The Curious Case of an Ad VS Ad-Free Site
Gone are those days when Google Ad-sense revenue was the primary source of revenue for most of the B2b Portals. This story is about a B2B portal which connects Buyers and Suppliers of scrap & recyclables. Started in 2002 the portal has a subscription based revenue model with a considerable amount of Ad-revenue from Google Ad-sense, Banner Ads. From 2004–2012 the Ad revenue was in the higher range of XXXX $/month contributing to 70% of revenue. 90% of the Ad revenue was from Google Ad-sense.
Even-though the traffic to the portal was increasing, the Ad revenue started decreasing steadily until it reached less than 10% of the revenue in the late 2000’s. With the revenue belly up we worked hard on the subscription model by adding value added services, advanced features coupled with excellent support services. Our subscription revenues grew exponentially, but we still kept those Ad’s running. Recently we had a discussion with a consultant who suggested us to remove all the ads as it was annoying and hurt the user experience.
We had a medium square banner on the top right, a long banner on the left bar, a leader board in the footer and also had suggested content ads. We removed all these ads, making the portal totally ad-free. So with a clean site, we expected the conversion rates to go up but the exactly opposite happened. The conversion rates came down 58% from .09 to .04. The transactions fell 60% from 10 to 4. The bounce rate increased by 3.54%(Would you believe that?). The revenue took a hit by 42.19% from $794 to $459.
What do we learn from this case?
The common perception that an ad-free site performs better than a site with ads have been smashed by our Google Analytics data. Although the data is a bit early to come to a solid conclusion (Seven days before and after the changes) it clearly indicates that relevant ads play a huge role in the psychology of clients.
Jun 3, 2018 to Jun 10, 2018 Compared to May 26, 2018 to Jun , 2018
Impact on Revenue
Transactions : 4 vs 10 [ — 60%]
Revenue : 490 vs 794 [ — 42.9%]
Ecommerce Conversion Rate : 0.04 vs 0.09% [ — 58.09%]
Impact on Traffic
Another notable phenomenon is that the traffic from developed nations such as US & UK have increased significantly.
Increase in New Visitors from Developed Countries after Removing Ads ( 7 days data)
US : +114 [+9.86%]
UK : +14 [+43%]
Germany : +28 [+26.98%]
Decrease in New Visitors from Developing Countries
India : 1804 vs 2251 [ — 19.86%]
South Africa : 157 vs 189 [ — 16.93%]
Vietnam : 46 vs 53 [ — 13.21%]
One can safely conclude that Google prioritize user experience based on the visitors from different countries and thus showing pages with Ads & without Ads on their SERP’S. In the ecommerce perspective, ads play a significant role in developing countries in determining the conversion rate. With the revenues taking a hit, we have displayed the Ad’s again and if you wish to know the outcome please request for an update.