Overcoming Adsense Earnings Fluctuation

If you track your AdSense performance, you may notice that AdSense revenue can suddently go down, with no apparent reason.

Analyzing Adsense data and working out why this has happened can be challenging for both new and experienced publishers.

To help you understand the reason this can happen, and what you can do about it, lets first look at how Adsense revenue is calculated.

Your total revenue is reported in your Adsense account as:

• Page Impressions - the number of times your page containing ad unit was served
• CTR - Click Through Rate
• eCPM - Current average earnings per thousand impressions
• Total Revenue

Revenue = Page Impressions * eCPM / 1000

Hence, if you serve 10,000 page impressions and earn $55, your eCPM is $5.50. You can then expect to earn $165 is you increase your page impressions to 30,000.

Most AdSense ads pay on a cost-per-click (CPC) basis, so eCPM measures your average ad performance. To get a more accurate measure of performance use:

Revenue = Page Impressions * CTR *Average CPC

You can now predict how much revenue you will likely earn for a given amount of page views, and analyze revenue by placement-targeted ads versus contextually-targeted ads.

Total Revenue = Revenue (contextual) + Revenue (placement-targeted)

Contextually targeted pay per click.

Placement-targeted ads are paid by impression (CPM) or by click (CPC).

Revenue = (Page Impressions (contextual) * CTR * average CPC) + (Page Impressions (placement-targeted) * eCPM (placement targeted) / 1000)

Revenue = (Page Impressions (contextual) * CTR * average CPC ) + Revenue (placement-targeted)

Diagnosing Revenue Fluctuations

Follow these steps:

Check whether page impressions or eCPM changed - using Advanced Reports

If AdSense page impressions has dropped - check if traffic to your entire site is also declining - using Google Analytics

Check your pages for unpaid public service ads (PSAs).

If your eCPM is down - check if contextual or placement targeted ad performance has dropped - Advanced Reports.

• Contextual Ads - Check metrics CTR and average CPC [calculated] .
• Placement-targeted ads - analyze total placement-targeted revenue and the average eCPM. Changes in either of metric usually indicates advertisers are beginning or ending campaigns targeted to your site.

Remedial Action

Page Impressions

Check for AdSense technical issues or public service ads (PSAs). Use Webmaster Tools to make sure that Google is properly crawling and indexing your site.

Consider the promotions you have running for your site. Did an ad campaign end, causing a drop in traffic? Has a popular site linked to you, causing a spike in page impressions?

CTR Changes

A drop in CTR can be caused by:

A poorly optimised user interface or poor targeting. Try section targeting.

Crawl problems

Changes in ad servers - check for targeting problems.

Changes in the look and feel of your site

Ad blindness; indicated by slow decline in CTR - Try testing new ad formats, placements, or colors.

CPC Changes

CPC is determined by advertiser bids and not directly under publisher control. Most large CPC changes are:

Seasonal - holiday or back-to-school seasons

Advertisers begin and end their advertising campaigns.

Improve CPCs by choosing ad formats that support all ad types: text, image, video, flash, and gadget ads. More competition means higher advertiser bids.

Placement Targeting Revenue Changes

Check average placement-targeted revenue for the past few months to see if changes are part of a trend or a short-term earnings fluctuation.

Spikes in placement-targeted revenue can occur when advertisers run limited-time campaigns.

Increase placement targeting over the long term by setting up ad placements, making it easier for advertisers to find and target your site.

Multi-Site Publishers

Many AdSense publishers run multiple websites. These publishers typically use section monitoring. Check you section URL and Custom 'channels' for any major changes.

Use year on year patterns to detect seasonal fluctuation in each of the above metrics. [ eCPM, revenue, or page impressions].

Adding new sites that are getting high page impressions but low click throughs unfortunately drags down the performance on all your sites. Google, rather unfairly, works on an account basis, not a site basis. In some cases, it is worth delaying placing ads on your new sites until they have good traffic. Test ad placements for a few months to see how they perform. If you notice the whole account drop, without seasonal influence, try removing the new site and see if the revenue climbs again.

The same effect also occurs when too many ad units are placed on the page. As lower ad groups server lower CPC ads, they may drag down the whole page eCPM. Sometimes your revenue can improve by removing an ad group from lower down the page.

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