Should you Monetize your Site with Adsense or Affiliate Programs?

July 9th, 2008 | 33 comments

adsense or affiliate programs A member of my Private Forum recently asked the question “How do you decide whether to use Adsense, affiliate programs or both on a site.” Most of the questions asked by my forum members stay behind closed doors, only for the members, but I thought this one was a great topic for discussion here at the blog.

This is a popular question on blogs and forums and the answers always vary from “Adsense is a waste of good traffic” to “Adsense is GREAT.”

The truth is that there is no definitive answer. You simply have to test it out and see for yourself which is the more profitable monetization model for each of your sites. Each and every site is different and just about every site has different visitor demographics etc.

Here are a few examples of what I mean.

This very blog does much better with highly targeted Affiliate Programs (keep in mind this is just an example. The purpose of this blog isn’t to be a direct money maker) than it does with Adsense. A few months back I did a little testing with Adsense. The blog earned something like $10 in one week with well-positioned Google ads. This week alone the blog has generated several sales to Joel Comm’s Adsense Secrets, which equals much more than the $10 Adsense generated. (ironic huh )

I believe the reason for this is because:
1. The affiliate program is highly targeted to this blog.
2. This blog is targeting other marketers, who also use Adsense (we are accustomed to ignoring adsense ads)

If this blog were not marketing related, I’m sure the adsense adverts would have converted much better, but then again, I would need to test to find out for sure.

However, most of my mini-sites do much better with adsense, while a handful of them do better with affiliate programs and some do well with both adsense and affiliate programs.

The argument is often made that to lose a visitor for pennies through Adsense is to leave money on the table (would have made more if it were an affiliate link.) In some cases this is very true, but in other cases that $0.40 click is more than you would have earned without adsense.

Many markets are full of people who aren’t necessarily buyers (for instance.) They’re looking for quick, relevant information, which makes adsense ideal. They find a site, but it doesn’t have quite what they’re looking for, so they click a Google ad, which has a listing that is more relevant. The advertiser gets the visitor, the publisher get a few cents (sometimes a few dollars) and Google gets their cut… everyone wins.

In this situation if that Google ad were replaced with an affiliate banner or otherwise, no one would have won… the visitor isn’t looking to buy.

On the other hand some markets are full of buyers like weight loss. In most cases a relevant affiliate program is going to outperform google ads, but you should still test it out first.

So, if I haven’t already made it clear enough, it’s all about testing. Test, test then test some more. While you’re testing, remember that not all affiliate offers perform the same. In some cases adsense will perform better than an affiliate offer, but that doesn’t necessarily mean adsense will outperform all affiliate offers.

Be sure to test accurately. Use section targeting to ensure your adsense adverts are 100% targeted and test out a few different affiliate offers before making your decision.

After a few weeks to a month of testing you should know which is better for your site(s.)

33 comments

hiking excursions
9th July, 2008 at 8:09 pm

I also think how one chooses to pursue money making and the time they have is very critical in the decision as well. I barely have any free time and could never find the time to market to a list or keep track of affiliate programs, therefore adsense fits into my lifestyle much better!
Shaun
9th July, 2008 at 8:10 pm

Yeah, I completely agree. I tested it out and found out that I was making about 1/40th with adsense what I was making with affiliate programs with the exact same traffic. Most places aren’t nearly as extreme…marketing to marketers just has it’s little odd quirks.
Jordan McClements (11 comments.)
9th July, 2008 at 8:38 pm

I agree.

Try stuff.
Test It.
Try more stuff.
Test it.
Repeat.

For my site, Adsense is the only thing that works for me..

In my best month I made over $1000 with Adsense (although Google do seem to be giving me a smaller slice of the pie these days!).
Trent Brownrigg
9th July, 2008 at 9:12 pm

I agree that it completely depends on what type of site you have and who you are targeting. It also depends on ad placement, where your visitors come from, and a whole host of other things. I personally go with a combination on most of my sites and that has done well for me for the most part.
Amanda (1 comments.)
9th July, 2008 at 11:39 pm

One thing I don’t like about Adsense is that it gives me no control over which ads are displayed on my site. This isn’t a big problem with every niche, but for things like make money online and related niches, there’s just too much crap out there that I don’t want to support.
Cheap Auto Insurance (4 comments.)
10th July, 2008 at 2:00 am

The earnings for me is depend on the niche, some niche do well in adsense and some do well in affiliate program, of course as you said we have to test it out and see which convert better! Great post!
internet marketing blog
10th July, 2008 at 2:57 am

Very good topic Josh.

We do need to test and see which is the more profitable monetization model, and that means we need to build traffic to the site first and start to get regular traffic before we start putting up ads or other means to generate income as putting them up early on might turn people off.

Also, when someone lands on your page, and before going anywhere else, clicks an AdSense ad, won’t that count for a bounce?

Good stuff!
Roy
Juhani Tontti (9 comments.)
10th July, 2008 at 5:37 am

Good post Josh,

I have found out that AdSense is an alternative for affiliate programs, i.e. when a visitor clicks one or a few links, if he clicks AdSense ads, that is away from others.

Now the big question is, if I think the money only, does AdSense still bring more income regularly?

I have experienced that AdSense income is quite sure and regular one, so I keep it on my pages.

I have also thought, whether AdSense fits to my Business Plan, or is it an additional service to my readers, and my answer has been: YES!

Juhani Tontti
South Bay Mom
10th July, 2008 at 5:58 am

I have Adsense and Affiliate Programs on my sites and make substantially more (at least 10 times more) with Adsense.
Neels Theron - Non-Guru Road To Making Money Online (9 comments.)
10th July, 2008 at 6:47 am

I use both on some sites and just Adsense on others. Both can work – it depends on your site and your visitors. So, yes, test and test again.
John (3 comments.)
10th July, 2008 at 7:41 am

Interesting article Josh,

Testing is definitely necessary, but IMO your site’s content is equally important. I think of the wily, old fisherman who knows what bait (content) to put on his hook to catch the fish he’s after. General content – (adsense) catch anything that comes along, specific content – (affiliate) catch the fish you really want.
Step-by-Step Affilite Marketing Guides (14 comments.)
10th July, 2008 at 8:15 am

This is a great post, I will post a link in my blog to it, very comprehensive.

I think it is key to test what works on your sites, unfortunately this biz is trial and error on many levels and it is the part that I hate the most, testing and analysis.

Thanks Josh,
JR
Mrs S (1 comments.)
10th July, 2008 at 11:38 am

I’m testing adsense and amazon at the moment – adsense seems to do ok on my Disney world blog where there are lots of relevant ads. I tested them out on my book reviews blog and not so good – so now I’m testing various amazon ads and being more targeted
Josh Spaulding
10th July, 2008 at 2:25 pm

@ Amanda – You can restrict sites with their competitive ad filter, but I do know what you mean. Paid surveys and other crappy ads show up on IM sites and you have similar poor ads on other niches. I guess it’s just one of those things.

@ Roy – Yes, that would be a bounce, but who cares? I don’t look into my bounce rates much. There are just too many factors you need to calculate into the equation to get an accurate assumption from bounce rate stats. What I care about is visitor retention. If they come back that’s good if they don’t that’s bad
Hendry Lee (7 comments.)
10th July, 2008 at 4:14 pm

For my niche web sites, combination for both AdSense and affiliate programs are always the best.

Affiliate earnings decrease with the addition of AdSense but on the long run, my earning increases.
Michael Darrell
10th July, 2008 at 5:18 pm

A balanced combination for both adsense and affiliate programs are always a good thing. How ever visitors retention will always be best. If they come back thatâ€™s good if they donâ€™t thatâ€™s bad. Thats why this is always a great blog, it would still hold retention. even with out adsense or affiliate programs.
Gary Hicks
10th July, 2008 at 10:29 pm

I think the success of any form of offer you want to use to monetize a page is highly dependent on how relevant that offer is to the main keywords on the page and what your readers motives are for reading the page. Can you offer them some kind of product to consume, or are they just after free information or entertainment?

I would also say that a relevant affiliate offer is usually better than a relevant adsense offer, so if you can find affiliate offers that really offer some kind of ‘solution’ to a ‘problem’, then I would go with that. If you can’t find a relevant affiliate offer, then go with adsense, because a little business is better than no business!

But whatever you do, always make sure your content is good, because you’re unlikely to monetize crappy content with any kind of offer!

Hope I’m making sense!
Neil
10th July, 2008 at 11:27 pm

Hi Josh

I agree with your suggestion above that people that use Adsense on their own sites won’t click on it. I think it’s partly because of the rule about not clicking on your own adds – you get used to not clicking on them.

Neil
adjustable mortgages (1 comments.)
11th July, 2008 at 2:23 am

i would think that the majority of adsense users never venture much into affiliate programs, that maybe why Google is getting rid of referrals at the end of the month.
Preschool Activities (5 comments.)
11th July, 2008 at 3:41 am

Great article! I have found the same with most of my websites. Adsense works best for me especially because my visitors seem to be looking for information and freebies..more than physical products (eg. toys, clothing etc.)

Adsense really brings up such a variety of keyword specific ads that my visitors really hit them.

I am experimenting with getting more ‘specifc’ products or affiliates, maybe that will make a difference. All in all…affiliates haven’t worked as well up to now.
dennis
11th July, 2008 at 4:47 am

i think josh got it just right when he says that it depends on the site and that to really see results you have to test test and test.
Step-By-Step Affiliate Marketing Guides (14 comments.)
11th July, 2008 at 6:41 am

I also notice that on most of my sites, banners do worse than any other kind of ads. People click a lot but the conversions are terrible.
Nesco Food Dehydrator
11th July, 2008 at 4:30 pm

Yeah, AdSense is great…but if you don’t get enough traffic I heard that Google can penalize you when you have AdSense ads…low CTR is not good. If you do AdSense, you want to do it well.
Josh Spaulding
11th July, 2008 at 7:20 pm

@ Gary Hicks – Great advice… I agree with every word. To add, the creative you use for your affiliate offer can make or break you.

@ Nesco – It’s called smart pricing. It has nothing to do with your traffic volume, it’s all about the quality of traffic. With that being said, the CTR is said to be a factor in Google’s determination of whether or not they “smart price” your account. If many or all of your sites are getting extremely low CTR’s (3% for example) there’s a good chance the low CTR is due to untargeted traffic, which leads them to “smart price” your account.
Charles marriage
16th July, 2008 at 4:26 pm

I only use Adsense, and only then because I was getting a lot of traffic that didn’t help my main business (holiday lets). It was all basically an accident, and I don’t really know how to make affiliate advertising work !
Paul Elliott
21st July, 2008 at 10:39 pm

Thank you for the benefits of your testing and observations about the results, Josh.

As with any marketing, testing, testing, testing is paramount . . . if you use the results.
Neil
8th August, 2008 at 7:42 am

Hi Josh

I’ve noticed a drop in click values on Adsense recently. Have you noticed the same and do you think it’s because of the economic climate?

In response to this I cut down on the number of adverts showing on my pages (from 2 towers to 1) to see if this would get rid of the really low paying ads. Initial results are encouraging but it is too early to say whether it has worked.

What’s your view on optimising the number of ads displayed on your sites?

thanks

Neil
Josh Spaulding
8th August, 2008 at 12:39 pm

@ Neil – I haven’t noticed a decrease in CPC’s but I have noticed a slight decrease in overall earnings. However, that’s probably because I’ve been spending more time with my email marketing efforts than my mini-site efforts.

It all comes down to what converts. If a banner isn’t getting any clicks remove it.
Entrepreneur Blog
11th August, 2008 at 9:21 pm

As you said, I think it all depends on your niche. There are a lot of niches that Adsense will only pay a few pennies per click while other sites (especially health and finance) can make a killing off just a few clicks.
Registry Fix Review (6 comments.)
30th August, 2008 at 5:13 pm

Article quote: “Many markets are full of people who arenâ€™t necessarily buyers (for instance.) Theyâ€™re looking for quick, relevant information, which makes Adsense ideal. They find a site, but it doesnâ€™t have quite what theyâ€™re looking for, so they click a Google ad, which has a listing that is more relevant. The advertiser gets the visitor, the publisher get a few cents (sometimes a few dollars) and Google gets their cutâ€¦ everyone wins.

In this situation if that Google ad were replaced with an affiliate banner or otherwise, no one would have wonâ€¦ the visitor isnâ€™t looking to buy.”

Good point, Josh. But aren’t there some instances where having Adsense on a site becomes more a distraction and a leak factor (allowing visitors to “leak off” your pages by clicking on ads), especially if your site is targeted to affiliate product sales.

For instance, I have several review sites that I wouldn’t for one minute think of adding Adsense to, even though they do attract a good number of visitors who don’t end up purchasing anything. I want my visitors focusing on the problem at hand (finding a solution to whatever problem they came to the site to investigate information about), and not becoming distracted by ads.

On the other hand, a blog is a totally different animal altogether. I can see how ads of some kind (whether Adsense or targeted affiliate banner ads such as you have here) would add to the monetization of the site!
Josh Spaulding
30th August, 2008 at 5:19 pm

@ Registry – That’s an odd name “Registry.” Have you read my comment policy?

“But arenâ€™t there some instances where having Adsense on a site becomes more a distraction and a leak factor”

Yep, that’s why I said “You simply have to test it out and see for yourself which is the more profitable monetization model for each of your sites. ”
Jonathan@Friends&Money (4 comments.)
16th December, 2008 at 1:14 pm

Josh, I couldn’t agree with you more, Adsense is a useful tool but it is just one of many affiliate marketing tools. I do continue to use adsense on some of my blogs but I also have two or three blogs that use highly specialised afiiliate programs which generate a much better return sometimes 5 or six times more than I could expect with adsense
Michael T Anderson (6 comments.)
30th October, 2010 at 1:45 am

I’ve done better on my sites with Adsense too. It all depends on placement and I’ve found that different ad placements work better for different niches.