The AdSense revenue equation

Revenue is generated for you when someone clicks on an AdSense

ad on your site. Google charges the advertiser for the click

thru and shares this revenue with you.

The amount you earn from an ad is given by the following equation

Income PER AD=

Click thru price X

Fractional pay out X

Click thru rate X

Page traffic X

Appearance frequency

The CLICK THRU PRICE is the price the advertiser is bidding to

place an ad under the AdWords program and is determined by a

complex real time automatic auction process: Google advertisers

set a maximum price they are prepared to bid for keywords

and they usually pay less than this.

The FRACTIONAL PAYOUT RATE is the percentage of its revenues

that Google pays out to AdSense partners. THIS FIGURE IS NOT


CLICK THRU RATE is the number of times the ad is clicked on

divided by the number of times it is displayed ("impressions").

PAGE TRAFFIC is the number of times people visit your web page.

APPEARANCE FREQUENCY is the number of times a particular ad

appears on your page (remember that ads are rotated by Google

automatically and successful ads are shown more often.)

To repeat: this is income PER advertisement, so to calculate

your total AdSense income you need to evaluate this equation

for each ad on all your web pages and add up the results.

By the way, Google saves you the bother and tells you the


But already the complexity of the process is apparent and of

these factors, some are completely out of your control:

Fractional payout rate and Appearance frequency being two.

So let's look at those three factors that are at least

partially within your control.

*********to be continued

No comments: