Ok, I have several sites I have Adsense on and one of which, the keywords are low value and I only earn .03-.05 per click. The site gets about 10,000 page views a day, so I do make a little money from the site. Just out of curiosity, I created a campaign for the site in Adwords. For all the keywords that I only earn .03-.05 per click, Google Adwords was saying the minimum bid was $1.00 or more! Obviously, Google is making a lot more than they claim! Or am I missing something here?
I remember reading something recently that they made like 35% of the revenue per click, but I am really starting to doubt that now. I guess you do have to work at Google to really know.
The bid quoted is for the search network - i.e. that's how much it costs to put your ad on Google's site, not yours. And their site gets a lot more traffic than yours.
Google gives publishers about 74% of what the advertiser is charged according to their financials. This includes network, so it could be a little less, but all adsense publishers receive the same percentage. As stated, bids are for google search, not content. Many publishers avoid the content network (which is what adsense runs) because of click fraud. The bids are almost always a lot less. You may see $1 bid for search, but high bid maybe only 10 cents on the content network. Factor in smart pricing (how well you site converts for the advertiser compared to other sites) and you might only get a few cents.
I've also wondered about this for so long. It's definitely not 5-10%. It may be up to 50%, we never know unless we work for Google! But I bet they're making a lot!
This has to do with Adwords, as well as Adsense. Do you know of a better forum this should have went in?
Here's the biggest error and biggest misconception people getting into Adsense do. They type in generic keywords into Google's keyword tool. They see a certain amount under the estimated average CPC column. They assume a few things from this, all of them wrong. First, that all advertisers are paying that amount. Second, that Google pays them that. What you have to realize is that this is an estimate of how much an advertiser will pay to be in the top three positions on the search network. It does not reflect what the best advertisers are actually paying. The estimate is based on typical quality score. If you have a good QS, you can beat it. For example, I've just acquired a new client. The estimates for some keywords were in the $3.20 to $5.90 per click range. Actual cost so far: $1.10 to $1.33 and my QS is not even that good. I expect to lower this over time. One thing most webmasters don't seem to realize is that 1) the tool is for Adwords users (advertisers) and 2) for the search network. As someone using Adsense, you are part of the content network. Not the same thing. The prices paid per click can be much different. There is the perception among advertisers that the content network is cheaper. It can be. So if you research my client's niche and see $6 and think wow, think again. He was paying $1.90 before and $1.25 since I took over a week ago (on the search network and going down). Even if he was paying that on the content network (he's not as I suggested he shouldn't) and Google was paying 50% to you, you'd get $0.63, a far cry from $6. Add to the fact that most advertisers I know bid much less on the content network (often $0.50 or less), you see now why you only get pennies.