Understanding Referral Units

Recommending products and services to others on the Web has been a
concept for as long as the Web’s been around. Probably one the best known
referral programs (okay, referring to something in this context is the same as
recommending it) is the one that Amazon.com offers for the books and other
products that are available to buyers around the world. Everyone has seen
the little Amazon boxes on Web sites that allow you to click through to buy
the featured product.
Google AdSense offers the same type of service. The difference is that
AdSense offers the ability to refer other programs or Web sites, rather than
just offer the products that you like. For example, I use the Firefox Web
browser, which is a personal preference, but I love it and think everyone who
tries it will love it too. I include an AdSense referral button for Firefox where
space allows on my Web sites. Then, each time a user clicks through that
referral button and downloads Firefox, I get a small payment added to my
AdSense revenues.
Referrals are a neat feature that can seriously help to bump your AdSense
earnings if the referral ads are targeted well to your Web site audience. The
key is in the targeting though, as you see when you get a little deeper into this
chapter. There are two kinds of referral products — Google products and non-
Google products — so you’re not as limited in what you can refer your users
to as you might be with other referral programs.
But why referrals? (Did you know I can hear you asking these questions?
Well, okay, not really. But I do imagine you asking them.) The answer is
simple really. Some of the best advertising that any company can ever get is
based on word-of-mouth referrals.
No advertising in the world sells a product better or faster than when someone
loves the product and shares that fact with others who then share it
with others. If you’ve seen the commercials on TV with the domino effect cell
phones, that’s a really good graphical representation of the concept of wordof-
mouth advertising, which is also dubbed buzz.
One person tells two who then tell four who then tell eight. This buzz grows
exponentially until it seems like everyone is talking about the product and
even rushing out to buy it.
That’s the same effect advertisers hope for when they place their products in
the AdSense referral program. They hope to take advantage of the buzz that’s
created when one person loves a product and recommends it to others who
also love it and recommend it to others. As the ad-placement person, that’s
good for you because advertisers are willing to pay to generate good buzz.

Earning with Referral Units

If you think things have been a little different with AdSense referrals up to
this point, you’ll really see the differences in the earnings department. Here’s
where everything that you’ve read about AdSense so far changes a little bit.
Earning with AdSense referral ads requires some action on the part of your
Web site visitors. Earning with referrals isn’t as simple as clicking through
a link, or even searching and then clicking through search results. AdSense
referrals have conversions — which are specific actions that must take place
before you get paid for displaying the referral ad.
Even after a conversion takes place, the payments are a little different than
what you see with other AdSense ads. All referral ads are paid on a flat fee.
However, the fee that you’re paid can be influenced by your location. Each
advertiser sets country-specific goals, so you’re paid up to the maximum
amount shown for each of the referrals that you make from your AdSense
referral ads.
To further complicate things, there’s a validation period when you first add
a referral to your Web site. This validation period is put in place to help
AdSense validate that conversions that take place through your referral ads
are genuine. During this period, you earn the minimum payment for conversions,
with the amount increasing after the validation period is over.
Here’s the frustrating part — the validation period has no time limit on how
long it lasts. On the AdSense Web site, Google states:
“For most publishers, the validation period should end quickly, but it
will vary by publisher due to differences in the time it takes to collect the
necessary account data.”
In other words, how long you’re paid the minimum instead of the maximum is
determined by how much traffic your site generates and how often your site
visitors take advantage of your referrals. That’s not exactly something that
you can change or influence in much of a big way.
When you’re looking at the available referral ads, the amount shown in the
upper-right corner of the referral information box may be a single dollar
amount or a dollar range. When you see a dollar range, you notice this principle
of minimum versus maximum the most.
For example, I looked at an ad that had an earning range of $1.73–$15.38. The
lower figure is the minimum, which is what you can expect to earn during
the validation period after you place the referral ad on your site. The higher
figure is the maximum, which you work up to earning as the validation period
continues (until it ends) for any future referrals made from the ad.
I find the whole process a little frustrating, but I do understand why AdSense
has the validation period in place. Without it, publishers could add referrals
to their sites, ask all their friends to click through, do whatever is necessary
for conversion, and rake in the dough. For a few days, the referral numbers
would be really nice for the advertiser and the publisher, but then referrals
would drop dramatically.
The validation period dampens this type of activity, making the actual number
of referrals more realistic — which isn’t such a bad thing. With realistic numbers,
you can know exactly what to expect from your referral earnings, and
advertisers can know exactly what to expect from their referral spending.

Customizing referral ads

The odd thing about creating referral ads, to me at least, is that all the
actions for creating the ads are on the same page. When you begin the customization
process for referral ads, you have the ads that you’re selecting
from displayed on the left, but after you select an ad or category of ads, the
customization abilities expand on the right.
When you first open the ad-creation pages, not much appears available for
customization — you only see information boxes on the right side of the page
for Referrals and Categories and Keywords. After you select the products,
keywords, or categories that you want to refer, you begin to see customization
capabilities on the right side of the page — Referrals, Categories and
Keywords, as well as Alternate Ads or Colors. Additionally, a new section
appears under the Advanced Options heading — AdSense Unit Name.
To see how this works, go ahead and select an ad — one of those ads you
tracked down with the techniques spelled out in the previous section.
Selecting an ad brings up the customization section of the AdSense Unit
Wizard, as shown in Figure 12-7.
First things first, choose an ad format. (Ad format selection is the top option
on the customization section of the page.) To view your options, click the
Ad Format drop-down menu — formats listed in black are available, whereas
formats listed in red are unavailable. Feel free to choose any of the available
options you feel suit the space you have available on your Web site.
After you get formatting out of the way, the menu on the right expands with
additional customization options. You see these sections: Referrals (which
list the referral ads you’ve selected), Categories and Keywords (which list the
categories and keywords you’ve selected), and Alternate Ads or Colors.
The Alternate Ads part of the Alternate Ads or Colors option is where you
choose what should show on your site instead of the referral ad in the event
that a particular advertiser reaches its budget limit and its ad can no longer
be shown. You have three options here to select from:
Automatically Choose Fallback Referral Ads: This option leaves any
fallback ads up to AdSense. If your chosen advertiser hits its budget
limit, AdSense substitutes another ad.
Show Non-Google Ads from Another URL: If you’re using more than
one advertising program, you can have Google show ads from that other
program if your chosen advertiser hits its budget limit. (How generous
of Google!)
Fill Space with a Solid Color: Rather than show any additional ads,
AdSense blanks out the ad space you have set aside with a solid color.
The only problem with this option is that as long as your ads are
blocked (because advertisers’ budgets are limited), you have no potential
to make money from this spot that you’ve set aside.
I select the first option for each of my ads. I have yet to see a time when alternate
ads needed to be shown, but I’m sure that it does happen. (I guess I’m
just not picking the most popular ads in the referral program!) If you have
another option or you don’t trust that AdSense will show ads of which you
approve, the other options are just as viable.
As for your colorizing options, remember that these are only available for
text block ads, not text links or graphical ads. To see your options, click the
Advanced Options to expand the Customization menu so it includes a Text
Block Color section and a Custom Channel section. The Text Block Color
option is the very first option that appears under this link.
The options in the Text Block Color section are limited to those included in
the drop-down menu in this block, as shown in Figure 12-8. Choose an option
from the drop-down menu, and a preview of that option appears immediately
below it.
When choosing colors, try to get as close to the color scheme used on your
Web site, but resign yourself to the fact that you just can’t match it perfectly.
Because you can’t, stick with colors that are complementary to your site.
Don’t do something dramatic just to draw attention to the box. If you do,
you end up with a referral box that looks completely out of place and isn’t
aesthetically pleasing, which (believe it or not) could cause your visitors to
avoid clicking the box even if they’re interested in the referral.
Aesthetics, or the appealing look of an ad, are important. If visitors see a small
portion of your site that looks out of place, they’re more likely to avoid it
because humans, by their nature, need harmony. If your referral box is out of
harmony with the rest of your site, it sends a subliminal message to visitors
to avoid it. Don’t let a referral stand out like a sore thumb. Instead, keep the
colors of your referrals similar or complementary to the rest of your site.
One of the last options that you have in the Advanced Options section — and
this has nothing to do with the appearance of the referral ad on your site —
is what channel you want the ad to be tracked with. I talk a lot about using
channels in Chapter 14, but for now, you need to know that channels help
you track ad performance on your pages or even on whole Web sites so that
you can keep track of which ads are generating the most revenue.
If you don’t know how to create a channel yet, don’t worry. You can always
create an ad without one and add the channel later — maybe after reading
Chapter 14. Or, you can click the Add a New Channel button, enter a name
for this channel in the text box that appears, and click OK. Then you have a
channel that you can use to track the referral ad.
The last option in the Advanced Options section allows you to give your ad a
specific name. By default, ads are named according to their size and the date
created, but if you have a bunch of different ads and referrals on your Web
site, keeping track of what’s what might be a little difficult if you leave the
default name in place.
Consider creating a more descriptive name that helps you remember what
the ad is and its purpose. When you see reports — once a week or once a
month, depending on your preference — you can quickly decipher which of
your ads is performing well and which should be removed or replaced. (Not
sure what kind of reports I’m talking about? Check out Chapter 15. You’ll be
glad you did.)
All you have to do is highlight the default text and type the name you want to
use. When the code for the site is generated, the indicator that tags that ad
with the name you’ve created is added automatically to the code.

Promoting Referral Ads

Referral ads seem to be different than other AdSense ads in more ways than
just how you create them. For example, it’s perfectly okay to promote your
referral ads — to a point. Although AdSense definitely doesn’t want you to do
anything to draw attention to your AdSense for Content ads, you have a bit
more freedom when it comes to highlighting other AdSense products:
AdSense for Search: Feel free to mention to your site visitors that you
have a search box they can use to find whatever.
Referrals: Refer away. It’s always best if you’ve actually used the products
you’re referring so that what you tell your visitors is accurate. Tell
them your thoughts about the products and share your stories of how
the product has performed for you.
You’re absolutely not allowed under any circumstances to draw attention to
the referral by telling readers to click it. Click Here graphics pointing to the
referral box and anything resembling a directive to click the button are not
allowed. Oh, you also can’t claim sponsorship — as in, This Web site sponsored
by that product.
Go ahead and write an article about the product that you’re sponsoring and
leave the referral text within the article as well as a referral graphic on the
right side of the page. You can even tell your visitors that you recommend
the product that you’re referring. Just don’t tell them to click the link or the
graphic, and don’t try to force a visitor to pay attention to the referral ad. Let
referrals naturally occur, based on your good experiences with the products
that you’re referring.

Adding the code to your Web site

After you select your ads and customize them to your tastes, all that’s left
is to generate the code and then paste that code onto your Web site. To
do that, click the Submit and Get Code button at the bottom-right of the
Referrals page.
The site processes for a few moments and then you’re taken to a page similar
to the one shown in Figure 12-9.
Copy the code and paste it into the HTML of your Web site, making sure you
place it between the body> and /body> tags of the site. (Okay, I know
there could be a lot of real estate between the body> and /body> tags on
a site. Exactly where between those tags you place your code is determined
by your profound study of AdSense ad placement principles, as outlined by
yours truly in Chapter 5.)
Every HTML editor is a little different, and the code for every Web site is different,
so I can’t tell you exactly where in the text between the body> and
/body> tags to put the code, but you can play with the placement until you
get it just right.
When you’re done, upload your Web site and you should immediately begin
to see your referral ad. Well, okay, you might temporarily get public service
announcements, but in most cases, the referral ad shows right away.
However, if it doesn’t appear on your site within 48 hours, you may have
done something wrong in the process and you’ll need to try again.

Tracking conversions

If you place referral ads on your page, you’ll want to also track how they’re
performing. AdSense gives you some tools to do that. After you set up your
AdSense referrals, a new report becomes available in the Reports section
of your AdSense account. Right there on the front page is the new Referrals
report. If you click this report, you’re shown some stats based on the performance
of your referral ads.
For each referral ad you display, you see the following stats:
Clicks: This number indicates every time that a site visitor has clicked
your referral ad even when a conversion doesn’t follow.
Sign-ups: When a referral product — like AdSense — requires a sign-up,
and your site visitors actually do sign up, that number is displayed in
this column.
Conversions: When your visitors click through your referral ads and
complete the required conversion, this is where that fact gets recorded.
Conversions are listed by product.
Earnings: Here’s the line that interests you the most, I’m sure. This line tells
you exactly how much you’ve earned from your referral ads, by product.

The earnings breakdown

The earnings you can expect to make for referrals will vary depending on the
product you’re referring. They may also depend on the location of the user
you’ve referred the product to. Some referrals pay more when users are U.S.
residents, whereas others pay more when users are located in other countries.
The difference is determined by where the company you’re referring is
located and the target market the company is trying to reach.
Earnings are determined by the product owner or company that offers its
products for referral. For non-Google products, individual advertisers decide
the actions they want visitors to complete and how much they’re willing to
pay for those actions as a result of clicking through the referral ad. You’re
credited for non-Google referrals if a user clicks through your referral ad and
completes the advertiser’s conversion criteria within 30 days of clicking.
For Google products, the earnings schedule is a little different. Well, okay,
it’s not really different, it’s just lain right out there so you can see it without
having to wonder or search for what earnings you can expect to make. Your
earnings for Google referral products are defined as follows:
AdSense: When a user who signed up for Google AdSense through your
referral first earns $100 within 180 days of sign-up and is eligible for
payout, you’re credited with $100. Note that it’s only when the user
first signs up and earns $100. If a visitor has been a member of AdSense
in the past, you don’t receive this payment. Also, this applies only to
referrals located in North America, Latin America, or Japan. All others
are counted as invalid referrals because AdSense doesn’t support other
countries at this time.
Firefox plus Google Toolbar: When a visitor you’ve referred to Firefox
with Google Toolbar runs Firefox for the first time, you’ll receive up to
$1 in your account, depending on the visitor’s location. Your referral
must be a Windows user who hasn’t previously installed Firefox in order
for you to receive credit.
AdWords: When an advertiser you refer first spends $5 on AdWords
ads within 90 days of sign-up, you earn $5. This is in addition to the first
$5 that AdWords gives new users. So, technically speaking, users have
to spend the $5 that AdWords gives them and $5 of their own money
before you’re paid. If that same advertiser spends $100 within 90 days of
sign-up, you’re credited with an additional $40.

Invalid conversions

One more aspect of conversions that you should pay attention to is the possibility
of conversions being considered invalid. An invalid conversion is any
conversion that AdSense deems isn’t the result of genuine interest on the
part of the Web site visitor who clicked the referral ad. Most usually, invalid
conversions are caused by Web site owners clicking their own ads, but they
can also be the result of automated clickbots, clicking contests — where you
offer a prize to the person who clicks an ad the most often or who clicks the
most ads — or other forms of click fraud.
Because I already know that you’re not using those methods to generate
AdSense revenues, consider this a refresher. Don’t participate in any such
fraudulent activities. They’re not good for the ad programs and can have
nasty results for you. Place your ads on your pages and allow visitors to
naturally click through them. Don’t try to inflate your numbers by requesting
clicks or convincing your friends to click through your ads.
Just let click-throughs happen. If you follow the principles I lay out in this
book and work diligently to create a Web site that has true visitor value,
earnings will happen. Then you can truly enjoy the revenue stream that
you’ve generated without worrying about when AdSense will catch on to your
less-than-honest methods.

Understanding conversions

Until now, I kept the whole concept of referral conversions a bit vague. Let
me see if I can now give you a clearer picture. A conversion is an action or a
set of actions that have to happen before you get paid for a referral ad. It’s
not enough for you to place the ad on your Web page and have your visitors
click the ad. Something else — a download, a registration, or something
similar — has to happen before you get paid.
Here’s the part that might make you think twice before including referrals on
your site — some of those conversions take time. A conversion requirement
that visitors sign up for a membership on a Web site and remain a member
for a certain amount of time — usually 30 to 60 days — isn’t unheard of.
Some conversions are simple — sign up for a newsletter, request information,
and become a forum member. Others require a monetary investment from
the visitor who followed the referral link — buy a product, purchase a membership,
and donate a sum of money. The conversion details vary by product.
For example, the conversion details for a referral ad to Google AdSense are
these:
“When a publisher that signed up for Google AdSense through your referral
earns their initial $100.00 within 180 days of sign-up and is eligible for
payout, we’ll credit your account with $100.00.
A Google AdSense referral is counted only for publishers never previously
enrolled in Google AdSense. Google AdSense referral payouts do not count
towards $100.00 threshold.”
Pretty complicated, huh? They’re not all that complicated, though. For example,
here are the conversion requirements for the Ghirardelli referral ad:
Purchase/Sale — $3.00–$11.54
Purchase Online
Really. That’s all there is to it. A visitor clicks through your referral ad, makes
a purchase from the Ghirardelli Web site (It’s chocolate, folks! Who doesn’t
love chocolate?), and you’re paid the referral fees. Of course, exactly how
much you’ll be paid is still a little murky because nothing explains exactly the
percentage of sale that’s credited to the publisher, but it’s still simple enough
to understand. Visitors buy chocolate, you get paid, everyone’s happy!
The only way to know for sure what the conversion requirements are for
a referral ad you may have selected is to look. When you’re examining ads
(remember, I talk about this earlier in the chapter), you see a blue Conversion
Details link. Click this link, and a small box appears that details what the conversion
requirements for that specific ad are,