For a long time, I believed advertising with Google Ads was a magic solution to making money. Make a blog or some kind of popular site and put some ads on it and wait for cash to rack in. But the reality is different, and you don’t have to start your own super visited blog to observe it. All you have to do is look at numbers.
TechCrunch, the 400th most visited site (it’s a technology blog), had a revenue of about $200,000 in 2007 and is powered by advertising. Gawker Media, the owner of several popular blogs including Kotaku, LifeHacker and Gizmodo is estimated to have made 60 million this year. It’s also ad-powered. And then you got Facebook, the second most visited site in the world, with a revenue of $300 million in 2008.
Alright, fare enough. Your very popular ad-powered site could become a multimillion dollar business, but Google, being the most visited site, had a revenue of $21.8 billion in 2008. Yes, by just one position on the scale of site visits, Google has a revenue 73 times that of Facebook. Their revenue also comes from advertising, but there’s one big difference; Google is the ad reseller.
But besides the fact that Google has the successful version of the ad model online, which is to deal the ads and have them embedded in search, other observations that advertising otherwise sucks can be made much easier.
Take eBay, it’s a very good example. They have some advertising, sure (although most of it is actually advertising for eBay itself), but the real money they make is by charging sellers a small fee for each auction they put up. They also make money on the money the seller makes by taking in a small percentage. eBay’s revenue in 2008? $8.5 billion. eBay is only the 24th most visited site and makes 28 times Facebook’s revenue.
I don’t think I need to mention the panoply of other companies that make more than Facebook with absolutely zero advertising revenue to make my point clear. If you’re a small publisher dreaming of becoming rich on Google Ads, you might want to rethink your business model.
