Making money from a website used to be extremely challenging – not only did you have to produce great content and promote it effectively, you also had to go out and find advertisers to give yourself a revenue stream to live off of.
Google changed the playing field for many web publishers because they went out and found you advertisers for your website. Every time your users click on one of your ads, you get paid and Google takes a commission. As Google AdSense grew to become the largest online ad network they could also find targeted advertisers who might only advertise on one of your pages but not the others because it was of specific interest to them. That kind of needle-point precision helps increase your number of clicks because it’s more targeted information and also would have been nearly impossible to manage if you had individual advertisers approaching you to place ads one page at a time.
Best of all, Google AdSense is extremely easy to install. You just have to copy and paste a few lines of code into your website template and Google takes care of the rest!
“I thought to myself “You CAN make a living from this!” Four months later, in May, I passed the $300 per day mark for the first time.”
Making Real Money From Google AdSense
Most website owners that have AdSense installed barely earn enough each day to buy a cup of coffee. When I first started in January of 2005 I was making $0.27 per day. I thought to myself “I’ll give this AdSense thing a try.” By May, as my traffic grew, so did my AdSense revenue. Suddenly I was making $1.17 per day. Unfortunately a lot of website owners never get past this stage. I thought to myself “Maybe I can do better” and delved into the world of AdSense optimization, or in other words, figuring out how to make the most from the traffic I had coming to my site. The hardest way to make money is to increase your number of visitors. The easiest way is to make more money from the visitors that you already have.
After optimizing my AdSense and continuing to grow my business I first crossed the $100 per day mark in January of 2006. I thought to myself “You CAN make a living from this!” Four months later, in May, I passed the $300 per day mark for the first time. The rest, as they say, is history. In this series I hope to share with you some of the tactics that worked for me and hopefully you can use them to grow your online business as well.
“Most online entrepreneurs who try AdSense get one or two of the important success factors but not all three which is why they can only buy themselves a cup of coffee per day from their AdSense earnings.”
$ = V x CTR x CPC
This is the most important formula that you need to know if you’re planning on using AdSense to make money. The money that you make ($) is equal to the number of visitors (V) that you get to your site multiplied by the click through rate (CTR) of those visitors onto the ads on your site multiplied by the cost per click (CPC) of the ads being clicked on. If you want to be able to live off of your website then you need to have traffic coming to your site, a high percentage of the visitors who come to your site clicking through on your ads, and you need to be in a niche topic where people are willing to pay a lot of money to advertise. You need all three working together to be successful. Most online entrepreneurs who try AdSense get one or two of the important success factors but not all three which is why they can only buy themselves a cup of coffee per day from their AdSense earnings.
Let’s look at the following chart to explain this important point:
You could have an extremely popular site but if it’s not optimized for AdSense and it’s not in a high paying niche then you’re only going to make pocket change from your earnings. Similarly if all you do is optimize for AdSense but don’t have many visitors and you’re in a low paying niche then you still won’t be making very much. Finally, if you are in a great niche but have low visitor numbers and don’t AdSense optimize then you’re again just going to be scraping by.
Even if you get two of these factors right you still won’t hit a big payday. For instance if you have a popular website and optimize for AdSense but it’s in a niche that doesn’t pay well then you will need to find a day job to support yourself. You’ll get the same results by picking any two of these factors.You will only break out when you can get all three working together. The reason is because each number is multiplied by one another. If you have the equation A x B x C, even if A and B are massive numbers, if C is very low, you’ll still end up with a small amount.
For information on how to increase your Visitors you should learn about search engine optimization and Twitter. In Part 2 of this series I will look at another way to dramatically increase your Visitors and then continue the series by discussing ways to maximize your CTR and CPC to help you start earning a real living from AdSense.