Adsense: Factors that affect how much money you will get from Google

Not too long ago, we looked at AdWords and learnt how AdSense is
Google's AdWords syndication program that posts AdWords ads
on context-targeted websites:

Ads about binoculars appear on web pages with information
about binoculars on them.

It makes sense, doesn't it?

Today we are going to look at the factors that affect how much
money you will get from Google if you sign up (and are accepted
for) the AdSense program, paying detailed attention to those
areas that are controllable - because many aren't.
The AdSense revenue equation

Revenue is generated for you when someone clicks on an AdSense
ad on your site. Google charges the advertiser for the click
thru and shares this revenue with you.

The amount you 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 your web page.

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

To repeat: this is income PER advertisement, so to calculate
your total AdSense income you need to evaluate this equation
for each ad on all your web pages and add up the results.

By the way, Google saves you the bother and tells you the
answer.

But already the complexity of the process is apparent and of
these factors, some are completely out of your control:
Fractional payout rate and Appearance frequency being two.

So let's look at those three factors that are at least
partially within your control.
Click thru price

The Click thru price, whilst fundamentally determined by the
advertiser, CAN be influenced by the content of your website:
if you can modify your site so that it includes more content
related to higher value keywords, you are more likely to get
higher value click thru prices.

For example, if you run a site about Bird Watching you 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 you 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.

You 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 your site but it is likely to
increase your AdSense revenues too.
Estimating click thru values
Visit
http://uv.bidtool.overture.com/d/search/tools/bidtool/
to find out how much keywords are being bid for on Overture,
a competitor to AdWords. This will give you an INDICATION
of the prices people are bidding on Google which in turn will
give you some idea about the click thru value of AdSense
ads relating to those keywords.

The rule is: aim high.

Alternatively if you already have an AdWords account you
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 you influence this?

YES.

You can. Here's how.

You use your page to sell the products and services that
are likely to be shown in the ads. To follow our binocular
example, if you 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 you simply post
content about the different types of binoculars available
and they will consequently be more likely to click an ad.

You have to write sales copy that focuses on the generic
benefits of the products and services likely to be advertised
on your pages.
Page Traffic
This is what web marketers fight hardest over.

No traffic means no clicks means no income. So you have to
maximise the number of people visiting your site.

There are a raft of techniques available and that's
tomorrows topic.
-Alex
GoodSideoftheNet.com