Analyzing AdSense Like a Stock Broker
The AdSense triad: traffic, CTR, and CPC
There are three main factors that lead to increased earnings: traffic, click-through rate, and CPC.
You’ll hear marketing types occasionally tell you their job is: to sell more stuff, to more people, more often, for a higher price. That’s definitely how to maximize your revenue. But those are just the objectives, not the execution plan. What are the strategies for actually achieving it?
These two factors line up nicely with volume and price in the stock market world. Your AdSense revenue is directly affected by the amount of traffic you have and the cost-per-click you’re getting.
Further drilling down, Google AdSense works by matching ads with content. A certain type of content can get more matches while others get significantly less matches. Google operates a bidding method, so the more advertisers you match with the better.
Also, it’s not just quantity but quality too. If you can attract many advertisers that are willing to pay a significant amount to receive traffic from your website the better off you are. In order to attract high paying advertisers you need to create content that focuses on high paying keywords that Google will match with high paying advertisers.
Keyword = Stock
Back in the stock market world, the last price that a given stock sells at is its price. That’s the value the market has set for it. In the AdSense world this maps with CPC, or the cost per click that advertisers are willing to pay you for every ad click on your site.
So you have some content on your forum or blog with keywords. The keywords are what AdSense uses to decide on which ads to display. And the CPC rate for those keywords is what decides how much you will make on every click.
Think of the CPC for a keyword as the stock price.
CPC = Stock Price
If you hired a stock trader to advise you on how to pick what new content to create, it would go a lot like this:
Once you have keywords that fit that criteria, you invest. And in the AdSense world, that means creating and publishing new content that covers those keywords.
It’s the kind of content that not only has lots of traffic, but lots of traffic that you can get a share of. When you do, every click pays well. You don’t need to attend a Gordon Gecko seminar to know that that is a winning formula.
So we have the theory down. Now we need the tools to make it happen.
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ABOUT THE AUTHOR
Eyal KAtz is Head of Marketing at Ad Ngin