How to Make Money with Google AdSense

The second approach is to build pages, and sites, for the primary purpose of generating AdSense income. In this case it is worth considering the factors affecting AdSense profitability.

Optimizing Returns

Traffic volume. The more visitors your site attracts, the more clicks (and revenue) it will create.
Traffic quality. The more targeted your visitors are, ie the more they have a genuine interest in your subject matter, the more likely they are to click on your AdSense ads. The proportion of targeted visitors can be improved by choice of marketing strategy (how and where you market your site), and the choice of keywords your page targets (keywords should be relevant and specific).
Site effectiveness in getting clicks. This is influenced by the quality and relevance of your content, and slickness of design. On the Web you have only a few seconds to hold a visitor's content before they click away; garish colors, flashing lights and gratuitous, slow-loading, Flash intros are the quickest way to get visitors hitting the "Back" button. It should also be possible to anticipate the kind of ads you pages are attracting (or this will become clear once your AdSense campaign is running). Some fine-tuning of copy may then be employed to subtly encourage "the click". Note that AdSense conditions prohibit overt requests to visitors to click on ads.
Keyword value. As explained above, not all keywords are of equal value. Some keywords pay as low as 10 cents a click, while some are worth up to $20. Obviously, you need far fewer clicks on high value keyword ads. Lists of the highest paying keywords are freely available for sale and some Webmasters create pages and sites simply to attract these ads. In this author's opinion keyword value is an important consideration, but quality of content (which often comes from familiarity with and interest in subject matter) should not be compromised solely to increase return per click. Poor quality, unfocused and uninformative pages are not likely to get many clicks.

Google offers its AdSense members a variety of reports analysing their ad performance. AdSense ads may be assigned to a channel, or may be monitored by URL. A Webmaster may use a combination of approaches. For each channel or URL AdSense reports show the number of impressions, number and percentage of clicks, revenue per 1000 impressions, and total revenue.

AdSense ads are available in a range of sizes, shapes and color schemes. Experiment to see which work best for your particular site. This author's early experiments seem to indicate that ads that blend with the site are more effective than those that look visually distinctive.

URL filtering was originally introduced by Google to allow Webmaster’s to filter out ads for direct competitors to their own site. It is, however, being increasingly used by astute AdSense operators to filter out poorly performing, or poorly paying ads. If you are planning to use URL filtering in this manner be prepared to experiment and closely monitor results through Google’s reporting facilities.

AdSense for Search and Link units

Two variants to AdSense ads are AdSense for Search and Link units.

AdSense for Search allows Webmasters to place a Google search box on their own pages. This search box uses Google either to search the Webmaster’s site, or the Web as a whole. When visitors perform searches in this manner the results include PPC ads, for which the Webmaster receives revenue from any clicks. In addition to generating revenue, a local search facility is a valuable addition to any site of more than a few pages in length.

Link units are hypertext keywords that, when clicked, take the visitor to a page of relevant PPC ads, that produce revenue for the referring Webmaster. Link units display four or five keywords relevant to the content of the containing page/site. Google’s most recent addition to the Link unit stable is a horizontal format Link unit bar that takes up very little screen real estate, but can provide visitors with a wide range of targeted, revenue-producing ads.

While AdWords and AdSense have proved highly successful marketing schemes, the PPC model does face a threat from fraudulent clicks. AdSense conditions prohibit Webmasters clicking on their own ads. Getting friends or colleagues to visit and click is also to be discouraged since Google analyses where clicks originate. A more recent trend has been for advertiser's competitors to click on their ads to drive up their advertising costs. Let us hope that some way is found to combat this practice.

AdSense Math

Let
V = Visitors
Qv = Visitor Quality (how targeted & motivated they are)
Qs = Site Quality (effectiveness of site in getting desired visitor response)

S = Supply (number of competitior sites - for given key term)
D = Demand (number of searches made for given key term)

P = Position in SE results
PR = Google Page Rank

AKv = Ad-Keyword Value (amount earned from displaying given ad for given key term)
R = Revenue

P = f(S, PR)

V = f(D, P) (= kDe^-cP k, c const.)

R = f(V, Qv, Qs, AKv)

To increase revenue:

Increase Visitors
- Increase position in search engines
  - Search Engine Optimization
  - Increase Page Rank
- Increase keyword demand
Increase Visitor Quality
Increase Visitor Conversion
Increase Ad-Keyword Value