What factors influence my earnings?
Although it's difficult to determine how much you can expect to earn using AdSense, it's important to set realistic goals and expectations. There are many factors that influence earnings. Below is a list of some of the main factors that drive your earnings:
Traffic - How much traffic does your site receive? While many factors influence earnings, traffic is the most significant. The more people that visit your site, the more likely you are to receive ad clicks and revenue. In general, earning potential is greater for higher traffic sites than lower traffic sites, and even greater for sites that have legitimate traffic from users interested in the site's content.
What's considered high traffic? This depends largely on the type of site you own. Larger sites in our network might receive over a million hits a day, while many smaller sites receive closer to a thousand a day. However, if your site is a personal blog that you promote largely through word-of-mouth, a thousand hits might be considered quite successful.
While there's no magic formula to determine how much revenue you'll receive based on a certain amount of traffic, it helps to be realistic about your earning potential. For example, for every thousand page impressions you receive, you might earn anywhere from $0.05 to $5.00. While most publishers will fall within this range, you might notice that it's a very large range. Factors such as cost-per-click (CPC) and clickthrough rate (CTR), explained below, have a large impact on where in this range you might fall. In addition, sites with very low or inconsistent traffic are likely to fluctuate within a much larger range.
Cost Per Click (CPC) - How much will you earn per click? This question is difficult to answer because it varies so widely. The CPC for any ad is determined by the advertiser. Some advertisers may be willing to pay more per click than others, depending on what they're advertising.
Cost-per-click is based largely on supply and demand. If advertisers are willing to pay more for their ads, you'll earn more for each click. While it's nice to receive higher paying ads, keep in mind that higher paying ads may be aimed at a smaller target audience and therefore generate less interest and ultimately fewer clicks. For example, advertisers selling luxury homes might be willing to pay more than advertisers who sell books. Therefore, if your site is about luxury homes, the ads that display on your site might pay more per click than those for books. However, you might also find there's less interest in luxury homes than in books, thus offsetting the cost-per-click difference.
It's important to remember that we always show the ads that will perform the best, and the inventory of ads we choose from is determined largely by the topic of your website.
Clickthrough Rate (CTR) - The other factor that influences earnings is clickthrough rate (CTR). CTR is a measure of how often users click on your ads. For example, if you receive one click on your ad after 100 people have viewed that ad, you are said to have a CTR of 1%. Once again, the "average" CTR for a website will vary based on the site. However, for a larger site, 1% might be considered a decent clickthrough rate.
Effective CPM (eCPM) - Finally, while CPC and CTR are important factors in determining how much you may earn, you may find eCPM to be a more helpful statistic to keep track of your earnings. Earnings per 1000 impressions, or eCPM, is an estimate of how much money you would receive if you had 1000 impressions. For example, if you made one dollar with 100 impressions, your eCPM would be $10.00 ($1/100 impressions X 1000 impressions). Keep in mind that this is only an estimate; the more impressions you have, the more accurate the estimate will be. If you have only 10 impressions and you happen to make a dollar from those impressions, it's not realistic to think that your eCPM of $100 would be accurate. ECPM is an important statistic to help you gauge how well your site is performing.
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