TulipTools Internet Business Owners and Online Sellers Community

Quote:You love your website and you want it to thrive. You create content, manage your community, and keep an eye on your AdSense performance. If AdSense revenue is down, you're understandably concerned. If AdSense revenue is up, you're happy, but you want to know why. Revenue fluctuations are obvious enough when they occur, but the root cause isn't equally clear. It can be challenging for both new and experienced publishers alike to analyze their AdSense data and respond effectively to changes.

The goal of this post, and our follow-up later this week, is to help you understand the AdSense revenue model so you can diagnose and treat revenue fluctuations like an experienced MD.

Study up

The first step is knowing how the figures reported in your account (such as eCPM, CTR, and page impressions) interact to describe your total revenue. Think of each number as a variable in the revenue formula for your site. At the highest level, you can calculate revenue by multiplying your page impressions by the effective cost-per-thousand impressions (eCPM) and dividing by 1000.

    Revenue = Page Impressions * eCPM / 1000

    eCPM = Revenue / Page Impressions * 1000

The eCPM metric provides an estimate of how much revenue you can expect to earn for every 1000 page impressions. For example, if you serve 10,000 page impressions and earn $40, your eCPM is $4. If page impressions increase to 30,000, you can predict that you'll earn $120 given the $4 eCPM.