Tuesday, March 14, 2006

IMP x CTR x EPC = $

Catchy headline, eh! What does it mean? What's it all about?

Last one first. I'm talking about Google AdSense. This program displays "contextual" adverts that you can insert on any content-rich website (i.e. an info site rather than a selling site). The ads which are displayed are supposed to be related (it isn't 100% accurate) to the content of the page. If / when it works, the chances of a website visitor clicking through to the ad are much better than a blatent banner ad.

Banner ads aren't really effective. The "468 x 60" format is tired. We all suffer from "banner blindness"; we ignore them. The Click Through Rate ("CTR" - remember this acronym) is usually less than 1 per cent. A lot less. Because they are indiscriminate. Usually, they don't relate to the content of the page. So, apart from "banner blindness", our visitors have no reason to be interested in the ad.

Let's face it, if you bought a magazine devoted to "ice skating", would you be interested in the slightest in adverts for "baby care" products? I don't think so!

"Contextual ads", where the content of the ads is related to the content of the web page, is far more powerful. And that's what the Google AdSense system does. It allows any webmaster (or webmistress) with a content-filled website to use its contextual ads on their pages.
You might have noticed lately a spate of new products aimed at building a mass of content-filled websites very quickly. The reason? To generate income from AdSense. OK, back to that mysterious formula:

IMP x CTR x EPC = $

Just how successful you'll be in generating income from your AdSense websites depends on these three factors:

IMP = Page Impressions
That's the number of times that your pages are viewed. So, the more visitors you drive to your site, the higher your AdSense income is likely to be. This is one of the factors which is under your control.

CTR = Click Through Rate
That's the percentage of visitors who click on the AdSense ads. That's a crucial factor in increasing your AdSense income. Again, it's something over which you have some measure of control.

EPC = Earnings Per Click
That's really dependent on the subject matter of your web pages and how many advertisers are competing with each other. Your EPC is likely to be lower on a page about, say, philosophy, than on a page about marketing.

I decided to write about this topic today because a year ago I made a small but very significant change to my AdSense ads. I've charted the impact it made on this web page. Powerful stuff, eh?

The turning point was a report that I bought - "AdSense Secrets" by Joel Comm. I've read a lot of reports about AdSense but Joel really lives up to his reputation as "Mr AdSense". He lives and breathes it! What impresses me even more is that Joel updates his report regularly, and he's just issued version 3.


If you use, or are planning to use, AdSense on your website, you really ought to get Joel's report. But if you do, not only must you read it, but you should act on it. You've seen the difference that just one of Joel's tips made to my income.

(From my Marketing Magic "News Update" newsletter)

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