I've done some research with respect to online advertising and revenue potential... don't get me wrong: I am not planning on setting up google ads or something like that on my blog because I don't have enough traffic on my blog (yet, I hope). But anyway, I'm interested in what average revenues on blogs or other websites are. There are many different advertising techniques and ways of measuring revenue. Here some explanations of popular abbreviations:
PPC (Pay Per Click) is an advertising technique used on search engines and other websites. Advertisers bid on keywords - for example, if an advertiser sells shoes, he/she would bid on the keyword "shoes", hoping a user would type those words in the search bar, see their text ad, click on it and buy. The advertiser pays only when the user clicks on the ad. The resulting cost for the advertiser is therefore the CPC (Cost Per Click).
The cost of another advertising technique is the CPI (Cost Per Impression). The CPI is often measured using the CPM (Cost Per Mille) metric. A CPM is the cost of 1,000 impressions. The according revenue for the website owner is often related to as RPM (Revenue Per Mille). I haven't really understood how that is measured, because it seems that RPM is an average value of different advertising techniques and doesn't relate to only graphic ads or text ads. So I guess "impressions" is a quite broad term. I have seen ranges for RPM between $0.1 and $50... so here is my big question mark: what is a reasonable average RPM or other revenue key figure for text ads on a not very specified website or blog? Is there another way to track your revenue?
I've often came across the CTR (Click-Through Rate), which is another important ingredient to the advertising term jungle and a way of measuring the success of an online advertising campaign. It is obtained by dividing the number of users who clicked on an ad on a web page by the number of times the ad was delivered (impressions). For example, if your ad was delivered 100 times and 1 person clicked on it, then the resulting CTR would be 1%. The problem is that I still don't know what the earning is because I don't know how much a click costs.
Does anybody have any insights?
Thanks, Dania
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2 comments:
Hello Dania,
The whole world of website advertising is quite complicated with all those letters, CPI, CPC, CPM RPM or CTR as you correctly mention. Regarding the cost of a click, well there isn't a simple answer, it very much depends on as to what limit the advertiser has agreed with for example Google. It's very much based on the Keywords that you contract as part of your ad and the value of those Keywords, and how many impressions you want to get. Google is quite flexible allowing you to limit the number of ads per day that are clicked based on your budget, they also give you an indication of keyword values, so that you can set your price for your ad.
As far as the site showing the ads, they get a percentage of what the advertiser pays. Again, this percentage isn't very clear although commonly it's thought to be 50%.
So back to your question, How much does a click cost? It depends.
By the way, excellent post.
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