AdSense. Vertical portals were built to exploit a known demand for specific information. But now the scale is of many order of magnitude bigger. Anyone can find out the highest paid keywords ("adsense keywords" are among the highest paid keywords), build some content about that and throw on the web, no matter how little it is. It doesn't take much to realise that this will generate a lot more of informational junk. Even now, many sites about "mesothelioma" are just some aggregation of information found in other sites or even straight copies. But this increase on supply may be good. Competition is the key.

Just throwing on the web some content, even if it is about a high payed keyword, doesn't mean people will visit. Moreover, it doesn't mean people will click in the ads shown. For that to happen, you must have your site known, and today this is done mostly by "viral marketing", where people talk about the site, and by search engines (i.e. Google itself). Both carry some form of quality compensation scheme. People will only talk about what is worth. If you write 1500 times "mesothelioma" on a page people won't care, won't talk and won't visit.

PageRank and other ranking schemes for search engines try to show relevant sites on the top of resulting queries. This is usually done by considering keywords, keywords position, links and linking sites. This is a fairly efficient method that rule out sites that are not considered by others (no site links to them), are irrelevant (no keywords) or does not point to more information (no links).

Even though algorithms such as PageRank are exploitable, they provide a way to automatically force content to be relevant in order to be shown to the consumers. Allied with viral marketing, we have another feedback loop, making it interesting to content providers seeking profit with AdSense to create relevant content. Naturally, specialists in the mattering suject will have an advantage, but anyone capable of putting enough effort into information gathering and aggregation can provide information that is indeed relevant to the final consumer. And they will profit with those.

All of these can be resumed in the following sentence: since more quality will improve ranking and better ranking means more visitor and more visitors means more profits, there is a direct incentive for anyone using AdSense to improve quality of information being provided. Multiply this by millions of users, we may have an overall increase of quality and availability of information on the web. An emerging side effect of a simple market mechanism.

Should we expect such increase of quality of information in short term? That depends. One should first verify how much access comes from viral marketing or from queries in search engines. Intuitively, it seems that search engines are becoming increasingly important, if not already the major responsible for information retrieval. If this is true, engines will have to create even better ways to rank information. In particular, the problem with the generated market is that a cheater could profit, thus engines will have to deal with exploitation of their ranking methods (just to start, a way to detect if a site is very similar in content to another and which was published first). An arms race is expected to gain strength, with cheaters creating new exploitations and search engine companies creating new methods to avoid them. Artificial Intelligence will play a gigantic role in all of this. Eventually, it may become so hard to cheat that it will be easier just to focus on content and make a better site.

Concluding all, AdSense, and other related programs (Yahoo is working in something similar) will change the way information is created on the web. The generated market mechanism will improve both quality and availability of information. Information will be more dynamic and will change to fit new demands. The drawback, of course, is that we may have ads in every place of every site. Hopefully, the next stage is to create an evolutionary pressure towards sites with less ads and, eventually, equilibrium will be found.

Read also a small introductory guide to Adsense.

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