Why Are Google’s Average Cost Per Click Values Wrong?
Up until recently it had bugged me why the average amount I was earning per click on some of my sites was nowhere near the average cost per click reported by the Google Adwords Keyword Tool – even allowing for the fact that Google only pays approx 60% of the click cost to the Adsense publisher.
For example, one of my sites was earning $0.25 per click when the Google keyword tool reported an average cost per click (CPC) of $1.50!
The reasons for this became clear after I laid my hands on a report called “The Adsense Revelation“. Now I was kicking myself, because some of the stuff in this report I should have realised.
For example, the Google Adwords Keyword Tool reports the average cpc when advertising on SEARCH RESULTS. However, the money we get from Adsense comes from advertisers using the CONTENT NETWORK. Now the search results and the content network are two completely different things, and generally advertisers nominate to pay LESS for a click from the content network than they do for a click from the search results.
This is because clicks from from the search results are more qualified – after all, a searcher is actively looking for something whereas a click from the content network is most likely from someone just browsing around different sites.
So is there any way to get the average CPC of clicks from the content network? In fact there is – Google has something called the “Contextual Targeting Tool”. To find it you need a free Google Adwords account. Login at http://adwords.google.com, select “Reporting and Tools” from the menu, then select “Contextual Targeting Tool”.
It gets interesting when you compare average CPCs from the Adwords Keyword Tool and the Contextual Targeting tool. Here is an extreme example:
mesothelioma – Adwords Keyword Tool: $87.59, Contextual Targeting Tool: $2.95
WOW!!! If I am running Adwords ads on the search results for “mesothelioma” I would pay about $80 per click. But if I have Adsense ads on my website about “mesothelioma” I only earn about $2 per click!!!
This would make me think twice before paying for a list of high CPC keywords – the CPCs most likely come from the Adwords Keyword Tool and therefore are nowhere near what you will actually get from Adsense.
Here’s another example:
natural cellulite removal – Adwords Keyword Tool: $4.15, Contextual Targeting Tool: $1.25
Not as extreme a difference, but significant nonetheless.
The biggest takeaway I got from the “Adsense Revelation” report was, however, that sometimes keywords can pay MORE per click on the contextual network than what the Adwords Keyword Tool reports. Check out these examples:
cottage cheese cellulite – Adwords Keyword Tool: $0.09, Contextual Targeting Tool: $1.81
cellulite removal naturally – Adwords Keyword Tool: $0.09, Contextual Targeting Tool: $1.24
Why is this significant? Because most people creating sites for adsense would pick “natural cellulite removal” rather than “cellulite removal naturally” as a target phrase, as the Adwords Keyword Tool is telling them that the CPC is alot higher.
So how do we use this to our advantage? First of all, don’t discount keyword phrases that have good search volume, but low CPC values as reported by the Adwords Keyword Tool.
Check the phrase in the Contextual Targeting Tool and you may be pleasantly suprised to find out that CPC is actually much higher, and therefore worth using on a site. The other bonus of this approach is that 99% of everyone else won’t bother doing this, and therefore your competition for keyword phrases like this will be much, much lower.
If you want to find out more about what I have discussed in this post see “The Adsense Revelation“.