Google Adsense has been the main revenue model for many Bloggers and Internet Marketers. The best thing about Adsense is that they don’t have any specific traffic requirement and accepts almost all the blogs/websites that abide by their TOS. However, most of the Bloggers are not aware of you not starting earning money if you’ve got an Adsense account. You need traffic which too targeted high-quality traffic.
How does AdSense Revenue work?
AdSense has both CPC and CPM-based revenue model. Now I will explain the terminology that we use on AdSense first;
- CPC–Cost Per Click–Varies anywhere in a range between $0.02 to $1 (Max. it can go up to $100 as well but in very rare cases.)
- CPM–Cost per 1000 Impressions.
- RPM–Revenue per 1000 Impressions.
- CTR–Click Through Rate–Clicks per 100 impressions. Varies anywhere in a range between 1% to 10% based on your niche and ad placement.
- 5. The other terms like Pageviews, Impressions, and Earnings; which I guess are pretty much straightforward.
CTR = (Number of ad clicks * 100) / Number of page views
If some blog has 10,000 pageviews per month and 800 AdSense ad clicks, then your CTR is 0.8%.
CTR = (800 * 100) / 10,000 = 0.8%
Most of the ads from Google AdSense are Cost Per Click based. That means you get paid whenever a visitor clicks on your ads (they do not allow you to click on your own Ads, it might lead to a permanent BAN). There are only a few ads that are CPM based which suggests you get paid even though a visitor doesn’t click and just view the ad, but these ad formats are very less, and most of the advertisers avoid these ad formats.
How much money can you make from AdSense?
Well, it depends on a lot of factors and out of all these the main factors are Cost Per Click (CPC) and Click Through Rate (CTR). Cost Per Click (CPC) varies from niche to niche and also depends on the geographic location of your visitors. If you are getting traffic from Tier-1 countries like the US, UK, Canada, Australia, etc, then your CPC will probably be high. But if you are receiving traffic from Tier 2 and Tier 3 countries, CPC would be lower.
CPC also depends on the keywords that you are targeting. If you are targeting keywords related to Gadgets, Health, etc., the CPC tends to be high because there is a lot of competition among advertisements in those sectors. So, if you are in a less competitive niche like entertainment or education, that too in India then obviously your CPC is going to be very less.
So, let’s suppose you have high CPC, and that doesn’t end there. You need also a high CTR as well; that means you need more people to click on your ads. This depends on many factors like Ad Placement, Source of Traffic, Web Page Loading time and a lot many other factors.
It all depends on these two factors. Combing these two a simple term is used to understand how well our ads are performing and its called RPM.
Page RPM = (Estimated earnings / Number of page views) * 1000
Estimated Earnings = CPC * Total Number of Clicks
= CPC * CTR*100
Ops, don’t panic. I am not teaching you any formula, and you don’t need any. You just have to look at the RPM.
Let’s suppose like your RPM is $2 then you must be making around $2/1000 pageviews.
In that case, if you are receiving about 10,000 page views you should be able to make about $20.
So, if your RPM is $5, then you would make about $50 for every 10,000 page views.
If in case your blog is receiving an average of 10,000 pageviews per day which suggests 300,000 pageviews per month at an RPM of $3, the calculation goes as follows;
Total Revenue = RPM * Pageviews/1000 = 5*300 = 1500.
You should be able to make about $1500 per month. So, now I hope you understand how to calculate the earnings.