If the dollar falls, do US-based publishers benefit? Yes, I believe so.
I found some information here:
“Our international revenues have grown as a percentage of our total revenues to 52% in the three months ended March 31, 2009 from 50% in the three months ended December 31, 2008 and from 51% in the three months ended March 31, 2008. This increase in the portion of our revenues derived from international markets results largely from increased acceptance of our advertising programs, increases in our direct sales resources and customer support operations and our continued progress in developing localized versions of our products in these international markets. The increase in the proportion of international revenues derived from international markets increases our exposure to fluctuations in foreign currency to U.S. dollar exchange rates. For example, in the first quarter of 2009, the strengthening of the U.S. dollar relative to foreign currencies (primarily the British pound and the Euro) had an unfavorable impact on our revenues. We have a foreign exchange risk management program that is designed to reduce our exposure to fluctuations in foreign currencies, however this program will not fully offset the effect of fluctuations on our revenues and earnings.”
So if the euro and pound fell against the dollar in that time period, that ad spend would be worth less by the time it clicked out of the system. As the euro climbs against the dollar, I believe US publishers benefit.
Also, if the dollar climbs in value, Google has less reason to push Adwords into new international markets. If the dollar falls in value, Google gains from pushing into new areas:
“The growth in international revenues as a percentage of consolidated revenues in the three months ended March 31, 2009 compared to the three months ended March 31, 2008 resulted largely from increased acceptance of our advertising programs, increases in our direct sales resources and customer support operations in international markets and our continued progress in developing localized versions of our products for these international markets. The growth in international revenues as a percentage of consolidated revenues in the three months ended March 31, 2009 compared to the three months ended December 31, 2008 resulted from seasonally stronger traffic in the United Kingdom and certain other countries.
The strengthening of the U.S. dollar relative to foreign currencies (primarily the British pound and the Euro) in the three months ended March 31, 2009 compared to the three months ended March 31, 2008 had an unfavorable impact on our international revenues (international revenues increased $231.4 million during this period). Had foreign exchange rates remained constant in these periods, our total revenues would have been approximately $429 million, or 7.8%, higher. This is before consideration of hedging gains recognized to revenue of $154.1 million and zero in the three months ended March 31, 2009 and March 31, 2008.
The strengthening of the U.S. dollar relative to foreign currencies (primarily the British pound and the Euro) in the three months ended March 31, 2009 compared to the three months ended December 31, 2008 had an unfavorable impact on our international revenues (international revenues increased $19.1 million during this period). Had foreign exchange rates remained constant in these periods, our total revenues in the three months ended March 31, 2009 would have been approximately $120 million, or 2.2%, higher. This is before consideration of hedging gains recognized to revenue of $154.1 million and $128.9 million in the three months ended March 31, 2009 and December 31, 2008.
Although we expect to continue to make investments in international markets, they may not result in an increase in our international revenues as a percentage of total revenues in 2009 or thereafter. See Note 13 of Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about geographic areas.”
I do hope Google makes those investments. So why am I not translating Ferodynamics into other languages? There are some problems with that. First, I’ve heard advertisers prefer English-only websites. In fact, this could be a TOS condition, I’m too lazy to look it up right now. If I start a new blog with a French translation of what I write here, do I run into problems with my ad account?
From what I’m reading, it sounds like French and German pay well, but Spanish does not. I don’t know about Italian. Chinese traffic is growing fast but I don’t think it’s worth much yet.
At some point it might be worth it to translate blogs to multiple languages, but on separate language-specific domains. I hope Google can address this. Ideally the ad unit says to itself, “I’m on a page with French content, modify my database counts to satisfy advertisers preferring exclusively-English content.”