How Much Will I Earn From AdSense?
Before you get too excited, this is an impossible question to answer. It’s like asking how long should a piece of string be. There are too many variables to give a useful reply.
Nevertheless, the information in this article should at least give you a better understanding of how AdSense earnings are calculated — and how you can use this knowledge to increase your earnings.
AdSense Is a Numbers Game
The formula for calculating AdSense earnings is simple…
Earnings = Page View x Click-Through Rate (Page CTR) x Cost Per Click (CPC)
- Page Views in this formula only includes those pages with Google’s ads on them. If you have 1,000 visitors viewing 2 pages each on average, that gives you 2,000 page views. But if only half the pages contain ads, AdSense will report 1,000 impressions.
- Page CTR is the percentage of clicks divided by the Page Views. If 1,000 page views generate 10 clicks, your click-through rate is 1%.
- CPC is how much each click earns you, on average. If your CPC is $0.50, your total earnings will be $5.00 (10 clicks x $0.50).
Another term you will see used in your AdSense Performance Reports is RPM. This stands for Revenue per Mille, or Revenue per Thousand page views (“Mille” is the French word for “Thousand”).
It’s calculated like this: CTR x CPC x 1,000.
So, in the example above: 0.01 CTR x 0.50 CPC x 1,000 = $5.00 RPM (which is pretty good going!)
An even simpler formula is just:
Clicks x CPC = revenue
And that is as complicated as AdSense earnings get. Well, sort of…
In the Quick Reports section (in your AdSense account), you can add dimensions to the report, which will give you more finely grained statistics about your results. However, it’s easy to fall down this rabbit hole and spend hours studying your stats. Stick with the standard reporting unless you start earning hundreds of dollars a day.
Stick with the default report, where everything will now be familiar to you…
- Number of page views
- Number of clicks
- Page CTR (Click-Through Rate, expressed as a percentage)
- CPC (Cost Per Click)
- Page RPM (Revenue per Thousand impressions)
- Estimated earnings
The earnings are “estimated” because Google reports unaudited earnings. You won’t know until the following month what your actual earnings are. They tend to be very slightly lower, as a few invalid clicks are discounted.
You will be paid by Google towards the end of the next month (so you will receive June’s earnings in late July). But you need to pass the payment threshold of $100. If you don’t, the earnings are simply carried over until you do pass the threshold.
Increasing AdSense Earnings
This article is not the place for an in-depth look at maximizing AdSense income (you’ll find plenty of detailed advice on how to do that in other articles in this series).
But the “earnings equation” gives a useful insight into the broad areas to look at in order to maximize income. Here’s the equation again…
Earnings = Page Views x Click-Through Rate (CTR) x Cost Per Click (CPC)
Increasing any one of these elements will boost your income. And increasing all three, of course, will give you one of those “ker-ching” moments!
Let’s look at them one by one…
How To Increase Page Views
Largely, this has nothing to do with AdSense. It’s about increasing your overall site traffic (through content, a few quality links, social signals, etc.) and increasing the number of pages each visitor views (which boils down to creating great content).
But you can, of course, increase AdSense page views by adding AdSense to more pages. And you can increase the number of individual ad units viewed by (you’ve guessed it) adding more units to each page.
Before you go ahead and wallpaper your site with AdSense, though, bear in mind these caveats…
- Don’t make your pages ad-heavy, in relation to the amount of content. (Read Watch Your Ad to Content Ratio for more on this.)
- You can’t put AdSense on non-content pages (for example, “contact” and “thank you” pages).
- You don’t want AdSense on pages that monetize well in other ways (high-performing affiliate or e-product pages, for example).
- Some site owners have found that taking a “less is more” approach to AdSense increases overall revenue. So you may only want to have one ad unit per page, and not on every page.
How To Increase Click-Through Rates
The key here is to tread the thin line between…
- AdSense ads shouting at your visitors (which doesn’t work — they will either ignore the ads or, more likely, find a less aggressive site).
- AdSense ads hiding meekly in those parts of a page that most visitors don’t notice.
How do you get the balance right? It essentially boils down to design (the right size and color of ads) and placement (putting them in prime locations on the page without overpowering the content).
Another factor affecting click-through rates is “ad relevance” (i.e., achieving a close match between the subject of an ad and the subject of the article.)
Don’t fall into the trap of comparing your CTR with others. (It’s against the AdSense rules to reveal CTRs, but people still do it.) If your click-through rate is significantly lower than the percentage claimed by other folks, remember that…
- Typical CTRs are different in every niche (sometimes radically so). If you’ve done everything you can to optimize your ads, you have probably found the right level for your niche.
- CTR is only one part of the equation. If you have lots of visitors clicking ads but not following through with a sign-up or a purchase on the advertiser’s website, don’t expect to achieve a high cost per click.
How To Increase Cost Per Click
As with CTR, this is out of your hands to an extent. Some niches are more valuable in advertising terms than others, simple as that.
However, it’s certainly possible to influence the amount you receive per click.
One way is to target the best-paying keywords within your niche, both by writing new pages for them (if you haven’t done so already) and by working these “money keywords” into existing pages (in a “natural” way, of course).
Another way to influence CPC is simply to create a quality site. Visitors who love your content but still click on an ad are far more likely to purchase the advertised product (or perform whatever the “most wanted response” is) than a visitor who hates your content and clicks on an ad just to escape!
And guess what? The better the traffic you send to advertisers, the more advertisers will pay you per click.
One Last Piece of Advice…
Beware of drawing meaningful conclusions from small samples of data.
Let’s say you are currently receiving 1,000 page views per day with a very good RPM of $5.00. Do not expect to receive an even five dollars every single day.
Some days you might earn $10 (yippee!)
But on the days you receive zero clicks and zero cents (and they happen), don’t think the world has suddenly stopped spinning.
Day by day, your statistics will fluctuate wildly, especially if your overall traffic is still low. But week by week and month by month, they will be a lot more consistent.