Advertising

Webmasters often post questions online about the revenue potential of Google AdSense, and the answers vary all over the place.

It is against the terms of conditions for Google AdSense for any site publisher to disclose its click-through rates or other statistics about a site’s performance.

But enough information has been posted on the Internet to make some general observations about what to expect with CPMs (cost per thousand impressions), which are the result of the ad click-through rate and the revenue per click. In brief, it is possible to exceed $10 per thousand page views for a site that relies entirely on AdSense, but the final number depends on a number of factors. The $10 number is simply a benchmark; in reality, some sites can do much better while others never even come close. More on that below.

The first consideration is the business category of the Web site. It is well-known that certain categories attract strong advertiser interest, including travel, health, financial, real estate, employment, automotive and technology. Other categories do not perform as well, such as news, weather and sports. So anyone thinking about implementing AdSense or another contextual advertiser should consider the category first.

Think about Subcategories

It follows that certain subcategories deliver a higher CPM than the overall category. A site that focuses on job listings might find that the health care subcategory outperforms the human resources subcategory. In that case, the webmaster might try implementing contextual advertising in just a subcategory rather than throughout the entire site.

In fact, anyone new to contextual advertising might want to experiment with it in just one channel of the site that has the greatest revenue potential. Sophisticated contextual advertising sites learn how to track performance by channel to determine if the ads deliver a higher CPM an alternative revenue source.

In my experience with managing large media Web sites, I have found that launching a big AdSense campaign throughout an entire site or group of sites will often produce disappointing results. Start small, learn and experiment, then expand.

Optimization

AdSense optimization is a form of search engine optimization. It means that a site owner or manager should optimize the pages for AdSense in a similar way to how they are optimized for search engines.

I have learned the hard way that a page that doesn't clearly identify a category or subcategory is not likely to receive good ads. In other words, make sure the page title, headline, body copy, alt image tag and other standard SEO techniques reflect the kind of ads you want to see on your page.

A page with a title of "Antiques for Sale" or "Current Job Listings" will receive ads that are general in nature. Those ads will get a lower click rate and lower revenue per click.

That same page with a title of "Antique Silver Flatware of Sale" or "Charlotte NC Health Care Jobs" will receive much more targeted ads.

It's all about relevancy and precision.

AdSense Tactics

Finally, the implementation tactics of the ad code have an impact as well. They include:

• Put the ads near the top of the page;
• Place them on the left side or center of the page rather than the right;
• Make the display similar to the surrounding content but just different enough that they don’t appear to trick the visitor into thinking they are actual content;
• On a related note, use colors that complement the site rather than mimic it exactly;
• Optimizing the surrounding content to attract the most relevant ads;
• Moderate the number of ads per page; too many will reduce the click rate;
• Use larger rather than smaller ad sizes.

It is these tactics that also contribute to a higher click through rate, which results in Google delivering better quality ads.

AdSense Clicks

Again, the results come down to click-through rates and revenue per click. And again, no site is allowed to share that information.

But other sites and webmasters who have posted such information claim that any AdSense click through rate for a page of less than 1 percent is underperforming, while anything over 5 percent is outstanding. A number of posts speculate that around 2-3 percent is average. It is this number that is most impacted by the implementation tactics. Based on my experience, those are good benchmarks to follow.

The average revenue per click is more impacted by the categories (along with the economy and time of year) and varies greatly from one to the other, but various posts throughout the Internet suggest the average is well under $1 and probably lower than 50 cents. Certain highly targeted and effective sites might see a revenue per click above that number, while poor performers may be luck to average 10 cents a click.

AdSense CPMs

These numbers lead to an average AdSense ad unit CPM or the more widely used eCPM, which measures the AdSense performance for an entire page based on the number of ad units on that page.

More ad units on a page increase the eCPM. A site that depends heavily on AdSense might consider a $10 eCPM as a benchmark for achieving above-average performance. Keep in mind that a $10 eCPM with two ad units per page equals a unit CPM of $5, while a $10 eCPM with three units per page equals a unit CPM of $3.33.

A $10 eCPM with two ads on every page and a 4 percent page click-through rate receives 40 clicks for every thousand pages. The average revenue per click would be 25 cents ($0.25 x 40 = $10). The ad unit click rate would be 2 percent and the CPM would be $5.

A $10 eCPM with three ads on every page and a 4 percent page click rate still receives 40 clicks fo every thousand pages. The revenue per click is still 25 cents. But the average ad unit click rate would be 1.33 percent and the CPM would be $3.33.

Sites that launch AdSense and walk away from it thinking they will get a big monthly check will end up being disappointed. Sites that launch it, analyze the results and focus on increasing the numbers will usually end up being glad they did.

For more tips about AdSense, see our guide to AdSense revenue.

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