Show Me the Money! Google Adsense vs. Amazon Associates

Show Me the Money! Google Adsense vs. Amazon Associates

To be honest, I thought my last post would fall on deaf ears.  I figured that nobody would be interested in digging through financial statements and other “boring” analysis of Google Adsense and Clickbank.  But I was so pleasantly surprised with the great response that I have decided to do a Part II of sorts and do some in depth financial analysis of the Amazon Associates program.  I want to thank those in the comments for requesting this – you ask for it – you got it!

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First of all, I want to be just as clear in this post as I was in the last post.  I am simply looking at how much money is being made by affiliates in each of these programs.  I am NOT suggesting that simply because more money is being spent on Google Adsense that this is the best monetization method for your website.  That is a different subject.  The way you make money on your website depends on the niche you are in and the keywords you are targeting.  I think its safe to say that it possible to make good money with Adsense, Clickbank, Amazon Associates, and many other methods.  I want to simply give you some insight into how much money is being made in these networks.

The Google Adsense Money

As discussed in my last post, Google Adsense is a beast of a program that spends approximately $8 Billion every year on its Adsense partners.  I have been lucky enough to dip my toe in the Google money pool and the water feels just fine!  The one additional point I will make here about Google Adsense is that its growing.  More and more money each year is being spent.  If you look at the same financial statement that I posted a couple of days ago, you will notice that in 2008 they spent $5.9 Billion.  Now just 3 years later they are expected to spent about $8 Billion.  So Google Adsense is a growing and robust ad network with a solid future in my opinion.

The Amazon Associates Money

Amazon Associates is a great affiliate program for a number of reasons.  First, you can make decent money by sending your traffic to a website that people already know and trust.  Second, you make money no matter what they buy!  If you send someone to Amazon through your affiliate link, you get a commission if the buy ANYTHING off of Amazon within 24 hours.  Pretty sweet.

So, how much money is Amazon actually spending on their Associates program?  Well, to be honest its difficult to pin an exact number on this, but with the numbers I dug up we can get a ballpark figure.  Because Amazon is a publicly traded company (AMZN) they are required to disclose their financials.  Here is a link to their most recent quarterly financials. They don’t have a line item for the Associates program specifically, they have it lumped in with their “Marketing” expenses.  For Quarter 1 of this year Amazon spent $327 Million on marketing.  Here is what Amazon says about this marketing number:

We direct customers to our websites primarily through a number of targeted online marketing channels, such as our Associates program, sponsored search, portal advertising, email marketing campaigns, and other initiatives. Our marketing expenses are largely variable, based on growth in sales and changes in rates. To the extent there is increased or decreased competition for these traffic sources, or to the extent our mix of these channels shifts, we would expect to see a corresponding change in our marketing expense.

The increase in marketing costs in absolute dollars in Q1 2011 compared to the comparable prior year period is primarily due to increased spending on online marketing channels, such as sponsored search programs and our Associates program, and on television advertising.

So, the $327 million also includes sponsored search, portal advertising, email marketing, TV advertising, and other marketing expenditures.  So, we really don’t know if the Amazon Associates program is 10% of $327 million or 99% of that number.  My guess is that its probably somewhere around 50%…just a guess.  After all this is ALL the marketing expenditures of the entire company of Amazon – surely a good chunk of it is being spent outside the Associates program (as they explained).  One last good thing to note about the quote from Amazon is that their Associates program actually grew from 2010 to 2011.

So overall, even if Amazon is spending $300 million a Quarter (an optimistic guess) on the Associates program, this is still only 15% the size of the Google Adsense program for Q1 of 2011 (Google spent $2 Billion on Adsense in Q1).  So, overall, WAY more money is being made on Google Adsense than Amazon.

Remember to Test

However, this doesn’t mean Adsense is better than Amazon for your website.  You need to test.  Just keep an open mind here.  If you ever hear someone say that no money is being made in Adsense – just remember the numbers!  Test your site out, give both Adsense and Amazon or even Clickbank products the prime spot (one at a time) on your sites for a period of time and see which brings in the most money for YOU!

In fact, I think this is a downfall of many sites (maybe some of my own included?) – they do not test out different methods.  If you get it stuck in your head that you are going to only sell Amazon products on your site for example – you could be missing out on giving yourself a serious raise if you never even test out how Adsense performs on your site.  This could go the other way as well.

I didn’t tackle the sales tax issue in certain states that is causing Amazon to drop affiliates from its Associates program in those states, because its really a different topic and I would have to do quite a bit of research myself.

So, overall – way more money is being spent in Google Adsense than the Amazon Associates program.  What are your thoughts?  Did I bore you for a second post in a row? Would you like me to dive into the financials of anything else?

 


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44 Comments for this entry

  1. Amazon is good and great during certain seasons. I am hoping to really get into it this time. I love the fact that you can get a product and a lot to choose form and market. Like you say it is important to test and test.What I know is people are buying more and more physical products online and this means there is greater opportunity for Amazon. Adsense is still great-so great-if only I knew how to pin it down.
    thanks

    • Spencer says:

      Yes, more people are buying physical products during certain seasons. This also would mean that more companies are advertising on Adsense during those same seasons – just something to think about.

  2. claudio says:

    I have tried Amazon, ebay, clickbank and adsense.
    I receive a biweekly check from clickbank and from adsense.

    Absolutely no luck with amazon or ebay.

    Clickbank is lucrative but requires way lot effort and strategy, the best way I found out is to do article marketing by doing a REAL review of a product you have tried and send the article to the top 10 directories. The main problem is tiresome… like 1 to 5 articles a day per niche to see real money and some tricks to bump the articles views, so your article is “featured”. If the product is good the returns are low. I promoted thuth about abs (great product) and registry fix (good product).

    Adsense is just great, keep building sites, building links, get ranking and traffic, income increases bit by bit. I love it.

    Thanks for the comparison, this will help other people to choose better :)

    • claudio says:

      the check from adsense is at the end of the month

    • Spencer says:

      Claudio – I’m in the same boat with you! Ive tried Amazon and ebay without much success. Obviously Adsense works well for me, but I still pull in a little with Clickbank each month as well. Thanks for sharing your strategy for doing clickbank reviews!

  3. Kasi says:

    It is a bummer about the “Amazon Tax” issue and that Amazon has cut ties with affiliates in at least 5 states at this point I believe. And more states are getting on board and have bills pending. It makes me a little hesitant to really get into Amazon Associates because what if my state is next? Someone on the WF is actually moving out of Illinois because of it. Moving would not really be an option for me, even if I hit the “big time” as an AA.

    • Spencer says:

      Unfortunately, this may be a killer for the Amazon Associates program – not sure they can get around it. This may be why they are doing more TV advertising and other marketing venues. Perhaps they realize that the Associates program is dying a slow death and they are investing in other avenues. I really don’t know. But I certainly wouldn’t move to a different state – that’s just dumb! All you have to do is open a new business entity (less than $300) in a state where the Amazon Associates program is alive and well. You can open a business entity in any state you want – although you might have to use a registered agent in the state, etc. But really, there is no need to move.

  4. Billy says:

    As Kasi said, the “amazon tax” is killing it for me. As a resident of north Carolina I can’t sell amazon products. I’m thinking of opening up a mailbox across the border in SC because I feel like I’m missing a great opportunity. I have never tried Amazon and right now I can’t but I’ve heard some great success stories.

    Great post again Spencer.

    • Spencer says:

      Billy – unless you have significant traffic, I wouldn’t worry about it. If you have a site(s) making thousands of dollars a month with Adsense or some other way – only then should you consider go to the lengths of opening a PO box in a different state etc. Although I guess its probably not that expensive. Also, remember that Amazon pays a very low commission rate, so you really need a lot of traffic to make it worth it.

  5. I have had limited success with Amazon compared to Adsense but I would always stick an Amazon widget on my sites to try to counter the “made for adsense” charge if I get a human inspection.

    • Spencer says:

      Interesting. Either way its probably good to test out both methods. I’m in the same boat though – Amazon just doesn’t do well on my sites (that I have tested).

  6. Carl Pruitt says:

    You often hear people complaining that Adsense is a risky way to monetize a site because a publisher might get cut from the program without knowing why, but Amazon drops whole states at a time.

  7. Reed says:

    Amazon and clickbank are the hardest ones for me –clickbank even more so. I’ve found the highest earning months I’ve ever had with amazon, are always around christmas, which have always been phenominal. Ebay though, is climbing past my adsense, at above 15 cents a click. However, you gotta love the dollar clicks adsense can deliver.

    Still looking for ways to make earning on amazon a year round thing, anyone have ideas? Heh.

    Also, great info spencer –I always wondered how big AA was. I do rember reading somewhere on the associates forum that stated how much was paid out to affilliates in 08 or so. Can’t really remember the number, but it was in the hundreds of millions.

  8. wai kei says:

    I would like to see a Ebay EPN vs others comparison as well to round it up for the big companies.

  9. Amazon Associates and Adsense are two very good monetization strategies for our websites. I guess it would depend on the type of niche we are in and the purpose of our website in choosing which would be the better match. When I start a website, aside from the usual things to research, like keywords, competition, etc. I also choose which monetization I will use. I also do some testing and refinement as I go along.

  10. I like using both. Adsense is more predictable in terms of earnings usually, while Amazon can vary wildly. I typically sell higher ticket items with Amazon, so when somebody bites, the commission for that day will often beat my adsense earnings for that day.

    Always good to have eggs in different baskets. I used to live in NC, but now live abroad, so unless Amazon starts banning countries too, I should be fine.

    • Boris C. says:

      Do you think if all states in America become excluded from Amazon Associates they will still keep their affiliate program for international affiliates?

  11. paula mooney says:

    Thanks for doing the follow up post… it helps to give me hope about the financial future of us online marketers.

  12. Boris C. says:

    Spencer, i would like to see EPN, Commission Junction and ShareASale analysis.

    Thanks.

  13. Lee says:

    I too have had more success with Adsense in the longer term. However, like Reed, I have had great success around Christmas time with Amazon, but usually only by running PPC campaigns for the 2 months in the run up to Christmas.

    After that it’s non-profitable! I have had some little successes with Amazon on organic listings here and there but nothing yet to write home about. I’m working on that one right now with little sites each looking at one specific product.

    Lee

  14. Edet says:

    How can one protect his/her adsense account from invalid click.

    • Dave Starr says:

      Pretty interesting topic indeed. I wonder that in all the years I have been dabbling with advertising and affiliate ventures, no one ever looked into the background to see just whhat is behind the companies we regularly work with.

      Incidentally … my wife works for an old-line, established advertising agency. Print, radio and TV … they do no online advertising.

      Recently her boss, one of the company directors, had a chat with me about “my little website hobby”. He was very condescending and “fatherly” with his advice, until he got a hint of what my CPM was. (only a hint, of course, can’t discuss that directly under Google TOS, remember).

      Safe to say,. if he’s had false teeth, he would have dropped them right out of his mouth … his eyes really flew open wide. To those who think there’s no future in on-line advertising in general, and AdSense in particular … guess again, the wave is going to grow much larger than it is today … or so Dave opines.

      • Spencer says:

        Agreed. Why do you think all the large newspapers are going out of business? More and more spending is going online…the trend will definitely continue – mobile advertising is also growing exponentially.

  15. This post got me to thinking and a little research. Since I have some sites where I do both, Amazon and Adsense in the same articles, I checked some quick stats.

    I have a site where over the same period of time I had 6x as many Amazon clicks as Adsense clicks.

    However over this same time period I only made $15 on Amazon and $73 in Adsense.

    It appears that my Amazon clicks are taking away from Adsense clicks and certainly not paying as well.

    I can’t help but think that my adsense earnings would have been higher if the reader wasn’t distracted, so to speak, with my Amazon ads.

    • Spencer says:

      Test it and see! Amazon converts very low; whereas all you need with Adsense is a click. It sounds like you should try maximizing your adsense earnings with the site. Try better placement (if possible) and perhaps using less amazon “distractions”.

  16. mike says:

    One of the big issues with Amazon is seperate sites/entities unlike Google where you can easily add their code and leave the GEO stuff to them, with Amazon you need to manually add your own solution/scripts to do this, without the GEO options a lot of sales are probably being missed.

  17. Jen says:

    Hi Spencer,
    Always enjoy your posts, and I have been finally seeing my income grow, but I am doing far better with Amazon than Adsense. I would love to see a reversal of this, but one thing that concerns me is the personal targeted marketing. I know in one niche I am in, there are lots of ads.

    So, those ads follow me to every page I am on. Not sure if you have done a post regarding that, but I have wondered if it is having an effect on income for adsense earners., although I see you are having no problems…

    Take care, and thanks for all the great info!

    • Elena says:

      Jen, do you have any tips on Amazon? I never kept their links long enough because it always seemed that nothing will happen. Perhaps I am wrong. What type of content you should have?

  18. tim says:

    Hi, i read all your comments and the post. This helped alot. As i am new to this so was confused what to go for. Can you please tell that can i go for Amazon and Adsense both on the same website or page? Does it blocks both of my account?
    Once again great info..!

  19. Elena says:

    No you didn’t bore us, at least not me. In fact I found these two posts very insightful. I first stumbled upon Clickbank vs Adsense post, then after few weeks came back and was glad to find something similar. Great job, your blog is the only blog I read as I run many websites and always suffer information overload.

  20. Jessica says:

    Just wanted to leave a quick thank you for the post — extremely helpful for a newbie!

  21. Tony says:

    Wow $100 in one month from adsence seems like a lot.. I def need to tweak the locations of my ads more, although I do get a lot of views, my click rate seems to be fairly low. Anyhow glad I read this post and the comments, I was thinking about signing up for Amazon, my search led me here and questions answered.

  22. Mridul says:

    i am using adsence and amazon in same time but i have one problum when i start using amazone i loost click rate before i used to get 1 to 2$ in one click now i am getting only 1 cent i dont no what to do please help me

  23. Frank says:

    I had almost forgot about the tax issues. Glad I’m going back into the archives to refresh

  24. Maria says:

    Is it possible and legal to use both on the same website?

  25. peter saurus says:

    i’ve been searching for a while whether you can have google and amazon ads in the same page and this is the only site which explains it well. congratulations!!!

  26. Grant says:

    Hi Spencer:

    I love how original you do research: going straight to Google’s earning report!

    Great work, I’m your newest fan.

    Grant from San Francisco

  27. atmosfera says:

    I think it is good not only to have ads but also some links to get referrals that work for you then, such as cashcrate.com where people earn doing online survey and you have 20% of their earnings.

  28. Maria says:

    Adsense is impossible! They delete every views / traffic I get. And I dont even have clicks on ads yet, or maybe I did but they deleted them too? Where to contact them? When my traffic increases it just falls on adsense and in the end of every day I have had according to them 0 visitors / views.. Please tell me what is wrong with them? There is no invalid activity going on on my site as I have red it can be an issue with Adsense. But I haven’t even given my website to friends! So what could the problem be?

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