Google adsense is a great tool to earn some pocket cash though displaying advs on websites (e.g. blogs). It is a contextual displaying platform which only displays advs related to the content of current webpage or website. I always wanted to know how to calculate the estimated earnings based on the exisitng known statistics. The following will explain in short some of the common terms used in google adsense.
Page Views (or Page Impressions): Page Impressions are the number of times a webpage has been viewed by the visitor. This is the number regardless the number of ads placed in a page.
Clicks: The number records the number of valid clicks.
Page CTR (Click Through Rate): Page CTR is the ratio of page impressions to clicks. This is calculated by {Clicks}/{Impressions}. Generally, The higher the CTR the better, as a higher CTR results in more clicks and therefore, higher earnings. It is common for CTR to be between 1% to 2%.
Conversion: A conversion is defined by adversiter. It can mean the user has registered or has made a purchase. Normally, 100 clicks can lead to 1 to 2 conversion.
CPC (Cost Per Click): The amount of money that clicking the adv pays. This is usually related to the topics and the publisher. Some publisher offers a higher bid. It is recommended to register a google adwords account and create a adv to get familiar to the terms.
Page RPM (Revenue Per Thousand Impressions): This is calculated by dividing your estimated earnings by the number of page views you received, then multiplying by 1000. i.e. {Earnings} / {Page Views} * 1000
The estimated earnings can be considered simply the product of Page Impressions, CTR, and CPC.
{Adsense Estimated Earnings} = {Page Impressions} * {CTR} * {CPC}
This page presents a simple adsense-earning-estimator which is written in Javascript.
Google Adsense
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