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Enough hyperventilating about AdSense
Thursday, 28 September 2006
There's been a popular theme on lots of blogs lately about how much money there is to be made from Google's AdSense advertising program. For those not in the know, this basically involves earning money from Google ads like the ones on this site. Now AdSense is a great program, and I'm happy to make some good spending money from it every month.
But I think a lot of people are getting carried away with imagining how rich starting up a website and putting AdSense on it is going to make them. Judging by the hyperventilating blog posts I'm seeing around the place, some are planning to make a lucrative career out of this scheme.
Maybe they will and maybe they won't, but I think it's time to get some perspective. If websites and contextual advertising are your strategy, how much money can you reasonably expect to pull in?
Well, let's look at a recent survey of the top AdSense earners for a bit of an idea. According to this, the best paid person is earning $300,000 a month, with Digg coming in second at $250,000 a month.
Pretty good money, you might be thinking. If they can do it, why not me?
Well, considering there are millions of sites out there running AdSense, your chances of getting into the top 10 are almost zero. You probably have more chance of winning the lottery. Digg is a great site and worthy of its fame, but seriously, what hope do you think you have of actually achieving the same lofty heights it's reached?
And even if you get there - even if you make it to the top of the AdSense pile, the rewards are relatively modest.
"Relatively modest?" I hear you say incredulously. "$300,000 a month is relatively modest!??"
Well yes.
For being at the very pinnacle of your industry, it is. Compared to almost any other industry you can name, $3.5 million a year for the top player is absolute peanuts. Here are some comparisons from last year just to make my point:
- Investment bank Goldman Sachs paid its 24,000 staff an average of $520,000 each. That average includes a lot of secretaries, mailroom boys and security guards. The CEO got $29 million.
- Medium-sized Australian investment bank Macquarie Bank paid its five top executives more than $10 million each.
- The five top paid executives in Silicon Valley each earned more than $70 million.
- The CEO of Capital One earned just under $250 million.
- Steven Spielberg got $332 million, Howard Stern $320 million and Oprah Winfrey $225 million.
- Tiger Woods got $90 million, Michael Schumacher $58 million and Dan Brown $88 million
- I don't even want to think about what Bill Gates and Warren Buffett made.
As you can see, in the grand scheme of things, $3.5 million for beating all the other websites out there is peanuts. In fact, there have been periods in my life when I've made more than some of the top 8 AdSense earners listed in the survey just from my day job.
Don't get me wrong, AdSense is a great way of making a bit of money on the side for building interesting websites, but the chances of it making you rich are virtually nil. If you're really lucky, you might make a comfortable living from it as those famous for doing so have demonstrated.
I use it myself on my various sites, and it gives me a nice little bonus every month. Perhaps AdSense will become a big enough market one day to let people build some serious wealth from it, but at the moment it's hobby income really. There are plenty more sure things in other industries that are available today.
So keep building nice websites and putting contextual ads on them, but don't focus on it as your only way to make money. See it for what it is, a nice way to earn a bit of money doing something fun.
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