an internet merchant weighs in...

[markp-r]

As an online merchant, do I risk losing product sales if I optimize my website for AdSense ads?

That's a big question! One I had to wrestle with myself. Here is where I finally came down on the matter:

In looking back at years of server log stats, I came to the realization that 8.2 out of every 10 visitors who come to my site leave before they ever come in to see my selection. That's been pretty consistent for years (I really need to hire a good copywriter).

I have clicked Adsense ads on other sites that I visit when I'm looking for relevant information or a specific item. I have found them to be a great service to me when I'm looking for stuff. So I actually use the ads when I surf others websites.

So, I figured if 8.2 out of 10 people were going to leave my site anyway... I might as well offer them a targeted exit point.

So, two years ago I decided to try AdSense. It didn't really make me much money until I learned the valuable info in Joels book. Now I have more people choosing to leave my site via targeted AdSense ads.

My product sales have actually increased over the years as well, so I don't personally think I'm losing customers to my competetors. Though I understand the concern and possibility.

I truly believe in the visitor. If they find that I offer what they are looking for, then I'll get the sale. If I don't have what they thought they would find, then I'm happy to provide the targeted ads that AdSense offers. And, it's nice to generate a revenue stream from visitors who are not buying my product.

That's my spin on it. Though I'm sure it's different for different people. We must each decide what's best for our long term bottom line - or at least benefit.

[Matthew]

This really boils down to conversion mathematics. If you are able to calculate the conversion rate of your website before and after adding the Google ads then you can more easily answer your question.

For example, if on average 2 out of 100 visitors (2%) buys your product and you average $100 a sale, you are making about $2.00 per visitor ($200 * 1%). Another way to look at this is that you have 99 out of 100 visitors making you no money.

If, after adding your Google ads you notice that your conversion rate decreases, you need to see how much you are losing because of that. For example, if your site conversion rate decreases to 1% you are now only making $1.00 per visitor from your sales. If you have 1000 visitors a day you are losing $1000.

Is it worth it? Well, in order to be worth it in the above example you have better be making at least $1000 in Google Adsense revenue.

The above is an extreme example, but it gives you a good idea of the mathematics. If you have noticed that your sale conversion rate (not just your sales) have not decreased, then you have made the right choice by adding Google Ads.

I would strongly recommend not having ads on your order pages though, as this can be the biggest spot where you lose your visitors. Have them instead on product information pages, your home page, and any other resource based pages that you have.

[markp-r]

Matthew,

Thanks so much for doing some number crunching for us:

This really boils down to conversion mathematics. If you are able to calculate the conversion rate of your website before and after adding the Google ads then you can more easily answer your question.

I have to admit, I'm totally not up to speed when it comes to all of the hard numbers, analysis, and projections. This is one of the things that slows me down as a business person.

Anyway, Matthew, thanks for laying things out so clearly. Have you ever thought about holding an online chat forum that could help teach some of us numerically-impaired the basics of the numbers we should be learning?

My lack of knowledge and understanding can cost a great deal over the course of time...