Working Out How Much Adsense Income A Keyword Phrase Can Earn for You

Monthly Adsense Earning Potential Choosing the right keyword phrases for your websites is the key to maximising your success with auto blogging. In my Advanced Autoblogging Blueprint I give you some guidelines for keyword selection (see page 6). In this post I want to show you some insight into how I came up with these guidelines.

Choosing keyword phrases to use is about picking ones with good Adsense earning potential and relatively low competition. For now I want to concentrate on the earning potential of a keyword phrase (we will leave competition analysis for another post).

So how do we work out how much a keyword phrase can earn from Adsense? To do this we need to consider 4 factors. The 4 factors are:

  1. The monthly search volume for the keyword phrase.
  2. The percentage of searchers we expect to go to our website if we have a number one ranking for the keyword phrase.
  3. The  percentage of those visitors to our website we expect to click on one of the Adsense ads on the site.
  4. The amount of money we expect Google to pay us for each click on an Adsense ad.

Okay, lets look at how we combine these factors together to work out the Adsense earning potential.

We use the Google Adwords Keyword Tool to get the Global Monthly Searches and the Estimated Avg. CPC (estimated average cost per click) figures for your keyword phrase. For example, for the phrase “hand held gps” the Global Monthly Searches is 5,400 and the Avg. CPC is $1.90.

Now I am going to estimate that if one of our websites has the number 1 ranking for a search for “hand held gps”, then 40% of the searchers will click through to our website.

Therefore the number of monthly visitors to our site will be:

5,400 x 0.40 =2,160

Next I am going to assume that 5% of those visitors will click on one of the Adsense ads on the website:

2,160 x 0.05 = 108

Now I am going to estimate that Google will pay us 25% of the average cost per click amount for every click on an Adsense ad. So to complete the earning potential calculation we multiply the number of Adsense clicks from above (108) by the Avg. CPC amount ($1.90) by 25%:

108 x $1.90 x 0.25 = $51.30

Therefore the estimated monthly Adsense earning potential for the keyword phrase “hand held gps” is $51.30.

To summarise, the formula is:

Monthly Adsense Earning Potential = Searches x 0.4 x 0.05 x CPC x 0.25

This can be simplified as:

 Monthly Adsense Earning Potential = Searches x CPC x 0.005

Now it should be obvious that this formula is an estimate, as a number of assumptions have been made. We won’t earn exactly $51.30 per month from the keyword phrase “hand held gps” once our website reaches the number 1 ranking for searches for that phrase. We may earn more, we may earn less.

The value of  this formula is that it allows us to compare the value of one keyword phrase to another, and then choose the one with the most potential to earn money.

When assessing keywords I like to see an Adsense earning potential of at least $10 per month or more. Anything less than $10 isn’t really worth the effort.

The other point is that this earnings estimate is only half of the equation. What if the competition is too strong for us to rank number 1 for “hand held gps”? Stay tuned for a post on competition analysis.

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January 25, 2011|Comments (0)
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