Ever since I started to publicly share how I build niche websites and monetize them primarily through Google Adsense, I have received lots of questions. In fact, many of those questions come from people that want to know if its really possible to earn good money through Google Adsense. Many of them have read that Clickbank.com is a much better place to earn commissions and have also read that Google Adsense pays poorly and that its extremely difficult to make any real money there. So, in my post today I want to tackle some of these questions and determine where the “Real” money is – Clickbank or Google Adsense?
(As a side note – the voting for my niche pursuit is still open! If you haven't had a chance to cast your vote – go here)
Before I dive into some of the numbers, I want to CLEARLY state that no matter the outcome here – either method could be the best option for YOU! Depending on your site, the topics or keywords chosen, and many other factors either one of these monetization methods could be appropriate for you. There is no one size fits all answer here – it all depends. However, I thought it might be eye opening to some of you to share how much money is really being made with both of these ad networks.
The Clickbank Money
First lets take a look at Clickbank.com. This is highly touted in the Internet Marketing community. For this reason, you are probably familiar with it and hear good things about it. Personally, I don't have a lot of good things to say about it. There is a lot of junk sold there and a high percentage of the products are over-hyped. Despite the low quality products sold there, there IS a lot of good products sold there and you can still make money selling these quality products. In fact, I may be selling a product soon through Clickbank – so I don't want to give the impression that everything is bad there. You just have to be careful.
Anyway, Clickbank is a private company so we don't know exactly how much money is coming through their network. In fact, outside of the close knit community that we have hear in the internet marketing arena, very few (if any) people have even heard of Clickbank. They are not a very big company overall (I will demonstrate this in a minute). In fact, they don't even have their own Wikipedia page. (My own high school has a Wikipedia page – just kinda shows you how small Clickbank is).
However, despite being private – Clickbank is kind enough to share on their homepage how much money that have paid out. As you can see from the screenshot above – they have paid out $1,815,307,083 at the time of this post. No doubt this is a lot of money – almost $2 Billion. However, you have to also realize that this is the amount they have EVER paid out. Clickbank was founded in 1998 according to their company overview page. So on an annual basis – they are paying out $151,275,590 (Divided total by 12 years).
Its unclear if this $151 million per year “paid out” is how much product creators get through clickbank in total – or the actual commissions paid to affiliates. I would assume its the total paid for the products on clickbank – so the actual amount paid out in commissions would probably be 50% of this. However, we will use the $151 million per year to compare to Google. So in summary, the size of the Clickbank pie is $151 million per year. Sounds pretty decent right?
The Google Adsense Money
Now we turn to Google which IS a public company and so we know EXACTLY how much they pay out in Google Adsense every year. This information is publicly available on their quarterly and annual financial statements. So, I did a little digging and pulled up their most recent 2011 Quarter 1 Income Statement – right here.
If you look at the costs of Google, you will see a section called “Traffic Acquisition Cost”. This is how much Google is spending on Google Adsense. In other words, this is how much all of the website owners with Google Adsense are making in income from Google Adsense. Make sense?
You also have to realize that these numbers are in “millions” as noted at the top of Google's income statement. In other words, for the year 2010 Google paid out to Adsense publishers at total of $7,317,000,000. That's over $7 BILLION! In Q1 of 2011, Google paid out over $2 billion – so if you multiply that by 4 (to get a projected full year) – you can see that its safe to say that Google will be paying out over $8 BILLION in Google Adsense. (To be fair – $337 million of this first quarter number was not Adsense – but payments to other Google partners – see explanation here).
So, Where's the Real Money?
I think its obvious that the real money is with Google. They pay out over $8 BILLION a year and Clickbank has only paid out less than $2 billion EVER (in over 12 years)! Comparing Clickbank's annual payout of $151 million to Google's Adsense payout of $8 billion is not even close. Clickbank only pays out about 2% of what Google pays out each year – according to these numbers. So, the Google Adsense “pie” is so much bigger than Clickbank that its almost laughable.
This is why I have never understood why people are surprised when I tell them I make good money with Adsense. The pie is bigger, there is more money to be made, and its an easier sell! (I get paid for clicks not actual sells). Anyway, I could go on and on here. Google Adsense has a wider array of keywords that can be targeted than Clickbank by far as well.
Despite all of this, I will still make it CLEAR that sometimes Clickbank will be a better option for your websites. It all depends on the topics you cover, what you are selling, and your overall strategy. It all comes down to testing and trying things out.
However, if you are ever wondering where the REAL money is in internet marketing – its pretty clear that there is WAY more money being spent and made with Google Adsense – its not even close.
Anyway, feel free to leave your thoughts below – hopefully I didn't bore too many of you will all the financial numbers!