I recently gave a session on WP Camp Germany in Berlin on how to optimize your income from ads on your website. As the discussion had shown, a lot of listeners where just starting to monetize their website and their first question was related to how much AdSense pays you in general. In this article I am going to review some information on the potential of AdSense income, list some benchmarks from various sites, and give basic optimization tips.
How to earn money with AdSense
AdSense is an ad network belonging to Google. It is the biggest ad network in the world and the main service through which Google can display ads on a lot of websites. The secret behind AdSense is its simplicity. As a website owner you just need to sign into your account, create your first ad, and insert the source code on your website. The last one is the trickiest part for non-technical publishers, but still a lot easier than what some other ad networks ask you to do.
At the beginning there was just one way of getting paid with AdSense and this was on a per click basis. This means that you earn money each time a visitor to your site clicks on an ad. It doesn’t matter what he did afterwards on the target website. But before you start thinking about it: When Google figured out that some people tried to raise their payments by clicking on the ads on their own sites, they started penalizing for such behaviour.
68% of the click price
How did Google AdSense determine the amount you receive per click? Google also runs AdWords, which is kind of a mirrored service to AdSense. On AdWords advertisers running shops, services, or other marketers create ads and tell Google to publish them on either the Google search engine or in the display network, so all websites belonging to the AdSense network. 68 percent of the amount an advertiser pays per click on their ads on your site is your income. The rest is Google’s commission fee.
This still isn’t all you need to know about how much AdSense pays you. The costs per click are calculated in an auction. Every ad that is somehow in the pool to potentially be displayed on your website takes part in it. In this auction, it isn’t just the highest bidder that wins, but the winner is also determined by his “quality”. Without going deeper at this moment just remember that Google will ultimately run some smart algorithms that try to get the highest income per thousand impressions (return per mille = RPM) for you (and them).
CPC, CPM, CPE
In addition to the cost-per-click (CPC) model, there are two other bid types. Cost-per-thousand-impressions (CPM) is an income model where advertisers pay you a fixed price per thousand ad impressions. No click on them is necessary for you to earn something from AdSense. This bid type only works if advertisers choose on AdWords that ads should be displayed only on your website. Before they can do that you need to ad custom channels. I might cover this in an upcoming article, so you might want to subscribe to the newsletter so as not to miss it.
The most recent bid type is cost-per-engagement (CPE). In this case the advertiser is defining an action the visitor needs to fulfill like expanding the ad, watch a video ad, finishing a poll, etc. This form is so new that the documentation from AdSense doesn’t even mention it. As much as I would like to increase income from AdSense, we will have to see how visitors react to this, because the new engaging ad units might be a bit more jarring than the classical text or image banners.
Which is the best bid type?
You are not able to select the bid type yourself. Google calculates the best income when combining them based on what runs best on your website. If advertisers know about your good reputation and book CPM campaigns on your website, they might outrank your CPC income. If your CPC banners are well placed and your content is written for valuable topics like finances, your CPC might be unreachable. Lets see how the new CPE ad types kick in. The first AdSense accounts I have seen them in look very promising.
Should I use AdSense?
Once the ad code is inserted in your site, you are ready to earn money with AdSense. In practise, there is just one little problem for most small websites: to earn money with any kind of ad type you need traffic on your website.
This is the point where I normally stop new publishers who ask me for consulting. You are just building your content and reputation, have to fight for every newsletter subscription and the absolute traffic is below 10.000 pageviews a month. In this situation you should consider waiting with ads on your website. They might not only drive potential visitors away, but you also need time to manage and optimize your ads. Are there exceptions? Yes, there are. You will know when you see one.
Some website owners explain their banners in terms of their costs for hosting and the domain. I personally consider both to be so cheap nowadays that any hour practically worked for free on your project costs you much more than those things. If you don’t need those extra few cents per hour wait with AdSense or any other ad network until your website has grown significantly.
How much can I earn with AdSense?
AdSense earning examples
The answer to how much AdSense finally pays you depends on many variables. Still, the most important is the content on your website. Still, this is not a very specific answer to your question. Neither Google nor most publishers like to publish numbers on how much they earn with AdSense. I also won’t publish my clients’ income reports and their name so blank in this article. Sorry for that.
Still, there are some numbers I found thanks to Peer Wandiger, a German blogger who publishes monthly reports on incomes gathered from various sites. I took the following examples from his review in September 2013.
$48/ 1000 visits
The first impressive number comes from Pat Flynn, the owner of SmartPassiveIncome. In his own September report he stated that his niche site SecurityGuardTrainingHG.com generates $1,466.33 in revenue with 800 to 1,000 visits per day. This is about $48 per 1000 visits and is a very respectable number for such a niche site.
Other ad networks beyond AdSense
A great example of the chance for ad diversity is the income report of pinch of yum. Here, AdSense has the smallest income from an ad network. They seem to be more successful with the use of BlogHerAds. If you are more familiar with AdSense and ready to go a step further, there is probably also an ad network better suited for you.
Also moms-make-money.com earns more from other ad networks and income sources than from AdSense. Still, $272.82 for 158,710, which seems to be page views, is not bad at all considering the fact that you hardly notice the ads from Google.
Some general AdSense benchmarks
Even though I can’t state detailed income reports from my clients, I would like to give you a general benchmark of how much AdSense pays you when you use it on your website. I already summed up the 3 rich media banners you are allowed to use as well as link banners and the Google search on your website. Of course, your income is also highly dependent on the size and placements of the ads, but you will see there is a wide range of income possibility.
$0,25 – $3 RPM for unspecific, generic content
When you are running a forum, social network or directory of non-business information, chances are your AdSense income might not jump over $3 per 1000 page impressions. This is due to either ad blindness of returning visitors or information, that isn’t connected with products and won’t attract visitors eager to buy anything. Even affiliate programs might not really work here.
$1 – $10 RPM for content-rich sites, e.g. blogs
Content-rich sites like blogs should perform better with AdSense. How much AdSense pays does still depend on your niche and how you implement the ads, but a high frequency of new visitors and placement close to the main content will lead to a decent income. If you have a higher amount of traffic you might want to try other ad networks, affiliate programs and split tests.
$10 to a lot more for product-related sites
This is no surprise. If you are running a product-related website, like a blog about products and services, review products or a business directory, your income from AdSense, but also other sources should be the highest. But don’t think you are the first to have this idea 😉
What to do now?
Many of you might now be thinking of leaving your current hobby blog and starting a website with product information to earn more money from AdSense. Stop for a minute and rethink your monetization strategy. Maybe it is just AdSense that doesn’t fit you and your content. Or maybe you should check your banner performance and can earn more by using my basic optimization tips. Still, the numbers I mentioned are in such a wide range that I would love to read your comments about your AdSense income to either prove me right or wrong.