AdSense is a Google affiliate program that allows you to make money when a visitor clicks on ads that Google places on your website. The ads don't cost you anything, and Google will pay you a portion of the cost per click each time someone clicks on one of your ads.
Each click may only pay a small amount — like 25 cents, for example — but if you have enough impressions, or page views, these small amounts can add up. In order to understand how to make money with Google AdSense, you must understand several terms.
The click-through rate is the number of times that visitors click on AdSense ads displayed on your website divided by the number of page views. As an example, suppose you have three AdSense ads on a page of your website. Three ad impressions will be created each time Google shows this page to a visitor. If you get five clicks out of 500 impressions, your CTR will be 1%.
Cost per click is the price that advertisers pay for a specific keyword when a visitor clicks on one of their ads on your website. The cost per click is a price determined by bidding from advertisers for each keyword. Google pays you a percentage of this CPC.
Revenue per 1,000 impressions, or RPM, is the earnings per each 1,000 times that Google displays an ad on your website. The formula is: RPM = (estimated earnings/number of page views) * 1,000. As a basis for reference, RPMs can range from around $5 for broad niches to $100 or more for niches with high CPCs.
A common goal that most people have for AdSense is to make $100 per day. The formula for calculating AdSense revenue is as follows: CPC x CTR x number of page views/day = revenue/day.
Consider this example. If your CPC is 50 cents and you're getting a 2% CTR, then you would need 10,000 page views per day to receive $100 in revenue.
The way to make money with Google AdSense is to convince Google to send a lot of web traffic to your website and insert ads that have high CPCs and will receive a high-percentage CTR.
Increase the click-through rate by testing different ad placements to find the position that produces the most clicks. The ad should be placed where visitors will see it as soon as they land on your page. However, the page should have a balance between content and ads so the ads don't overwhelm the page and annoy the visitor. Generally, a good start is to put one long rectangular ad on the right side of the page.
Use keywords with the highest CPCs for which you can still rank. Every niche market has high-paying keywords for which you will probably not be able to rank because the competition is too strong. Instead, search for long-tail keywords, those with four or more words – they may have lower CPCs, but you will be better able to rank in Google and get more impressions for your website.
Add more content. Google is always looking for sites that provide the best value to the visitor. You should be constantly adding new content with related keywords that satisfy the visitor's interest. Google likes websites that have a continuous flow of updated, fresh content.
Check your results every day with Google Analytics as you make changes to the ads and your websites. Constantly test different types of ads and placements. Track your results with a form of A/ B testing to determine which methods are working and which are not. Use the data from Google Analytics to determine which pages of your websites are getting the most impressions and focus on improving their performance.
The Google affiliate network for AdSense ads is an excellent way to earn passive income from your website or blog. If you follow these methods to improve your click-through rate with high-paying keywords, you can earn a comfortable passive income.