How Adsense determines your earnings.

Google Adsense has a simple calculation formula in order to calculate the Adsense earnings of publishers. Before I go into explaining the formula, you need to first understand Adsense's lingo that they use.

* Clickthrough rate (CTR) is the number of clicks an ad unit receives divided by the number of times the ad unit is shown (impressions).

* Effective CPM (eCPM) is cost per 1000 impressions. From a publisher's perspective, CPM is a useful way to compare revenue across different channels and advertising programs. It is calculated by dividing total earnings by the number of impressions in thousands.

* Impression is the number of times an ad is displayed on Google or on sites or products in Google's ad network. A page impression is counted each time an ad unit is displayed on a publisher's site. Page impressions are used when calculating reports for Adsense publishers, rather than ad impressions.

* Earnings is total money that would be given by Google Adsense for publishers who participate in their affiliate programs.

* Earnings Per Click (EPC) actually is average cost per click that would be given to publishers depends on the sum of the click, page impressions and advertiser's bid. It is still unknown exactly how Google Adsense uses the EPC.

Here is the actual formula that Adsense uses:

CTR = (Clicks / Impressions) * 100

EPC = Earnings Per Click

eCPM = (Earnings / Impressions) * 1000
eCPM = CTR * EPC * 10

Earnings = eCPM * Impressions / 1000
Earnings = CTR * EPC * Impressions / 100

Hopefully this was a good starter tutorial on how Google Adsense works.


Digg Technorati del.icio.us Stumbleupon Reddit Blinklist Furl Spurl Yahoo Simpy

Posted in Labels:  

Subscribe to: Post Comments (Atom)

WHAT IS ADSENSE?

Photo Sharing and Video Hosting at Photobucket AdSense is an ad serving program run by Google. Website owners can enroll in this program to enable text, image and, more recently, video advertisements on their sites. These ads are administered by Google and generate revenue on either a per-click or per-thousand-impressions basis. Google is also currently beta-testing a cost-per-action based service. Google utilizes its search technology to serve ads based on website content, the user's geographical location, and other factors. Those wanting to advertise with Google's targeted ad system may sign up through AdWords. AdSense has become a popular method of placing advertising on a website because the ads are less intrusive than most banners, and the content of the ads is often relevant to the website. It currently uses JavaScript code to incorporate the advertisements into a participating site. If it is included on a site which has not yet been crawled by the Mediabot, it will temporarily display advertisements for charitable causes known as public service announcements (PSAs). (Note that the Mediabot is a separate crawler from the Googlebot that maintains Google's search index.) Many sites use AdSense to monetize their content and some webmasters work hard to maximize their own AdSense income. They do this in three ways: They use a wide range of traffic generating techniques including but not limited to online advertising. They build valuable content on their sites; content which attracts AdSense ads and which pay out the most when they get clicked. They use copy on their websites that encourage clicks on ads. Note that Google prohibits people from using phrases like "Click on my AdSense ads" to increase click rates. Phrases accepted are "Sponsored Links" and "Advertisements".
 
Copyright 2005-2008. Premium Hosting by SiteStudios.Org,Premium Template by Blogger Templates Sponsored by Flash-Games.