2 separate questions regarding how to figure out advertising revenue (meaning specifically what formulae to use):
FIRST: Assuming my site received 1 million page views per month, and assuming there’s a 0.5% “conversion rate” (meaning page viewers who will actually click on one of the adsense ads) and assuming that each click is worth say 25 cents:
1 million views x .005 clicks/views x $0.25 cents/click = $1250/month
BUT then, should I also multiply by 4 (number of google adsense ads per page)? And then should I multiply by the number of pages that show the adsense ads?
SECOND: What is the formula for figuring out revenue from CPM banner ads?
Say 1 million views x $3 avg. CPM = $3000 - but that’s just per ad, right? If I have say 2 banner ads with the same CPM located at different spots on the same page, then the total revenue would be $6000, right? How about if I have “rotating” ads meaning that the banner displays multiple ads in a row during a single page view, depending on the length of time that the visitor stays on the page - how to account for that in the formula, if that is possible?
I know that many will quibble with the numbers, but for now I am just interested in figuring out the correct formulas first so lets try to stick to that please. If the formulas are correct, it makes much more sense for a web publisher to concentrate on increasing banner ad revenue than adsense revenue.
But just FYI as far as the numbers go, I got the avg. $3 CPM for banner ads figure for ad networks, and the .05% avg. conversion rate figure for google adsense ads from various discussion groups.
Yes, yes, I know each site is different and the viewers have different habits/practices and these averages are probably just BS.
Just FYI my site is going to be about gadget & personal technology - better than Gizmodo, more like T3 and Stuff. I have read about ridiculous figures like AdRelevance Sample Rate Card showing $50 CPM for tech sites but I think that’s BS especially nowdays though the recent news says ad revenue on the web is on upswing . . .
EXTRA CREDIT QUESTION: I am still trying to figure out additional potentials sources of revenue & would appreciate your comments on them:
- Amazon feeds (reliable affiliate but I don’t like the fact that user would eventually go to the Amazon site - and why wouldn’t he just go there first anyway?)
- Co-branded comparative shopping engine - like it but Bizrate doesn’t offer affiliate program anymore. Pricegrabber?
- PPC search engine acting as a “catalog” of goods - haven’t quite figured out this biz model yet.
Your responses will count for 100% of your final grade in this class (wink wink)