How much money we will get from Google if we sign up (and are accepted for) the AdSense program ? Paying detailed attention to those areas that are controllable – because many aren’t.

Revenue is generated for us when someone clicks on an AdSense ad on our site. Google charges the advertiser for the click thru and shares this revenue with us. The amount we earn from an ad is given by the following equation:

Income PER AD =

Click thru price X Fractional pay out X Click thru rate X Page traffic X Appearance frequency

The CLICK THRU PRICE is the price the advertiser is bidding to place an ad under the AdWords program and is determined by a complex real time automatic auction process: Google advertisers set a maximum price they are prepared to bid for keywords and they usually pay less than this.

The FRACTIONAL PAYOUT RATE is the percentage of its revenues that Google pays out to AdSense partners. THIS FIGURE IS NOT DISCLOSED BY Google. However, anecdotal evidence suggest the payout rate is good and competitive systems such as 7search.com payout around the 50% mark.

CLICK THRU RATE is the number of times the ad is clicked on divided by the number of times it is displayed (“impressions”).

PAGE TRAFFIC is the number of times people visit our web page.

APPEARANCE FREQUENCY is the number of times a particular ad appears on our page (remember that ads are rotated by Google automatically and successful ads are shown more often.)

Please note carefully: this is income PER advertisement, so to calculate our total AdSense income we need to evaluate this equation for each ad on all our web pages and add up the results. By the way, Google saves us the bother and tells us the answer.

But already the complexity of the process is apparent and of these factors, some are completely out of our control:

Fractional payout rate and Appearance frequency being two. So let’s look at those three factors that are at least partially within our control.

Click thru price

The Click thru price, whilst fundamentally determined by the advertiser, CAN be influenced by the content of our website: if we can modify our site so that it includes more content related to higher value keywords, we are more likely to get higher value click thru prices. For example, if we run a site about Bird Watching we may get ads posted about Bird Watching books. But why not extend the site to include content about the best binoculars for bird watchers? Dedicate a page to this topic and we could find higher value ads running on that page because binoculars sell for more than books and businesses advertising binoculars may be willing to pay more for keywords relating to them.

We could also run some pages about travel and hotels in exotic locations where rich bird watchers like to take their holidays. It’s all content relevant to our site but it is likely to increase our AdSense revenues too.

The ads we get on different pages of our site will vary according to the content of the page. AdSense is that clever! If we’ve already got a site, we can get a tool from Google called the AdSense preview tool. This lets us see what sort of ads we’ll get even if we haven’t signed up for AdSense yet.

If we get ads that don’t seem relevant there are 2 possible causes:

1) Google doesn’t know what our page is about, or

2) Google has never heard of our site.

Estimating click thru values

Find out how much keywords are being bid for on Overture, a competitor to AdWords. This will give us an INDICATION of the prices people are bidding on Google which in turn will give us some idea about the click thru value of AdSense ads relating to those keywords. The rule is: aim high.

Alternatively if we already have an AdWords account we can use the Keyword tool to find out the exact price of any keyword – but remember AdSense is about content, not keywords so, again, this is only going to be an indicator.

Click thru rate

Can we influence this? YES. We can. Here’s how. We use our page to sell the products and services that are likely to be shown in the ads. To follow our binocular example, if we post content about the benefits of excellent (and expensive) binoculars and how they enhance the bird watching experience, readers are going to be more interested in buying binoculars than if we simply post content about the different types of binoculars available and they will consequently be more likely to click an ad. We have to write sales copy that focuses on the generic benefits of the products and services likely to be advertised on our pages.

Page traffic

This is what web marketers fight hardest over. No traffic means no clicks means no income. So we have to maximise the number of people visiting our site. There are a raft of techniques available and that’s tomorrows topic.
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