From Giant Panda
Adsense for Domains (AFD) Opt-Out
The advertiser opt-out that began back in February has finally begun to show a negative impact on revenue.
G's phased plan for opting advertisers out of parked domain traffic had, until now, shown negligible effects on revenue. Around the end of August, they began opting out large advertisers who were actively buying parked domain traffic. Since then, both traffic and search volume (first page clicks) have remained stable, while ad clicks have fallen precipitously, indicating the ad inventory has narrowed considerably. A quick look at the ads you're seeing on many of your keywords show that much of the remaining advertisers are run-of-network type advertisers who'll buy every click as long as they don't pay much for it.
What Happens Now?
The opt-out is on track to be completed by the end of Q3 (this month). The most valuable advertisers were evidently scheduled for the final phases, so we may or may not continue to see decline through the end of the month. The overall opt-back-in rate has been very low so far, but, until now, very few of the opted out advertisers were even buying parked domain traffic, so we still don't know how many advertisers will choose to rejoin the channel.
Our internal monitors have detected at least one category of advertisers (casual gaming) who appear to have opted back in. RPMs for those domains have recovered and even exceeded pre opt-out levels. I look forward to seeing that more often in the coming weeks.
We are in weekly discussions with G concerning the future of AFD. I have relayed the thoughtful concerns many of you have expressed to me about the viability of organic traffic being monetized via Related Search on Content (RSOC), and I'm mostly in agreement: the format of AFD is better suited to the visitor dynamics of type-in and expired domain traffic than RSOC's content-based format. They have heard our concerns, are taking them seriously, and still insist there are no plans to end the AFD channel. Q4 will give us much greater insight into what the organic domain traffic business will look like moving forward.