2 weeks with AdSense, 38 new visitors, 9 Tweets, 2 Likes, 4 Followers and $4 in revenue is enough to demand a thoughtful blog post on the wonderful world of online advertisement. If you haven’t already noticed, I have now added Google AdSense to my blog website with the aspiring hopes my incessant, geek-ified ramblings will make me a moderately successful, part-time thousandaire. $4 means I’m in the money!
Google AdSense Is Easy
First if you need a blog post to tell you how to add AdSense, this post is not for you. I will, however, provide you with some great links to other bloggers – Vicky knows what she is doing here. If you are really that lost, watch a YouTube video here.
Get To Know The Lingo
Admittedly this is my first foray into establishing an online business so I consider myself to be an infant blogger, but I do learn very fast when it comes to technology. I guess being a millennial has its perks every now and then when the older generation isn’t making snide comments with their teeth out. Let’s first learn some lingo that will help us talk like we know what we are doing and also identify things that will drive our advertising strategy
- Cost Per Click (CPC) – the amount an advertiser “pays to play” per click
- Earnings Per Click (EPC) – the amount you get paid per click
- Click Through Rate (CTR) – the percentage of site visitors that interact with an ad on your website (total ad clicks divided by impressions)
- Cost Per Acquisition – the total new customers gained from advertising divided by the total cost to advertise
- Impressions – when users get served ads (regardless of clicks our bounces away)
- Cost Per Thousand (CPM) – the amount you get paid (regardless of clicks) per 1000 visitors on your website
- A/B Testing – when you conduct a web test (e.g. “this one or that one” test that is usually done simultaneously)
- more exhaustive lists here and here
Engineering A Target Number
A business works off of operating costs plus profit margins and I am no different than any other business. Let’s first create a target number using a break-even analysis:
Break Even = cost of server + cost of domain * (months I’m in business theoretically)
$100 = ($10 + $15) * (4 months)
Now we know that our break even point is $100 over 4 months, let’s take a look at where we stand. Using Google Analytics linked with Google AdSense, we can develop a monetization strategy for the next 4 months.
First we need to know what traffic we have at AML. To date we have had 68 total visits, and 38 of them new visitors! Our new visitors came on the same day we posted our Spotify Streaming code but we also Tweeted using the nifty @Spotify@SpotifyEng tags directing our content toward the company. That glorious day led to the spike seen in the far right on the graph, 164 impressions and at least 2 minutes of average stay duration. Maybe I should follow that post up with another @Spotify one in the future?
Predicting Our AdSense Revenue
So far we are looking pretty good. There have been 3 clicks for the 24 page views equating to a 12.5% CTR. If we were to keep the CTR (which is unlikely), we could use some simple formulas to estimate how many users we need to reach our break even point, as well as, when we will reach our break even point.
Assuming we are only getting paid for 3 clicks, our EPC is 0.73 cents per click (3/$4.11). In order to get $171.42, we will need 1,000 impressions. We have a long way to go. In the future we can purchase our own AdWords while providing great content and smartly using Social Media as our visit generation machines.