Savvy Affiliate

There is a common equation that many people look at when they try to determine how much income they will make from Adsense.  That equation is.

Adsense Income = Traffic  * Payment Per Click * Click Through Rate

However I believe that it the income can be more accurately described by breaking down the equation another step.  By splitting the Click Through Rate into its components you get

Adsense Income = Traffic * Payment Per Click * Ad Placement * Targeted Advertising

Making money with Adsense all comes down to that simple equation.  These are the four basic elements to generating income with adsense, and if you miss any one of them, you won’t make any money.  Your adsense income is only as great as the weakest link in the equation above.  It is clear that if any one of the components is missing then your profit will suffer dramatically.  In order to maximize your Adsense profit, you need to spend your time improving all the elements above.

Traffic - Traffic is an essential element to making money with your webpage.  In fact, it is the element that most people spend all of their time focusing on, overlooking the other components of the Adsense equation.  Traffic is essential since clearly the more people you have looking at your ads, the more likely people are to click on them.  If you can double your traffic, then it is likely that you will double your adsense income.   Actually, depending on where you double your traffic from, you can do better than doubling your adsense income.

There are a lot of ways people go about driving more traffic to there webpage.  Some of them include Advertising, link trading, becoming active in forums, becoming an active commenter on other blogs, posting articles on social networking sites, and trying to optimize their search engine rankings.   Seomoz has some more great tips on how to increase your traffic.

Payment Per Click - Once you have started getting traffic to yoru site, and starting having people click on your ads, one of the easiest ways to make more money is to increase the amount of money you make for each click.  Think about it, what could be easier, you don’t have to write extra content, you don’t have to change your blog layout, you don’t even have to talk to other blogs or try to linkbait.  All you need to do is drive up your payment per click.  If you are making $.25 for each click, doubling it to $.50 will obviously double your income.

So I said that it was easy to drive up your payment per click, but how do you do it?  The key is to target specific keywords when you are writing.  What are those keywords?  They obviously depend on your industry.  And how do you find them out?  Well one way to find out which keywords pay the best is to simply do a Google Search for various word combinations and see how much advertising appears on the right side for each word.  Scroll past page one.  Are there pages and pages of advertising filled up?  If so then many people are bidding on those keywords.  If there are many people bidding on them it is likely that they have bid the price up.   Want a more rigourous method of determing the best keywords?  If you have a Google Adwords account you can log in and use information there to find out what to focus your content on.  Here is a full article on how to determine the most profitable Adsense Keywords.

Ad Placement - Where you place your ads and what they look like is essential to ensuring a high click through rate.  Even if you have a ton of traffic, if only a small percentage of your visitors see your ads then it doesn’t do you very much good.  The first thing that you have to decide is what you are writing for.  Do you just like to have a nice blog and get lots of traffic and impress people with your ideas and opinions?  Then you should probably keep the advertising discreet.  Do you want to maximize your income?  Then you need ads on your page that people notice.

The first step is to put the ads above the fold.  Ads at the top of the page do better than ads at the bottom of the page.  Ads on the left side do better than ads on the right side of your website.  Can you wrap some text around the ads?  That is even better.  Embedded ads in articles that they are targeting have some of the highest click through rates.

Additionally it is important what the ads look like.  Although your visitors will know that they are ads, you don’t want to make the advertisements too obvious.  General rule of thumb is that you want to blend the ads into the rest of the webpage.  If you use a white background with black text, do the same for your ads.   Borders are a definite no.   Some more great information on Ad Placement can be found on this site

Targeted Ads - Imagine that you have a great site.  You are getting lots of traffic, people are looking at your ads, and if they clicked on them, you would be making lots of money.   But you aren’t making lots of money. Why not?  No on is clicking on your ads.  Why aren’t they following your ad links?  Because the ads aren’t targeted.

It is important to make sure that your ads are targeted to your website.  If you put a general adsense block on your blog, it looks at all the words on the blog when it decides what the content of your site it.  Therefore even if you have a site about digitial cameras, but you have a Blogroll with lots of links like “Mike’s Blog” and “Adsense Blog”  then Google might decide that your webpage is about blogging and not about digital cameras. 

To combat this you can do two things.  First is that you can go into Google Adsense and specify where you want it to focus on your page.    You can tell the ad to only look close to itself when it is determining content.  The other thing that you can do in order to block wrong Adsense ads is to use the Adsense utility to list keywords or other websites that you don’t want shown.  If you consistently get the same wrong websites time and again, blocking them will help ensure that the correct sites show through. 

Obviously this is just the tip of the Iceberg when it comes to Google Adsense.  This is part 1 of the Adsense Tutorial, in subsequent posts I will be covering each topic in greater detail