Google AdSense: Road to Wealth?

This is Part III and the final part of our Research Report on Google AdSense as a wealth creation strategy, focusing on a plan to generate serious wealth using Google AdSense. To read Part I, please click here. Part II may be found here.

In Part II, we already discussed some of the income potential and pitfalls in using Google AdSense as a wealth creation strategy. This part expands on those specific concepts.

Sections

A Business Person should always be wary
Traffic, Traffic & Pages
It is sending me some money - but not nearly enough!
Checklist for Success with Google AdSense
Tools
Resources

A Business Person should always be wary

Google AdSense is one advertising broker. It is the largest and most credible of all, and yet it is only one. A smart business person knows that relying on one thing only is asking for trouble. Relying on one client, on one marketing medium, on one business strategy, on one product - all make for a rather dicey business plan.

If you are making a plan to monetize your website through advertising, consider yourself to be in the web-publishing business and plan accordingly. Do not build a plan around Google AdSense alone - instead take into consideration what some of the other brokers such as Yahoo! Publication Network and Burst Media are looking for. Also, consider alternate means of site monetization such as affiliateships, co-registrations, page sponsorships and so on (you can get more details in Part I of the plan).

Furthermore, you might be even better off if advertising acts as a supplemental income to your overall online business plans. In other words, develop a plan to perhaps develop useful back-end products - such as software & e-books, or use your website to support your books or other products- which will be your main income stream, and advertising can then provide the extra cushion needed to help your main task roll forward.

The underlying statement here is to not develop your plans only around Google AdSense.

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Traffic, Traffic & Pages

Earning substantial income through AdSense (or other earnings/click model advertisements) gets severely restricted by two factors:

eCPC - earnings per click - that is the amount that you, as the publisher, will earn for every click on an advertisement on your site. This amount varies from $0.01 to $1 (with some publishers claiming $20 clicks, but those, if true, are way out of the normal range). Assume an average of about $0.03/click earnings for your site - just to be conservative.

CTR - Click Through Rate - that is the number of visitors to a given page who actually click on an advertisement. Take this number to be about 1% for your site.

Combining the above implies an earning of $0.0003/page/visitor. 1000 visitors to a page in a given month will yield $0.30 for that page for that month.

If your website had only that 1 page, and you managed to generate 1000 visitors, your sum total would be that paltry amount. To do better, you can either increase traffic, or increase the number of pages on your site.

Increasing pages does not naturally guarantee an increase in earnings if your total number of visitors remains at 1000 who do not visit more than one page. You have to hope that increasing pages increases traffic proportionately (even if not linearly).

Let us say you now have 1000 pages on your website, and get 10,000 unique visitors (10/page). Your earnings will now rise to: 10 X 0.01 X $0.03 X 1000 = $3/month.

On the other hand, if you maintained your visitor frequency/page at 1000, your total number of visitors would now hit 1,000,000/month, and your earnings would be $300/month. All this assuming that each visitor visits only 1 page on your site.

Fortunately, as the traffic increases, the number of repeat visitors goes up dramatically, and your earnings start to climb quickly as well towards the $1000/month mark. And testing/experimenting at this stage with channels, ad- locations and so on start driving conversion rates up, and even begins pushing your eCPC a bit higher, delivering the $3000-$4000/month earnings.

But this highly simplified illustration shows the kind of traffic and site one is talking about when seeking to earn some high quality income from your website using this earnings per click model of advertising.

This is one of the reasons why this form of advertising is best dealt with as supplemental to your main business plan as opposed to making this as your central engine of growth.

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It is sending me some money - but not nearly enough!

Once you have established a steady stream of income with Google AdSense, you will realize that an extra income of $12,000 - $60,000/year is nothing to sneeze at, but hardly what you would call as earth shaking.

The best use of this income is to parlay it into other business activities - such as asset builders such as real-estate (tax liens, rentals, foreclosures), taxi medallions (owning license to operate cabs in large cities) or into income generating operations (writing a book, acting as eBay retailer) which can, through leverage, multiply your income stream manifold. You could of course, seek to further increase your portfolio of sites that generate income through web-advertising, though that would not be our first choice to dedicate your time/energy and resources. Building a mini-conglomerate of income generating assets (products, businesses) is a far more rewarding strategy - though you must plan according to your interests.

Here is a quick checklist for you to get started with Google AdSense.

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Checklist for Success with Google AdSense

Choose a topic for your web-site
Determine your site keywords
Prepare 50 articles (500-750 words long at least) with the right use of the keywords in headlines and in text. Add links to popular sites using the keywords.
Choose web-hosting service with good server log information. Use web-site operation software if needed (like membergate).
Upload articles and go live.
Determine new article publishing frequency and stick to it (minimum of two articles per week).
Get site name into multiple directories to initiate Search Engine indexing of your site.
Put out a few press releases to get your site links from popular sites.
Sign-up with Google AdSense
Set up AdSense on your site according to the best practices.
Set up Channels to track your AdUnits
Join webmasterworld.com and be active on the AdSense forums.
Once traffic builds up, test with variations of AdUnits
Continue article additions, and initiate a linking campaign to get more links to your site.
Maintain pace for 1+ year and you will see substantial traffic and some AdSense income. Tweak, test and add articles till AdSense reaches at least $1000/month!

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Tools

Google's own website provides good tools for tracking your earnings on a daily, weekly and monthly basis. The information on channels helps you track down which AdUnits are performing well and overall aids in testing variations.

If however, you need a more precise tracking script, the folks at eggheadcafe.com have provided some help on this front along with instructions. You can find this information by clicking here.

If you are seeking to track earnings through multiple streams with one tool, the revenue monitor may help.

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Resources

Nice website showing how earnings grow over time with AdSense.
Laying out a real business plan from entrepreneur.com.

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We hope you enjoyed this part of the Report. Please send us feedback at shri_ajay@characterandwealth.com on what you liked or disliked about this report or post on the forums!