Google Adsense

Today we are going to talk about whether or not you should look at incorporating Google AdSense into your site. The short answer is, unless you have really high traffic (10′s of thousands of visitors per month), then probably not. Well get into the specifics of why in a bit, but first a little run through on how Google AdSense works.

Google AdSense couple’s with Google’s AdWords. With Google AdWords, companies can pay to have adverts displayed for them for certain keywords. The company pays Google each time the ad is clicked, or each time a 1000 people view the add. Google takes a percentage of this, and the website displaying the ad gets a percentage. AdSense is the opposite end of this. You can add a small piece of code to your site that allows Google to display these ads.

So how does AdSense work?

When advertisers sign up for AdWords, they pick specific key words that they would like their adverts to be associated with. When you set up AdSense on your site, Google will crawl your site looking for content that matches the keyword that the advertiser is advertising on. The more content you have that matches keywords, the better your chances of having relevant adverts. You get paid every time someone viewing your site clicks on one of these ads. You also get paid for every 1000 people that view the add.

So from this we can gather that for AdSense to work for you, you need two things. Lots of good content to generate good adverts, and lots of visitors to your site, to increase the chances of clicks on adverts.

Now lets define some commonly used terms:

  • Click Through Rate (CTR) – This is a percentage of the average number of people that view the ad that will actually click it.
  • Revenue per 1000 impressions (RPM)- This is the revenue associated with every 1000 views of an advert.
  • Cost Per Click (CPC/PPC) – This is the price that the advertiser will pay for each click on the advert.

Looking at some of the numbers

The average click-through rate of 3% in the 1990s declined to 0.1%-0.3% by 2011 (Wikipedia)

This approximates to between one to three people in every 1000 who view an advert will click on it.

Now let’s say the advertising company is paying $2 per click for that keyword, which is reasonable but not guaranteed, and that Google will take half of that and give you the remaining dollar.

Okay, so….

You get 1000 visitors a month, that’s 3 clicks at 1 dollar.

That’s 3 dollars a month in ad revenue.

or $36 per year.

Not really worth it. CTR is hard to control as is the PPC/CPC but the traffic is in your control.

So how would you increase this?

Make good content, market your site, do SEO and increase your traffic.

But then what?

Make it 10 times higher and get $360 per year in ad revenue?

Still… probably wasting your time.

Ad revenue is for EN MASSE content publishers who either create legit content or spam content, OR ultra high volume sites.

The guys who released the iPhone 6.1 Jailbreak put ads all over their page.

They got 250,000 installs in 24 hours.

That would be $750 dollars in 24 hours by the math we just did.

Once you are making 100′s of dollars a day then this is worth it. Even $50 a day is worth it, but to get this you’re looking at needing a very high CLR, or having 10,000+ visitor’s per day, not month.

Alternatively, you could have 10 sites that all make a small amount of money, but then you have to run and maintain these sites, with good content and lots of visitors. Back in the day this was a very viable strategy, but Google is becoming more savvy to the ways of internet marketing.

Conclusion

In short, the best way to make money from AdWords is to have good content, and good SEO, that generates lots of visitors to your site.

Further Reading

Here are two good pages that give you allot of information about Google AdSense and how you can make it work for you.

How To Really Make Money With Google Adsense

Making Money from Your Website with Google AdSense


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