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Get out the tape measure

It's natural to wonder how you "stack up". No matter what your volume of traffic is, you can't help wondering if you are making as much advertising money as you should. With that in mind, I'd like to offer you a very simple formula that will help you calculate how much money you should be earning:

Advertising Dollars Earned = (Traffic Source * A magic number * Unique visitors)

There it is. Simple, right? So how are you doing?

Oh, right. That "magic number" thing. Umm.. I don't know.

Trouble is, a lot of factors go into that magic number. One part of it is simply what your site is about. If your site talks about expensive things, you might attract and get clicks on a ads that pay very well. If it doesn't, you won't. So one site might do extremely well with 100,000 visitors, and another with a different subject matter might do next to nothing.

Another factor is the source of those visitors. Some sites get most of their traffic from search engines, and some get most either directly or from RSS feeds. In general, traffic from search engines will generate more ad income (but there are exceptions). There are several reasons. For one thing, RSS readers may not even be seeing ads: their reader may not be displaying Javascript generated content, for example. But even if those folks do come right to your site, they still may not be interested in your ads because they came to read something that interests them. A search visitor is more likely to be trying to solve some problem or do research: an ad may give them just what they want, so they are more apt to click on one.

The exception to that might be the type of site where purchases are implied by the visit. For example, let's say you have a site that focuses on all things Disney; it gives advice about travel, eating, rides to avoid with children, whatever. Airline and hotel ads on that site probably work well with non-search visitors because many of them are visiting with an intent to travel.

Of course the volume of traffic is very important. It's very unusual for ad click through rates to rise out of the low single digits. That means that 100,000 visitors might only generate a few thousand ad clicks. As many ads don't carry much payout (as little as a few cents for some ads), the net result can be disappointing. Of course with the right site running the right ads, the picture changes dramatically.

So the "magic number" depends on a lot of other stuff. If you want to know how you do compared against someone else, you are need to be comparing sites with similar factors, and much of the data you'd need about the other site is probably not available to you.

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