The Economics Of Google Adsense…
The current financial market situation is putting people out of their homes and jobs at an alarming rate. America plunging head first into a recession has obvious ramifications not just for its own economical situation but also for most other countries around the world that trade with it.
When the gold standard, a measurment of a country’s currency, was abandoned around 1931-33 money has been printed on the promise of redemption by the government producing it. The value of the currency then depends heavily on the financial market conditions between countries.
As America has lead the rest of the world up the garden path like bleeting sheep, following their shepard, most currencies and economies are harshly affected by how the master is run. The value of the dollar has plummeted dramatically over the last 6-12 months. This means that countries selling lots to America have to up their prices in order to keep their profit margins. These price increases then feed into America and the customers have to pay more for their goods. Alas inflation goes up.
I could talk about China and how they aim to prevent this by artificially forcing their currency to be a specific price to in effect export their inflation to other countries – but that is beyond the scope of the post.
Adsense
So what does all this mean? For American’s using Google Adsense as a revenue stream – not an awful lot. A dollar is a dollar. To members of other countries with different currencies – this is not so much of a good thing. The value of Google Ads decreases dramatically when the dollar is low against the reflective currency.
I am in the UK and therefore pay for things in Pounds Sterling(GBP). The current conversion rate of dollars to GBP is :
   1 Dollar   =  0.495420 pounds
So if I make Adsenses $100 dollar a month payout threshold I will effective only get £49.5356. So – less than half.
So my point is – at what point do non-american web publishers decide that using any service that pays in USD’s is no longer good business?
Do Americans think that they would be able to play the currency game by going with EURO (€) paying european advertisers as the conversion back to dollars reflects a higher return?
Sure – I can hoard my adsense checks in the hope that the dollar picks up sometime soon, but who can really afford to do this?
