Don't Advertise on AdSense if You Use AdWords

So here's the problem:

Google AdWords has recently adjusted their algorithms to screen advertiser landing pages for quality content and adjusted the cost of their AdWords clicks accordingly. On the surface it sounds like a good idea. The premise was to get rid of all those made for AdSense sites that seem to be popping up everywhere. What those sites were doing was bidding on low cost AdWords traffic and optimizing their landing pages with high converting keywords. They'd pay five cents for ten clicks and would make a buck from one person clicking on their ads. The idea got so out of control that it earned the nickname "click arbitrage."

In response to click arbitrage, Google said they were going to do the above monitoring of landing page quality which was all well and good. What they really started doing however was monitoring which landing pages were running AdSense code. They not only increased the AdWords cost per click for those sites, but also lowered their AdSense payout! Based on my data, I can see my cost per click rise and fall when I turn my advertising campaigns on and off.

Don't get me wrong, I'm not trying to scam Google with click arbitrage, but the websites I run are all content heavy like this one and almost all of them sell a product. Until now, my strategy has been to split my revenue between advertisers on the content portions from my organic traffic while simultaneously using AdWords to promote my products.

In the end, Google has shot itself in the foot and I'm caught in the middle. If I direct traffic using AdWords to my saleable products, I'll likely lose advertising revenue. If I turn off my advertising, I'll lose sales on my products. To continue using Google for one or the other is a lose lose situation.

Here are the options I'm exploring:

Setup separate websites. One for saleable products and another for content sites. The problem: I notice that Google is tracking my AdWords clicks between websites. I can only assume they'll punish my earnings if I share traffic between the sites which means no cross-promotion and that's bad news.

Ditch AdSense. This is unlikely since it's still paying off without the overhead of online sales. Mark my words there will come a time when this is no longer true. Don't put your eggs in the AdSense basket with hopes of retiring.

Ditch AdWords. This is my most likely avenue. I spent almost $40,000 with AdWords last year. This year is almost over and Google will be lucky if I clear $5,000. I currently have accounts with Yahoo! and MSN, so I will probably be putting my money there shortly. Fortunately, I've had a long enough run that most of my sites are well established and I can count on more organic traffic from outside links, searches, etc.


click the graph for a larger image

Here's a handy little graph from one of my content/product sites Informed Trade International. The blue line represents AdWords dollars while the pink is my AdSense Revenue. The vertical red line indicates the start of a major advertising campaign.