Understanding AdSense

AdSense is an advertising program that anyone who publishes a Web site can
use to generate income for their Web site. But there’s one small condition —
Google must approve your site before ads are shown on your site.
A longer explanation is that AdSense is an ad-placement program that utilizes
Google’s proprietary search capabilities to determine the best placement for
ads that are purchased through the Google AdWords program.
AdSense is contextual advertising, or ads that appear in the context of surrounding
content. What this means for you is that AdSense ads are related to
the content of the pages on which those ads appear.
It sounds complicated, I know. And really it can be very complicated, but the
bottom line is that with AdSense, you can place ads on your Web site that
are targeted to the content of your site. So, if your site is about Chinese
Crested dogs, ads for Web-based human resources applications don’t show
on your site.
In return for placing those ads on your site, you’re paid a small amount each
time one of your site visitors clicks an ad, and in some cases, even when site
visitors just see the ads.

Money Makes AdSense Go ’Round

Okay, so AdSense is (in essence) an advertising program. But why would
you want to use it? Well, for the money, of course. AdSense is an easy way
to generate income from your Web site, even if you’re not selling anything
on the site.
And while creating income is the most likely reason that publishers use
AdSense, it’s not the only one. Some publishers use AdSense as a means of
making their Web site more valuable to site visitors.
Anyone who displays an AdSense ad is considered a publisher, whereas
anyone who purchases the ads that are displayed through AdSense is an
advertiser.
Now, this is where a lot of debate usually begins. Experts (who are usually
people who know a lot just about a given subject) tend to disagree about
the value of any type of advertising on your Web site. Some experts say that
any advertisement that takes people away from your Web site is a bad thing.
Others say that ads are okay, in the right places. You can read more about ad
placement in Chapter 3.
When placed properly, AdSense ads can add value to your Web site by pointing
users to other resources related to the topic of your site. This means
they’ll probably surf away from your site at some point. But if your site is
well built (which is essential if you intend to grow traffic over time), it’s likely
that users will come back to your site again in the future.
The value here is that users not only get what they’re looking for, but you get
return traffic; and because you’re using AdSense to help those users find the
information they need, you’re also making a little extra money in the process.

Deciding Whether AdSense Is Right for You

Even though there are a lot of benefits to using AdSense, it’s not for everyone.
Just like not everyone likes the idea of eating chocolate, there will be
some who aren’t willing to risk that AdSense ads push (or draw) traffic away
from their Web sites.
One good example of this is if you have an e-commerce Web site that features
products on every page. Many e-commerce site owners aren’t willing to
include advertisements on their pages because the ads can cause site visitors
to surf away before they complete a purchase.
What it all really comes down to is to know how badly you would be hurt if a
site visitor surfed away from your site. If the damage would be like cutting off
your left hand, you probably don’t want to include AdSense on your site.
If, on the other hand (the right hand because it’s not been cut off yet),
the possibility of a site visitor surfing away wouldn’t cost you any money,
AdSense is probably worth considering. To be clear, a certain percentage of
site visitors click an ad on a site and then don’t come back, either that day or
at all. But that percentage is likely to be very small. If you won’t lose money if
they don’t come back, why not try to make a little money?
Jenn Savedge, the owner of the blog The Green Parent (www.thegreenparent.
com), doesn’t use AdSense. She says, “I want to have complete control over the
products that are advertised on my site. I don’t want it to appear as though I am
endorsing products when I am not.” And that’s a valid reason to decide against
using AdSense.
A good rule of thumb is generally that all content-only sites can afford to
have AdSense ads displayed on some, if not all, pages on the site. Sites that
sell stuff? Well, that’s a little trickier, but if you have pages that don’t contain
links to purchase products (like product review pages, or articles that extol
the value of a particular product or group of products), you can probably feel
pretty secure about including AdSense ads on those pages.

Common AdSense Questions

If you’ve read to this point, you know just enough to be dangerous, which
means you probably have a ton of questions about AdSense. Other chapters
answer most of those questions for you, but to keep you focused, I answer a
few of the more pressing questions now.
What follows are answers to a few of the more common questions that are
usually asked about AdSense (which incidentally are probably the ones that
you want the answers to the most).
How much money can I
make with AdSense?
There’s just no easy answer to this question. Well, okay, there’s an easy
answer — it depends. But that easy answer isn’t really useful. The problem
is that several measurements impact your daily revenue from AdSense ads,
such as
Unique visits: A visitor is considered unique when she visits your Web
site the first time during a given period of time. Depending on the
metric — the measurement used to track visitors on your Web site —
that’s used, a visitor might be considered unique the first time he visits
your site in a 24-hour period, the first time in a week, or the first time
in an hour. For AdSense, the unique visits measurement is used to help
determine the click-thru rate for ads.
Click-thru rate (CTR) is the number of people who click an ad and are
taken to the Web page designated for the advertisement. This page is
usually a larger, more colorful ad, the opening page of a Web site, or a
page that displays more information about the product or service featured
in the ad.
Average click-through-rate (CTR): The CTR is the actual number of
visitors who click through an ad on your Web site. This is important
because you’re paid when users click your AdSense ads.
Average cost-per-click (CPC): The CPC is the amount that advertisers
pay each time someone clicks one of their ads. This number varies
widely and is dependent upon the cost of the keyword to which an ad is
related. For you, as an AdSense publisher, the CPC is the basis for how
much you’re paid.
Using these three measurements — measurements which are highly
variable — you can estimate how much you could make based on some
hypothetical numbers. For example, assume that your Web site gets 1,000
unique visits per day and that the average value of the ads that are displayed
on your site each day is $.25 per click (that’s the CPC). Finally, assume that
about 2 percent of your 1,000 visitors click through the ads on your site each
day. Now, you have numbers that you can work with.
With those hypothetical numbers in place, you can use this equation to estimate
how much you might make from your AdSense ads on a given day:
(unique visits x average CTR)average CPC = potential revenue
so
(1,000 x .02)$.25 = $5.00
Using that equation and the hypothetical numbers I’ve defined, you could
estimate that you’d make $5.00 per day, or $150.00 per month. Again, however,
that’s assuming your numbers are exactly what I’ve defined here, and
they probably won’t be — these are completely fictional numbers used solely
for the purpose of example.
Any change in those numbers — more or less visitors, higher or lower CTR,
or more or less average CPC — results in different numbers.
I can hear you wailing in frustration — “So what can I realistically expect
to earn with AdSense?” I understand your desire for solid numbers, but the
truth is, I can’t give you an exact figure. More accurately, I can tell you that if
your site is well-targeted and has high traffic levels, you can expect to make
pretty good money (at least enough to get a check every month). And if your
site traffic is slower or your site isn’t as highly targeted, you might be lucky
to make enough to pay for your Web site hosting each month.
In an effort to keep costs down, Google doesn’t release payments until you’ve
earned $100 or more in ad revenues. If you make less than $100 in a given
month, your earnings will be held until you reach the $100 minimum. So, if
you’re not making enough money, you’ll get your payment eventually, just not
right away.
Fortunately, there are ways to optimize your Web pages so that you get the
most possible return on your AdSense ads. I cover those strategies throughout
the rest of this book.
How much does AdSense cost?
Easy question, easier answer. AdSense doesn’t cost you a thing. Well, it doesn’t
cost you a thing unless you consider the time that it takes to implement the
ads on your Web site. But even this step isn’t overly time-consuming, so even
labor costs should be minimal.
What kind of ads will show
on my Web site?
The advertising kind.
Okay. All jokes aside, the ads that show on your site are determined by the
content of your site. Google uses a search algorithm to determine what ads
are best suited for your site — an algorithm that’s quite similar to the one
Google uses when you run a search query from the Google search pages or
through a Web site-based search box.
That said, it’s possible that the ads that show on your site might have nothing
at all to do with the content of the site. Here’s why: If your site content
isn’t very focused, the algorithm gets confused and isn’t sure which ads are
appropriate. So, it makes its best guess, which may or may not be correct.
The best way to ensure that the ads are highly relevant to your content is to
have well-focused, keyword-rich content. You can find guidelines for putting
together the best content for your site in Chapter 3.
Can I control ad content?
No one wants ads from their competitors on their Web site. Even if you’re not
selling anything from your site, it’s likely that some ads you just don’t want
shown on your site.
Fortunately, Google’s made it possible to exclude some companies from
showing their ads on your site. It’s not too difficult to do; simply ad your
competitors’ URLs (Uniform Resource Locator, the Web address) to your ad
filters, and the competition is then blocked from advertising on your site.
You can find more information on filtering the ads that are shown on your
site in Chapter 5.
Can I use AdSense on more
than one Web site?
Sure you can, and here are a couple ways to do it. First, you can use the same
AdSense code on all your sites, and the metrics — the tracking measurements,
like number of clicks and payment for clicks — are all collected in the
same report with no way to differentiate the Web site.
The other way you can track multiple sites (or even different pages within
the same site) is to use Google channels. Channels simply allow you to track
different sites or pages on a site by using code that’s written to indicate each
separate channel you set up.
You can set up channels by URL or by custom-defined differentiators. You
can find out about the fine art of using channels effectively in Chapter 14.
Can I have more than one
AdSense account?
Having more than one account might seem like a good idea in certain situations.
For example, if you run multiple Web sites, you might want to have a
different AdSense account for each of those sites.
Google doesn’t think that’s such a great idea.
You’re limited to a single AdSense account per payee. You can differentiate
between ads on your various Web sites with the channels that I mention earlier
in the preceding section, but having two accounts is a no-no.
Google’s very sensitive about the ways in which publishers use AdSense capabilities.
Reading through the AdSense program policies before you even being
to set AdSense up for your Web site is a very good idea. Google won’t think
twice about banning policy violators from using AdSense.

The Potential of AdSense

Okay, AdSense seems relatively simple, so what’s all the fuss about? Well, the
easy answer to that is money. Publishers use AdSense because it’s a potential
revenue stream that might not otherwise be available to them.
In some rare cases, you may have heard of AdSense publishers making
$20,000 or more each month. Those are rare cases, but it’s possible to build
a decent revenue stream with AdSense if you manage the use of the ads carefully
on sites that are very well designed. Is it likely that you’ll get rich? No.
What is likely is that you might be able to make enough to cover your Web
site hosting or even enough to cover your mortgage. AdSense definitely has
the potential. How you manage the program combined with how well your
site is designed and the amount of traffic that your site receives determine
how much you make.
In the coming pages, you can find out about all the tips and secrets that will
help you maximize the potential of AdSense for your Web site. It all starts in
Chapter 2, where I walk you through how to sign up for an AdSense account
and get it set up on your site, so keep reading. Plenty more information is to
come.