I've been asked a few times in the last couple days the key question on Adsense publishers' minds looking at high price keywords. It's the bottom line question: How much will I make from Adsense if I target a word worth $X a click?
The Answer: No one really knows exactly what Google will payout for a given CPC with Adsense. Just because you see top keyword lists with a juicy keyword at $3.45 a click, does that mean you will make all of $3.45? No. Why not? Take a minute to ponder a closer, more accurate look at top keywords bid prices:
a. Key point: the bid prices listed is based on what the advertiser paid in Adwords.
b. Google only "shares" (pays) a percentage of the bid amount to adsense publishers which some say is 55-77%, but who really knows and is subject to vary.
c. Google uses Smart Pricing which, as I understand it, is a formula/algorithm to determine if your site/pages are a good match for the ads and creating a good ROI for the adwords advertiser. Based on things like site relevance, ad CTR, impressions (traffic), and some other factors (nobody really knows what these are - we just make an educated guess, like we do for so many things in SEO!), Google creates a per click amount to pay out to you. So for a $3.45 top $$ keyword, based on 55% "payout" you could possibly expect $1.89, uh, depending.
I'm not the cagey one here. Google is very careful not to reveal their methods and to have a program in place to benefit publishers, but still protect their stock holders' interests, as well as the interests of Adwords Advertisers. In other words, "keep them [the publishers] guessing." Google cannot afford to have their system manipulated so that at the end of the day the Advertisers are unhappy, and Google is left with less profits. That won't keep Adsense Publishers from trying ;^) But be smart about it.
I have heard of people creating top keyword based sites and getting very low cost per clicks back. Sometimes, people get nice paying clicks for several weeks, then Google's smart pricing system kicks in and the $$ drop like a stone. BUT despite all this, the only way to know if what you are doing is working is to test like crazy - get a good stats tracker for Adsense and keep a log of changes you make. Joel Comm called that an "Adsense Journal" in his Adsense e-book - I just use a text file I add to as I go along; someone else may prefer to use Excel or Word.
Relying simply on keywords lists with just bid prices listed does not provide all the factors you need to look at to make more with Adsense. You also need to look at several other factors to create a valuable list of keywords to work on. Your time is valuable at $X per hour, isn't it? You won't be happy after putting hours into research and developing more content to have it sit there.
OK, if a top keyword database provider publishes keyword bids using Google's broad match, the bid prices are going to be off (Cash Keywords doesn't do this). Keyword bid prices can vary quite a bit between Adwords broad, phrase and exact matches. So know what the bid prices are based on in terms of keyword matching to start.
What about popularity? Alot of popular keywords - esp the top 500 lists you see - are full of the lastest fads, TV and Movies names and celebrities, not exactly a good source of top paying keywords. A balance between words that are searched often (assuming that means they are popular) and a good number of clicks per day is the sweet spot to look for. That may mean you target a top keyword for only 67 cents per click, but that's OK. Shoot for quantity (traffic/clicks) and quality (top bid price) in one package. Chances are the best keywords are not sexy or cool, but how better to fly under the competitive radar?
What about clicks per day? A top paying keyword can have a bid price of $23 a click, but if the Google clicks per day are 1 or less, you will wait a LONG time to make any real money from Adsense (if you can manage to get thru the Smart Pricing effects). This is the case with the overblown mesothelioma keywords. It's a rare disease guys. There are very few clicks per day, which makes the bid price irrelevant. BTW, Cash Keywords lists the Google clicks per day in Adwords as if the ad were ranked #1 for all Adwords ads. It's a guideline, but a really helpful one to use in selecting top money keywords to target.
Like any online business, if you find something that works, keep doing the same thing until it quits working. Guess what, over the years of working online, I find this basic piece of advice for making more money with Adsense, works/worked in making more money as an SEO, as an affiliate, and as webmaster.
This business is not rocket science or a magic bullet - in fact what can work to make more $$ with Adsense can be pretty mundane, becomes a routine and actually once the initial excitement wears off, it can literally be boring. Hey, but getting a bigger check is never boring, right?
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