AdSense Specials

Google AdSense: New revenue share structure

As the change will only come into effect at the beginning of 2024 and the effects will only become apparent in hindsight, we will have to wait and see what it means for each individual. The exact date is not yet known.

The current revenue sharing solution

When advertisers book ads, they are prepared to pay for them. This is the revenue generated by the ads. The advertiser then pays Google and you get your share in the form of a revenue share. The revenue share percentage has remained constant over the years: 68% for AdSense for content sites.

The basis for the revenue is the click on an ad (CPC - cost per click), which accounts for over 90%. Only then do the corresponding costs arise for the advertiser and the revenues for AdSense and the publisher.

CPM (cost per thousand) bids, i.e. 'cost per 1000 impressions' pricing models, have so far played a secondary role for publishers.

The new revenue share

From the beginning of 2024, the second pricing model will come to the fore: CPM. The publisher will then receive 80% of the revenue share, but the share that Google Ads or another ad provider receives will be deducted first. Here is a little calculation:


The result is that the publisher share remains at 68%. AdSense states:

In addition to the new method of calculating participation, the basis of the calculation is also changing. It is no longer the clicks on the ads that matter, but only the CPM. As the majority of advertisers will continue to be charged on a cost-per-click basis, there will be a gradual shift from CPC to CPM. The impression RPM will be the key metric in the future.

Of course, impression RPM is not the same for everyone. Again, advertisers' bids are determined by region and site content. A bid in the US for a financial keyword will be higher than a bid for a film industry keyword in India.

The evolution of impression RPM will also allow us to compare who will be winners and losers of the new revenue share.

The official interpretation is that the aim is not to pay less to publishers or to increase revenue for Google. As the current and future revenue and payment process is not transparent through automated processes, other interpretations will no doubt soon be making the rounds in the forums and social networks of this world.

Competition from other ad networks and platforms is likely to limit the impact on publisher revenues.

What can I do as a publisher?

Right now, you don't need to do anything. Over the course of the next year, there will likely be an update to the terms of service that all publishers will need to agree to if they want to continue working with AdSense. Changes to code or ad placement, whether manual or automated, are not required.

One possible response would be to place more ads on your site to increase the number of impressions. Google refers to the Better Ads Standard and guidelines that limit this strategy. If you are already using automatic in-page ads, you will not be able to increase the number of impressions significantly, as AdSense already places too many ads on the pages, in my opinion.

Another option is to look at the value of the ads. Firstly, ads for 'money keywords' will generate a higher impression RPM. Secondly, the 'Active View Viewable' value should continue to drive the value of impressions. This value is likely to be diluted by an increase in the number of ads.

In controlling, there will be a shift in the measured values: From click-through rate and the ever-popular CPC (cost-per-click) to the already important page RPM and, of course, impression RPM.

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Update 2.2.2024

With the CPM rising steadily over the last few months, it seems that the first accounts have made the switch today. For me (and some others from the Webmaster World forum) the CPM is now at 100%.



Interestingly, clicks, click rate and CPC are still displayed and are within the usual range for me.

Switching from clicks to CPM

Google has not yet said anything about how advertisers on CPC will be converted. We can only speculate at this point:

Google has a lot of experience with analogue conversion in ad space auctions.

I assume that this estimate is now also the basis for conversion. This would mean that, as predicted by Google, nothing fundamental would change. Pages with a high click-through rate are also more likely to receive ads, which are then estimated to be worth more. The basis for this is likely to be the comparison in the ad space auction. This process is described in the Google Ads Help:

Google Ads Help

See the new article for more updates:

CPM instead of CPC: the new revenue model and your optimisation strategy

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