I have been using Google AdSense on one of my websites, Gentoovps.net, for one year now and wanted to answer the question, “Can I Break Even Selling Ads On My Website?” Just to be clear, I did not create the site for monetary purpose. I did not troll for the highest cpc keywords, try to trick users into clicking on ads, or anything else shady. The entire purpose of integrating ads into the site was to offset a small amount of the cost of hosting and domain registration.
Here are some online advertising terms and abbreviations that are needed for the discussion
- Page views – displaying one page to one user (regardless of the number of ads on the page
- Clicks – user interaction with the advertisement
- CTR – click through rate = click / page views (as a percentage)
- CPC – cash per click or revenue for each time a user clicks and ad
- RPM – revenue per thousand impressions (page views)
So here are my data for this past year for a highly focused, linux tutorial website.
- Page views: 12,181
- Clicks: 11
- CPC: $0.58
- RPM: $0.53
The remainder of the needed adsense variables can be calculated from these. Back to the main question though “can I Break Even Selling Ads On My Website?” This year, no. I earned $6.40 over the course of the year.
When Will I Break Even Selling Ads?
This was the next best question. I was most interested in how much revenue could be anticipated from each post. That equation is found here.
This assumes though that older articles are still being viewed (whether being found via search, linked to, or navigated to once found by a user). To test this, I looked at a simple correlation between monthly pageviews and time (as a surrogate for total posts). Here is the scatter plot with a horrible correlation.
Community Engagement Pays Off
What was the difference between the first month and the remainder? Community engagement. In order to build backlinks, promote traffic, and solicit feedback, I was very engaged in promoting the site. The downside of course is that this approach is very time consuming. When I remove the first month, here is how the graph looks.
So the more content you produce, the more page views you receive (as expected).
So … When Will I Break Even Selling Ads?
If domain registration plus annual hosting costs $150 and each post generates $0.15/year based on the above formula, then $150/$0.15 = 1000 posts.
There are a few caveats however. Scaling a website from 40 posts to 1000 posts (or 50 page views per day to 1250 page views per day) may require more resources (which cost more money). Remember also that at no point have you begun to compensate yourself for the time of writing the articles. If each post takes 3 hours, you are looking at a 3000 hour time investment to save $150/year. Right now, at the current US minimum wage ($7.25), that is an investment of $21,750 which would require 41 million page views to offset.
Why Bother with AdSense
The short answer is that you probably don’t need to bother. Consider affiliate programs in addition to (or replacement for adsense). For instance, I have made nearly as much revenue from hostigation’s affiliate program based on two reviews I’ve written, as from advertising. Amazon and newegg have affiliate programs which may make more “sense” than adsense as well.
Other Factors that will Influence Your Ad Revenue
- how competitive are the ads displayed (ie: home refinancing will increase your CPC)?
- how good is your search engine optimization?
- are you linking to your best content?
- can you decrease your bounce rate?
- is the placement of your ads optimized
- are you writing (and linking to) follow ups of your best content
Improving these will increase your page views without forcing you to create new content. In the end though, content is always king.