Using Google AdSense Wisely

By , August 1, 2009

Google AdSense is almost never the best way to monetize a site; most web sites can earn more from other advertising options.

But I almost always recommend using AdSense as the first advertising solution for new web publications (sites).  The reasons are simple:

  • AdSense is a “known factor,” familiar for all parties (web visitors, web publishers, and advertisers);
  • It works at generating revenue (though at a very low level);
  • You can “set it and forget it,” focusing your efforts on creating content and attracting traffic; and
  • AdSense proves very credible and consistent reporting.

Of course, web publishers must use AdSense (and other advertising options) wisely. In most cases, this means only a single advertising “block,” visually separated from your site content — usually in the form of either a “leaderboard” (a 720×60 horizontal ad across the top of each web page) or a “skyscraper” (a 120×600 or 160×600 vertical ad displayed at the right edge of each web page.  In my view, it’s “unwise” to insert more than one AdSense block, and it’s also unwise to place AdSense ads “below the fold” (so that only users who scroll down the page will see the ad).

Many web publishers are alarmed when they first add an AdSense block to their web pages, because they first see only “public service” ads, and then they see many “bizarrely off-topic” ads (often for dating and people-finding services) for several days.  Be patient: if your web pages have reasonable “search engine optimization,” Google will quickly identify the subject and audience, and will soon start displaying relevant ads.  (Not “ideal” or “very-well-matched ads,” but merely “relevant.”)

Note that there are many strategies to improve the “focus” of advertising that appears on your web pages” and also to maximize AdSense revenue; but this isn’t an article about “optimizing your AdSense revenue.”

In my experience, AdSense revenue for a site will “correlate with” the advertising-revenue opportunity that may exist from other sources.  I’m not comfortable stating a specific “ratio,” but I’ve often found that once I start integrating other types of advertising, I can increase my advertising revenue by three to ten times.  In other words, if one of my sites is earning $10 per month from Google AdSense, I doubt that any amount of effort will bring in more than $100 per month for the same traffic.  (But I do recall once site which earned less than $1 eCPM for several years, all from AdSense, but when I re-evaluated the site and added other advertising, the AdSense eCPM doubled, and total advertising revenue rose above $15 eCPM in just a few months.)

How much will you earn from AdSense?  The answer is, “it depends.”  There are many factors that impact the effectiveness of advertising on your site, and the revenue you might earn from AdSense advertising. Obviously, “relevance” is critical — if AdSense can’t quite match up ads that are a close match to your site’s topic and audience, you’re unlikely to earn much money, no matter how much traffic you attract.

Update August 2012: See the comment below this post for current data showing AdSense revenue of only $0.50 eCPM over the past year, down from $1.86 eCPM for a similar site in 2004-2007.

As a web publisher, you should evaluate the performance of advertising on your site by computing the “effective Cost Per Thousand” adviews or “eCPM” (“M” is the Latin symbol for 1,000)).

The eCPM will vary considerably with your topic, the demographics of your audience, and their “mode” when visiting your site.

Unfortunately, if your web site has a topic and audience that isn’t highly valued by advertisers, you won’t earn much money. Indeed, many high-traffic web sites earn less than $0.10 eCPM (e.g. less than ten cents for every 1,000 adviews), and some sites have eCPM below one cent. Most web sites earn less than $1 eCPM (less than one dollar per 1,000 adviews).  Most of the largest, most famous web sites earn significantly less than $10 eCPM, although specific sections of these sites may draw significantly more (or less).

Regardless of your site’s topic and audience, however, another critical factor is the “mode” of your visitors.  Are they seeking entertainment? Are they trying to complete a specific process? Are they researching to buy a product?  It shouldn’t surprise you that this last “mode” is likely to draw the most advertising revenue. You might be surprised to realize that visitors engaged in a “process” are often the least valuable to advertisers — because it’s hard to distract them from that “process.”

This means that even if your web site is about “digital cameras” (a “hot topic”) and your visitors are affluent people who are interested in digital photography (a desirable audience), you still might not earn much advertising revenue — unless your visitors are engaged in an activity that’s likely to lead to a purchase decision. Thus, a web site comparing the features and flaws of different digital camera models (of interest to someone considering a purchase) might draw a relatively high eCPM, while a web site about “making the best use of auto-zoom” or “tips and tricks for taking good digital pictures” would draw a lower eCPM because those readers probably aren’t seeking to buy a new camera, and they are in a “learning” mode, not a purchaing “mode.”

There is also generally an “inverse relationship” between a site’s breadth and its eCPM.  A site that covers a broad range of topics usually has a lower eCPM than a web site that has a single narrow topic.  Of course, a site with a narrow topic usually has a smaller audience.

It is extremely unrealistic for 99% of web publishers to expect to earn more than $10 eCPM, and for most web publications, an eCPM of $2 to $3 is the highest realistic aspiration.  It’s also common for sites to see significant variations in their advertising revenue: $2 eCPM one year, $9 eCPM the next, and then only $3 eCPM the next year.

Moving Beyond AdSense: At some point, you will probably want to consider other advertising options, besides Google AdSense. Sometimes there are very specific advertising opportunities that “make sense” during a site’s development, or very soon after a site is launched.

For example, if I create a web site about scrapbooking, I might decide almost immediately to add “affiliate links” to Scrapbook.com, Scrapbook SuperCenter, ScrapbookPal, or Two Peas in a Bucket — perhaps right below the AdSense block in the right margin.  And if I write about specific products, I might make the effort to include specific affiliate links for consumers who may wish to buy those products from one of these merchants.  (With an “affiliate link,” the amount you are paid for the advertising exposure is based directly on sales — if a customer clicks an ad on your site and then purchases from the merchant, you are paid a percentage of the transaction.)

You might also consider “diversifying your advertising” by alternating ads from two different ad networks (usually AdSense plus another network).  You would allocate more “inventory” to the network that pays more, yet maintain an active relationship with the alternate network just in case performance plunges at the first.

Site Size: I generally recommend that web publishers not devote much effort to “selling advertising” (or optimizing advertising revenue) until a site draws at least 10,000 visitors per month (and for some types of sites, 100,000 visitors per month).  Do the math: if a site has 20,000 visitors per month and is earning an eCPM of $1.50 from Google AdSense, that means total revenue is just $30 per month. Even if the web publisher is confident that advertising earnings could be tripled, she must ask herself whether the extra earnings will be worth the time required to optimize the advertising!

One Response to “Using Google AdSense Wisely”

  1. Mark Welch says:

    Update: Since August 2011, I’ve included Google AdSense text ads on hundreds of the least-popular pages on my LessonIndex.com web site, which targets K-12 classroom teachers who are seeking lesson-plan resources for literature (example).

    Over the past 12 months, the pages with AdSense ads drew an average of just over 20,000 pageviews per month; the AdSense ads drew a very low clickthrough rate (CTR) of just 0.09% (less than one-tenth of one percent, meaning that fewer than one adview out of 1,000 was ever clicked).

    Earnings from Google AdSense averaged $0.496 eCPM/RPM,* ranging from $0.20 to $0.74 eCPM/RPM.*

    This is a significant drop in earnings compared to AdSense revenue on another web site (with a similar audience) which I operated from 2004-2007; that site earned an average of $1.86 eCPM/RPM during that period.

    Note that Google AdSense is only one of several advertising revenue streams for this site; affiliate-program advertising generates much higher eCPMs for the site.

    */ The terms eCPM and RPM mean the same thing: eCPM = effective Cost Per 1,000 adviews, RPM = Revenue Per 1,000 adviews.

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