How Adsense Works - Newbie Series

CCarter

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Starting out on the internet marketing journey Google's Adsense is one of the easiest ways to make money (monetize your site) from your website/blog. But when people start out I notice they aren't completely familiar with some of the intricacies of how it works, so I am going to do a quick breakdown.

Google's Adsense allows a user to put a piece of code on their website and display advertisements to earn revenue. Whenever a visitor clicks on one of the advertisements the publisher (owner of the website, YOU, the one who put Adsense up on the site), will get paid. Example of a 300x300 adsense advertisement:

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The advertisements comes from advertisers who utilize Google Adwords and their "Display Network" for advertising their products/services. The "Display Network" is the group of publishers(websites) which display banner advertisements, textlinks, and other rich media on their websites for Google in exchange for revenue. Once you put up Adsense on your website and are approved you will now be consider a part of the display network.

Now you have to understand this is a zero sum game. If there are no advertisers there is no revenue for you. So if you create a website in a niche no advertiser is targeting or wants to target, you will get the bare minimum revenue, if any revenue at all.

When advertiser #1 uses Adwords to place a bid, this is an auction style system, on a keyword which your website targets, you will start seeing their advertisements on your website. When a user clicks on the advertisement you will get a percentage of the amount they bid.

Let's say they placed a $1 bid for a keyword one of your pages with Adsense is targeting. When a visitor on your website clicks the advertisement you will get for simplification 50% (The real amount is close to 68% - Source: https://support.google.com/adsense/answer/180195?hl=en). So in our example you'll get $0.50 out of the $1 bid.

Now let's say Advertiser #2 comes in and bids $2, but only on Weekends. When a visitor visits your website on weekdays, they'll see the first advertiser's ads, and if they click you'll get 0.50 revenue per click. However when a visitor visits on weekends, since advertiser #2's bid is higher, they'll see advertisements from advertiser #2, and you'll get $1 per click from visitors.

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So naturally you are thinking, this is great, but I only want advertiser #2 on my site cause you are getting more money. You CAN block Advertiser #1 in Adsense, but that would result you in not getting any revenue during the weekdays from them since Advertiser #2 only advertises on the weekends. :( So you should probably not bother trying to play the "block the lower advertiser game".

The reality is advertisers can also block your website specifically if the traffic/visitors which click on their ADs on your site are not good, are not converting into sales, or are the wrong fit. So one week you might see your revenue going up and up in Adsense, but then all of a sudden you see a drop in RPM (Revenue Per thousand Impressions - how much revenue you are making per thousand visitors). The primary reason for this is because a high paying advertiser stopped advertising - maybe on your site specifically, maybe they turned off Display Network advertising, maybe they stopped their campaign since it was seasonal, or maybe they left Adwords cause it wasn't working out for them.

If you are watching the advertisements on your website you'll notice the change in ADs to different products/services - so if you suddenly see a new advertiser which results in a spike in revenue, they might be testing the water - and if your traffic is garbage, meaning it doesn't make it profitable for the advertiser to continue running ADs, then they'll stop. It's as simple as that. Is it starting to click?

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Advertisers not only have to be advertising within your niche, they must be targeting your country, location, and timing it with the best bid to get onto your particular website. The advertisers can control a wide varying options of how they spend their money. Maybe they only want to run ads the first week of each month, and then for the next 3.3 weeks, run nothing. Maybe they only run ADs when they want to get rid of inventory or want to boost sales, and hold off when things are slow (seasonal). Maybe All your advertisers only run ADs during the holiday season, and that's when you'll make your money and the rest of the year you'll get nada.

Whatever advertisers choose to do can and will effect your revenue - BUT you can combat this by being in highly profitable niches with lots of advertisers so if one drops out of the bidding process, there are thousands more willing to pay the highest cost possible to advertise on your site - unless your site is not creating profits or you get "smart-priced" cause your website is rather poor and not worth it to Google for you to be in their network at all.

The niche you choose, your website's subject, matters in the Adsense game.

If you are looking to have Adsense be a serious portion of your income you'll have to do one of three things.

1. Generate enough traffic so there is enough clicks from your visitors to generate your target goal of revenue.

2. Be in niches where the cost per click for advertisers (who advertise using Google Adwords) is high, so you don't necessarily need the same amount of traffic as a low CPC (cost per click) niche.

3. Both 1 & 2.

Let's take a scenario where you want to make $4,000 a month in revenue from Adsense from your website(s). I'm going to use SERPWoo's Keyword Finder in this example, you can use any keyword tool which showcases the highest bid CPC in Adwords.

If you go into a niche like 'free porn' (yes it's an extreme example but it's necessary for this guide), you'll notice most CPCs are extremely low, usually under $1, in the below screenshot there are 33,738 possible keywords an Adwords advertiser can target, yet when you switch the filter to "over $1" only 802 results remain. That means 33,728 - 802 = 32,926 keywords (97.6%) are UNDER $1 in CPC:

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If you are looking to generate $4K in revenue monthly at let's say the bare minimum of $0.05 per click, you'll need 80,000 clicks on your advertisements monthly. Now doing a bit of math, if 5% of your visitors click your ads (yes that's a realistic number, a bit high actually since the industry average is below 2%), you'll need 80,000 divided by 0.05 (5%) = 1,600,000 monthly visitors to come to your website, to generate 80,000 clicks, to get to your $4,000 monthly revenue goal.

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Now sit back and really absorb that. How much time and effort would you need to put in to generate 1.6 million visitors a month (53,334 visitors a day)? And second, if you have the ability to generate 1.6 million visitors a month, would you want to settle for a measly $4,000 in revenue? No. This is one reason Adsense is the "beginner" avenue to making money, but should not be the "end all" tool. You are leaving money on the table by not supplementing your income with other tactics (we'll go into details about different avenues of generating money in the future).

Another thing to consider is the mentality and user intent of the keywords. If a user is typing in a keyword like "free porn", what's the likelihood they are going to click on an advertisement, and then pull out their credit card to pay for the porn site they are visiting? literally ZERO since they are looking for 'FREE porn'. So if you are targeting keywords which will NOT make your advertisers money you'll have less advertisers, and have lower CPC revenue from your Adsense. (You see why 'free porn' was needed).

Overall ranking for a keyword like 'free porn' and needing 1.6 million people monthly from it to generate CPC revenue without any other monetization funnels in place is a bad scenario anyway you cut it. So when you create websites targeting 'lol elo boosting', 'clash of the clan' or whatever other dumb shit you guys waste time messaging me about, you can now understand why I prefer not to waste time engaging in your conversations.

Now let us look at another niche on the other side of the spectrum, 'life insurance'. Insurance itself is a billion dollar niche, so life insurance is more niched down:

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You'll immediately notice that once you filter the keywords to over $1 minimum CPC bid, you have 5,592 keywords left out of 7,440 potential - over 75% of their keywords are above $1 versus 'free porn' with 2.4% of their total keywords being OVER $1. And if you look at the keywords themselves they are more competitive (competition strength metric), and their bids are averaging from $10 to $60, with several going above $100, and one at $149.21 PER CLICK.

Now let's say you play on the low end of the spectrum to make it fair to free porn, I'll use $10 - to generate $4000 in monthly income you would need 400 clicks in a month. At a 5% click rate from visitors - 400 / 0.05 = 8000 visitors to my website in a month. That averages 267 visitors a day, versus 53,3334 visitors a day with 'free porn'. And remember we are on the extreme low end of 'life insurance'.

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Here are the numbers for CPC and how many visitors you would need daily with a 5% CTR to generate $4,000 a month in 'life insurance':

$10 CPC = 267 visitors daily
$20 CPC = 134 visitors daily
$35 CPC = 77 visitors daily
$60 CPC = 45 visitors daily

^^ these numbers seem more reasonable for daily traffic versus 53,334 visitors a day targeting niches like 'free porn' which have 97.6% of the queried keywords being UNDER $1.

This was an over simplified newbie guide since it doesn't take into consideration relevance, source of traffic, time of day, and much much more. Also in the $4,000 monthly example I didn't take into account that you only get 68% of revenue and Google gets the rest, so increase all CPC numbers by 30-50% for this to make sense. The key take away is if you are going to take the time to create a website, target a niche and use Adsense to generate the primary revenue - make sure you are targeting more profitable niches, more profitable keywords within your content, otherwise you'll be stuck in a battle you cannot win except through sheer volume, volume which you most likely cannot sustain, and the ROI will not be worth it overall. This is why keyword research targeting user intent is extremely important when looking for a niche.

Final word - Adsense should be the LAST option to monetize since there are other ways to generate more revenue, so start off with Adsense, but don't rely upon it forever, otherwise you are leaving a lot of money on the table.

If you have any questions drop them in here.
 
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Here are some tips I have on MFA sites or niches. These are just my personal preferences...

  • I try to filter for higher than $1 min. Generally because I know the amount of people doing Display in Adwords ( where most of your Adsense Ads come from ) is far far less than the amount doing Search. Also, the bids tend to be way lower per click on Display as well, so I try to set a filter for 5x-10x higher than the min. I want because so many fewer people are actually in Display ( but it's still a huge number ).

  • I look for ways to monetize even more. If the only way I can monetize is with just Adsense only or just eBay only, I'll pass on it. However, if this is something I know I can easily get money from Adsense, eBay, Amazon, affiliate networks ( CJ, LinkShare, etc ), and more, then it's a long term keeper for sure. I try to make sure I can earn money 2-3 different ways before I build.

  • Some Adsense ads don't pay when someone clicks them. They click, but you don't get paid. That's because some of the ads are set up to only pay on the 2nd click. Know the difference and only run link units that pay on the first click.

  • Some ad units are better than others. For instance, those large 350x200 ad units get tons of clicks because they are highly visible. They also get more clicks because it's one of the top used ad formats with Display networks. More people use this ad size so more inventory is available to you which includes remarketing inventory. The reason you aren't making ads on those skyscrapers is because no one is really building ads for them on the Display side of things.

  • This goes hand in hand with the above, but actually test out if Text only or Text/Display makes you more money. A lot of it will depend on what ad inventory is available for your niche and ad unit size.

  • People love to clicks links next to images. This is a small hint, but don't abuse it because Adwords has rules about this.

  • Don't be afraid to make your own offer. One time I was using Adsense on a couple related sites about Paintball Guns and decided to make my own offer which was an eBook. I had someone write up a small guide about picking the right one and placed a section on my site with it for people to buy it next to my Adsense ads. I ended up making 4x my money weekly from that and even went as far as making "Adsense look-a-like" ads on my site to get even more people to click on my offer since the eBook ads now looked like legit Adsense ads.
 
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What I've learned about Adsense over the years is that you can make some serious cash if you make the right decisions above that @CCarter and @eliquid mention.

In addition, I'd like to mention:
  • Don't even bother about CPM style advertising with Adsense. It's all about clicks of high value.
  • Nothing converts for Adsense better than the hot, targeted users sent to you organically from the search engines.
  • The higher you rank in the SERPs, the MORE hot the traffic is and the MORE of the traffic you get (exponentially) and the MORE they click. That's multiplicative earnings if you can secure a top 3 spot.
  • You should be creating informational content for users who are looking to take an action, and then provide every single bit of information they could ever need to make a decision except WHERE to make that decision. The answer is your Adsense blocks.
  • Split test everything from:
    • Size and shapes of blocks
    • Positioning on the page
    • Text only, Image only, Text & Image
    • Font family, font size, font color
    • What is around your ad blocks on the page
    • Left or right floats for rectangle blocks on desktop
  • You may consider locking some blocks to text only and some to image only, with the goal being having the lower earning ones lower on the page to pick up slack, but forcing the higher earning blocks to display the highest earnings ads (not just CPC but CTR as well, beyond what Google does for you).
  • Place your ads inside of your main content, not in the sidebars and headers. Top, middle, bottom. Play with the floats to have the content wrap around the ads. Make them pop into display:block and centered format at a certain width for mobile and most tablets so they go centered at that point.
If you're diligent, there's no reason you can't boast a 7-12% CTR on a $5 CPC and a $500+ RPM, or even much more higher if you can rank for more valuable terms.

Here's a couple examples I just pulled out of Adsense, not at all representative of some of the stuff I have managed to pull off, but it wouldn't be fair to only show my best and not my "in the present."
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Yes, Adsense is not the best option most of the time for most sites. But you can set about making it THE option and design your site around the monetization method specifically and make that sucker go.
 
Great thread, it's like a blessing from the marketing gods.

Question: As you know I tend to get a lot of Reddit traffic. After reading how people can blacklist your site in Adwords if the traffic doesn't convert etc

Would this be something that will end up hurting my site in the long run?

So basically will loads of non buyer intent social traffic hurt ones site in the long run?
 
So basically will loads of non buyer intent social traffic hurt ones site in the long run?

"Hurt" your site in terms of what?
 
Great thread, it's like a blessing from the marketing gods.

Question: As you know I tend to get a lot of Reddit traffic. After reading how people can blacklist your site in Adwords if the traffic doesn't convert etc

Would this be something that will end up hurting my site in the long run?

So basically will loads of non buyer intent social traffic hurt ones site in the long run?

In your case and most cases, no. I take this to mean you're talking about hurting your sites potential to earn (not get smart priced) and continue to advertise (not get banned).

If they click the ad, they were interested enough to click it. They will explore the lander on the other side, and some portion will purchase or whatever it is.

Now, if you're employing tricks to get people to click, yeah you're screwed in the long run. Google's going to put an end to it as soon as enough advertisers complain. An accidental or trick click immediately closes the window or hits the back button.

An actual interested click from cold traffic is still interested. That's just a numbers game and you should definitely go for it.
 
"Hurt" your site in terms of what?

Increasing the likelyhood that bidders would blacklist my site if my clicks didn't convert on their end

So by hurt I mean my earning potential
 
Increasing the likelyhood that bidders would blacklist my site if my clicks didn't convert on their end

So by hurt I mean my earning potential

Advertisers tend to do it one by one, so it's up to them, nothing really you can do or worth really worrying about IMO. I'd be more concerned with Google finally throwing down the hammer on accidental clicks.
 
Yay thanks for putting this together :smile: I have been using adsense for a year and still learned some (now they seem) obvious things that I was doing wrong.

@CCarter What app are those screenshots from? The keyword thing
 
Not really a newbie question, but what role would "ShakerPages" play in your overall analysis? For example, monetization.

They are just regular pages that generate revenue from adsense. Is that what you are asking?

They may be bottom of the barrel content with a majority of them being consider duplicate, but if you are in a serious niche like insurance you can go to town with localized SERP Shaker projects and make a killing.
 
They are just regular pages that generate revenue from adsense. Is that what you are asking?

They may be bottom of the barrel content with a majority of them being consider duplicate, but if you are in a serious niche like insurance you can go to town with localized SERP Shaker projects and make a killing.
Sounds like another churn/burn tactic. Would that be accurate? Not to mention it would probably be risky for the more competitive niches. No?
Thanks for your reply CCarter.
 
Sounds like another churn/burn tactic. Would that be accurate? Not to mention it would probably be risky for the more competitive niches. No?

Yes it could be. SERP Shaker is designed to be used primarily for extreme grayhat tactics, more black than white, but depends on your setup and goals. I wouldn't use it on my primary Adsense account which I care about. You should look at the BH.C tutorials on it, cause they talk about spreading the risk across multiple Adsense accounts, so... you draw your own conclusions. I will say Hernan is a friend and I consider an ally, if not at the very least a member of The Resistance.

Master both sides of the force young Jedi, and then learn when to use the dark and know when to use the light.
 
Not sure to post this here,anyway i'll still ask,between TE and the serpwoo keyword tool which one is better?secondly coming from a third world country like kenya making money with adsense is peanuts because not a lot of guys advertise with google is it possible to make that much of cash 4000$,from here?and thanks ccarter,eliquid and ryuzaki for this awesome thread.
 
coming from a third world country like kenya making money with adsense is peanuts because not a lot of guys advertise with google is it possible to make that much of cash 4000$,from here?
Yeah, you can get traffic from Kenya and still make $4k in revenue with adsense, but it's all about the CPC of your keywords and the amount of traffic you need to generate in order to get the income you're aiming for.
The formula it's explained in the first OP's message.
 
Not sure to post this here,anyway i'll still ask,between TE and the serpwoo keyword tool which one is better?secondly coming from a third world country like kenya making money with adsense is peanuts because not a lot of guys advertise with google is it possible to make that much of cash 4000$,from here?and thanks ccarter,eliquid and ryuzaki for this awesome thread.
Yeah, you can get traffic from Kenya and still make $4k in revenue with adsense, but it's all about the CPC of your keywords and the amount of traffic you need to generate in order to get the income you're aiming for.
The formula it's explained in the first OP's message.

The question is - Is it worth it? As @CCarter stated with that "free porn" example, if your CPC is seriously low, then you should consider going in other niches, and if there is no high paying niches, either find other ways to monetize or just switch your market. Go into the english speaking one.

@CCarter is it possible to see what ads are generating the most clicks? Like statistics. I don't mean sizes, but specifically ads.
 
I have a question, how come when I optimize for a high CPC keyword I don't even see a fraction of that when someone clicks an ad on that page?

Example $5 CPC keyword.

I write an article around it.

Get traffic

Then when I get clicks they are 0.5$
 
@CCarter is it possible to see what ads are generating the most clicks? Like statistics. I don't mean sizes, but specifically ads.

Disclaimer: I am not CCarter

No, it is not. Google promises to weed them out and only display the highest paying ones... as this would be in their own self interest.
But nope, ya can't see.

::emp::
 
Why you guys aren't getting 68% of the CPC you see in the tools:
  • You should be using the adwords display planner tool and not the keyword planner tool for CPC research to estimate adsense earnings
  • The price you see is an estimate of what they should bid to be the highest bidder
  • It's an auction
And since it's an auction, If I bid $10 per click and the next highest bidder is bidding $5 per click, I only have to pay $5.01 to be the highest bidder, not $10.
 
^^ don't forget getting smart priced too.



One strategy I like to do and keep ( and several will probably disagree ) is that I like to keep a mix of high pay and high volume type income sources.

The perfect fit is having sites that are BOTH high pay and high volume.

However, it normally doesn't work out this way for most of us. You generally can get a high pay, low volume niche ranked and/or a low pay/high volume niche ranked.

Take the porn example CC pointed out, that's high volume but low pay. Some of my sites are high pay but low volume.

The thing is, At any time these sites can get smart priced, penalty bounced, etc. So what I like to do is treat it like a stock portfolio and get diversified.

I like a mix of 80% high pay & low volume, with 20% high volume low pay currently.
 
between TE and the serpwoo keyword tool which one is better?

Any keyword tool with CPC works, I literally state that in the OP. "Best" is determined by how YOU use it and what YOU are comfortable with, but you are using this "find the best" as an excuse for more procrastination.

secondly coming from a third world country like kenya making money with adsense is peanuts because not a lot of guys advertise with google is it possible to make that much of cash 4000$,from here?

Why not create a website focused on a different country if "NOTHING" is profitable in Kenya? Why not create a website targeted toward USA, Canada, or Europe from niches where people living in those countries relate to? Why do you have to do anything with Kenya?

To be honest I know you haven't done any research with keyword or niches at any level In Kenya, cause you are lazy - just based off of your past statements & posts and the fact you haven't gotten as far as deciding on which keyword tool to use (any FUCKING keyword tool works), so you are just using your own predilections of Kenya - all based on NO SUCCESS already.

It's very fucking simple, if the problem is "Kenya", then take "Kenya" out of the fucking equation and target another country, and their citizens. How about creating a fucking tourism site for New York City, or Boston for people coming from Canada or anywhere around the fucking world. You keep concentrating on Kenya cause that's your fucking crutch and excuse to being lazy. Who the fuck in the world said you can ONLY target the country you are in?
 
@CCarter, does traffic leaking to any of this high paying CPC niches pay high clicks compared to search engine traffic

It's based off the advertisements on the page already. So if your site is geared towards life insurance for example and you already have high CPC ADs showing up on adsense on your pages you should know your average CPC already. Your source of traffic doesn't matter, unless you start sending non-converting traffic and get smart-priced cause Google detects an anomoly or the advertisers just start blocking your site altogether cause of your garbage traffic.

tldr; You can traffic leak to a high cpc website you created. But make sure the traffic makes sense and will convert for advertisers at SOME level if your visitors click on the Adsense ADs.
 
It's based off the advertisements on the page already. So if your site is geared towards life insurance for example and you already have high CPC ADs showing up on adsense on your pages you should know your average CPC already. Your source of traffic doesn't matter, unless you start sending non-converting traffic and get smart-priced cause Google detects an anomoly or the advertisers just start blocking your site altogether cause of your garbage traffic.

tldr; You can traffic leak to a high cpc website you created. But make sure the traffic makes sense and will convert for advertisers at SOME level if your visitors click on the Adsense ADs.

My question to this would be the about the re-marketing. Wouldn't the user see their cookied ads (if they have any) and not the contextual ads?
 
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