Google Preempts Apple iAd by Revealing AdSense Revenue Share
Google May 24 came clean on its revenue-sharing practices for its two core AdSense advertising products, weeks before Apple is expected to turn on its iAd platform.
Google said it pays its "AdSense for content" publishing customers 68 percent of the money the search engine earns from AdSense advertisers for content ads that appear on those publishers' Websites. This revenue split has been the same since AdSense for content launched in 2003.
Google said it pays 51 percent of sales to publishers that use its "AdSense for search" product, which lets publishers place a custom Google search engine on their sites and make money from ads shown alongside search results. This revenue ratio has remained static since 2005, when Google increased the share.
Google said it keeps the remaining portion of sales from both AdSense products-32 percent from AdSense for content and 49 percent from AdSense for search-to cover the costs it incurs from building products and features that help its AdWords advertisers to serve ads on AdSense partner sites.
Google also uses the money to create new advertising products and features for its publishers and advertisers, the company said.
Google will show the revenue shares for AdSense for content and AdSense for search right in the AdSense interface later in 2010. Google offers different sales split terms for larger publishers, the company said.
Neal Mohan, vice president of product management for Google, said in a blog post AdSense revenue splits could change if the costs Google incurs by supporting them increase, but noted the company doesn't have any current plans to change the proportions.
Google is not releasing revenue splits for AdSense for mobile applications, AdSense video units, AdSense for feeds or AdSense for games "because they're quickly evolving, and we're still learning about the costs associated with supporting them," Mohan said.
"We hope this additional transparency helps you gain more insight into your business partnership with Google. We believe our revenue share is very competitive, and the vast number of advertisers who compete to appear on AdSense sites helps to ensure that you're earning the most from every ad impression."
Google's surprise ad-split revelation came after Apple unveiled its iAd ad platform with promises to give developers 60 percent of the ad revenues their applications garner. Apple will launch iAd for its much-anticipated iPhone 4 smartphone, possibly June 7 at its developer conference.
The ad revenue split reveal also comes at a time when Google has been browbeaten by regulators in the United States and overseas to be more forthcoming about its business and data collection practices.
Google watchers had also been expecting Google to cough up the figures in response to an investigation by the Italian antitrust authority after newspaper publishers complained that Google was abusing its position in Italy.
More broadly, Google has made a concerted effort to be more open in response to consumer advocates complaining about Google's black-box-like nature.
Google launched the Data Liberation Front to more easily let its Web services users move their data in and out of Google's applications, and later launched the Dashboard to give users a consolidated view of their application data.