AdMoolah News and Views

Getting high paying clicks is something every AdSense publisher wants. The more a click on an ad earns, the easier it is to make money. This tip will walk through the process of what determines the amount a publisher will receive for a click.

Where the Money Comes From

The AdSense system relies on two groups of people: 1) Publishers, who show ads on their site and receive money every time someone clicks on an ad, and 2) Advertisers, who create ads and pay money every time one of their ads is clicked. Advertisers are the most important part of the Google advertising economy. Without advertisers there would be no money. Since Google makes almost all of their earnings from advertisers, they need to make sure the advertisers are happy.

Google has a program called AdWords that advertisers sign up for. AdWords allows advertisers to create ads and then bid anywhere from $0.05 to $100.00 on keywords associated with the ad. When it comes to showing an ad, Google uses three factors to determine which ads have the best earnings potential: the advertisers maximum bid for the ad, the click-through rate for the ad, and the relevancy of the ad text. All three of these factors help publishers earn more money. The higher the bid price, the more the publisher will make; better click-through rates mean more visitors will click on the ad; and better ad relevancy will mean that visitors will be interested in the ads and click on them more often.

Earning per Click

The amount a publisher gets paid for each click is difficult to determine. Since the bid amounts that an advertiser submits are just maximum bids, it means that the price of the click is usually somewhat less than the bid amount. Since the current maximum bid for any particular keyword is driven by the market, it tends to vary quite a bit from day to day and month to month.

Google has also introduced something called Smart Pricing which can reduce the price of a click. When advertisers get clicks on the ads they have placed, they expect a certain percentage of the clicks to result in an action such as buying an item or signing up for a newsletter. Advertisers are not happy when clicks do not result in the action they were hoping for, so Google sometimes gives a discount to the advertiser in certain conditions. Smart Pricing attempts to use factors such as which keyword triggered the ad and the type of site to determine which clicks would result in sub-optimal results.

As an example, if an advertiser is selling MP3 players, clicks from an MP3 player review site might result in 10% of the people from the site buying an MP3 player, while clicks from a personal blog would result in only 5% of the people actually purchasing a player. Google might attempt to compensate for this difference by reducing the price of the clicks from the personal blog. The amount that the price is reduced by is only known by Google, so it makes determining an exact click price very difficult.

Another piece of the formula that Google does not reveal is what amount of the click price is given to the publisher and what amount it keeps for itself. It seems to be in the general neighborhood of 50%, but no one except Google knows for sure.

What’s Next

With all of these variables going into determining the the amount a publisher is paid for each click, none of which is in direct control of the publisher, it can be frustrating. In the next tip, I will look at ways publishers can influence the amount they get paid per click.