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
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.
Got something to add? Send me email.
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© 2009-11-07 Tony Lawrence