5 major Factors that determine your Google Adsense earnings

Every new blogger (within 2 years) wants to monetize their blog only some want to manage to survive in this platform, others quit this profession within a year because not seeing any income opportunity in this or not getting enough traffic that they wanted.

Some of those who managed to overcome and monetize their website with Google Adsense failed to focus on writing and marketing their websites it causes low traffic which in turn leads to no earnings from their site. This article is for small bloggers like us to understand, "What are the factors that determine Google Adsense Revenue", which will help them to understand How Adsense works.

Before that understand that Google Adsense generates money from either per-Click or per-Impression basis.

Factors determine Google Adsense Revenue:

Earnings from Google Adsense is really complicated, It is based on several factors like

1. Website Traffic

2. CPC (Cost-per-Click)

3. CPM (Cost per Impression)

4. CTR (Clickthrough Rate)

5. RPM (Revenue per Thousand Impression)


Now let us see about these factors.

1. Website Traffic:

It's one of the most important factors in users' Adsense earnings. The more visitors a website has, the more chances of earning more.

The more potential your website has the more chance of your website getting high ad impressions and ad clicks which increases your CPM and CPC.

For example, if a website gets 1000 impressions then that user may get earnings between 0.05$ to 5.00$ depending upon his website's niche and competition of that niche.

2. CPC:

Cost-per-Click or CPC is a huge factor in the websites' revenue.

The cost-per-click (CPC) is the amount you earn each time a user clicks on your ad. 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. [Source - Google]

 Like Google said that your CPC is valued by advertisers based on what ads placed on your site. Don't think that you get more money by focusing on high-value CPC because of some high CPC value ads may not impress visitors to click that ad. Sometimes the number of clicks you get from medium CPC or low CPC will bring more money than the low number of clicks on High CPC ads.

3. CPM:

Cost-per-Impression or CPM ads. The "M" in CPM represents the word "mille," which is Latin for "thousands." source

CPM stands for "cost per 1000 impressions." Advertisers running CPM ads set their desired price per 1000 ads served and pay each time their ad appears. [Source - Google]

You will receive revenue whenever CPM ads are placed on your website and visited by the users.  CPM ads compete against cost per click (CPC) ads in their ad auction, and Google Adsense will display whichever ad is expected to earn more revenue for you.

For example: If a website publisher charges $2.00 CPM, that means an advertiser must pay $2.00 for every 1,000 impressions of its ads on its website.

4. CTR:

Clickthrough Rate or CTR.

The clickthrough rate (CTR) is the percentage of impressions that led to a click. [source]

CTR is calculated by Clicks divided by Impressions your websites received.

CTR = Clicks / Impressions

For example, let us consider that a website receives,

Clicks - 12
Impressions - 1000

then

CTR = (12/1000) * 100%
         = 0.012 * 100
         = 1.2%

Therefore your CTR = 1.2% as for the given example.

5. RPM:

Revenue per Thousand Impressions or RPM.

Revenue per 1000 impressions (RPM) represents the estimated earnings you'd accrue for every 1000 impressions you receive. RPM doesn't represent how much you have actually earned; rather, it's calculated by dividing your estimated earnings by the number of page views, impressions, or queries you received, then multiplying by 1000.

Formula:

RPM = (Estimated earnings / Number of page views) * 1000

[source]

For example:

If you earned an estimated $0.15 from 25 page views, then your page RPM would equal ($0.15 / 25) * 1000, or $6.00.
If you earned an estimated $180 from 45,000 ad impressions, your ad RPM would equal ($180 / 45,000) * 1000, or $4.00.

RPM is a commonly used number in advertising programs, and you may find it helpful for comparing revenue across different channels.


Now you learned about the factors, so let us see the definitions of some terms  I used in the above factors.

Definitions:

1) Impression: It is the number of ad units (for content ads) or search queries (for search ads) that loaded ads. [source]

In simple words, it is the amount of time that ads visited by users on your website or particular page.

For example: If your blog post has 3 ad units and it is visited 5 times then your impression is 15 (3ads * 5times).


2) Clicks: The number of times an ad was clicked in a period of time.

3) Page views: It is the number of views that your page receives.

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