It took me some time to get my head around Google AdSense’ vocabulary and terms. By no means, I’m not an expert in this area but I hope that sharing my learnings will help people to avoid the frustration I went through while trying to learn how to generate revenue from displaying ads.
Why AdSense?
Most of you heard about Google Ads — a service where you, me and everyone else on the Internet can create ads and pay Google to display those ads to your target audience. Easy.
Your ads might be displayed in Google Search results or (what is most interesting to us) displayed on a website (e.g. www.reuters.com).
Hold on — a website? But I paid Google… well… Google only gets a small cut of what you paid. So, who is the party who received the rest of your money? Someone using Google AdSense (or Google Ad Exchange which we won’t cover in this article) to sell free pixel space on their websites allowing Google to display your ad (or: to display the ad of the highest bidder for the free space).
So, how can I get paid by Google? In short: use AdSense.
When is it worthwhile?
If you run a website that generates more than 50K page views per month.
You can generate $120,000 per year in ad revenue (yes, 120K) when you host a website about finance and hit around 500,000 page views a month. How much you earn depends on the audience visiting your site and the page views per month. Check out the AdSense earnings calculator to estimate your potential income.
So, how can I get paid by Google?
First, let’s understand some basic terminology.
Ad RPM
RPM stands for Revenue Per 1,000 Impressions. It tells us how much we earn for 1,000 ad impressions.
Ad RPM = (Estimated earnings / Ad impressions) * 1000
Example A
If you earned an estimated $180 from 45,000 ad impressions, your ad RPM would equal ($180 / 45,000) * 1000, or $4.00.
Example B
The AdSense earnings estimator tells us: 500K page views (=number of times your website pages load and are viewed by human visitors per month) of a website focusing on finance generate $120,000 per year in ad revenue.
What is our RPM? In other words, how much revenue do 1,000 page views generate? Note: we assume 1 page view results in 1 ad impression.
$120K / ( 500K * 12 months ) ) * 1000 = $20
1,000 page views generate $20 revenue.
Page views
The number of times a user views a page displaying Google ads. AdSense counts one page view regardless of the number of ads displayed on that page.
For example, if you have a page displaying three ad units and it is viewed twice, you will generate two page views.
Ad impression
An ad impression is reported whenever an individual ad has begun to download to the user’s device.
Different ad formats will display varying numbers of ads; for example, each time a vertical banner appears on your site, you’ll see two ad impressions in your reports.
Bid type
The bid type is the way that advertisers bid in the auction for your ad space:
- cost-per-click (CPC) — the amount you earn each time a user clicks on your ad. The CPC for any ad is determined by the advertiser.
- cost-per-thousand impressions (CPM) — advertisers running CPM ads set their desired price per 1000 ads served and pay each time their ad appears.
- Active View cost-per-thousand impressions (Active View CPM) — advertisers bid on 1000 viewable impressions and only pay for impressions that are measured as viewable, that is, when at least 50% of the ad is displayed on-screen for at least one second.
- cost-per-engagement (CPE) — advertisers only pay when users actively engage with ads. For example, advertisers pay for lightbox ads (a type of expandable ad that can expand to a very large size) on a CPE basis, which means that publishers generate earnings from lightbox ads when users choose to engage with the ads, e.g., by hovering over them for two seconds to expand the ads.
Publisher
You or whoever sells ad space to AdSense. Publishers get paid by Google.
Advertiser
Someone who wants to display ads. Advertiser pays Google; Google pays Publisher.
Ad Space
Space on your website that can display an ad.
Ad unit
An ad unit is a free space on your website that can be used to display an ad. One or more ads can be displayed inside one ad unit depending on the type of ad unit. Ad inventory is basically all your ad units combined together — like a product inventory, but for ad space.
We can choose between different types of ad units:
Display
- A great all-rounder, these ads work well anywhere.
- Display ads are responsive by default, which means they automatically adapt their size to fit your page layout and your users’ devices.
- They can be customized to show fixed ad sizes.
- They’re also compatible with AMP pages.
In-feed
- Native ads that flow naturally inside a feed, eg a list of articles or products
In-article
- Native ads that fit seamlessly in between the paragraphs of your pages for an enhanced reading experience.
Matched content
- Recommendations that promote your content to visitors and potentially increase revenue, page views, and time spent on site.
Link
- Displays a list of topics that are relevant to the content of your page.
- Link ads are responsive by default, which means they automatically adapt their size to fit your page layout and your users’ devices.
- They can be customized to show fixed ad sizes.
Ad types
A text ad is a title that’s also a clickable link to a webpage, one or two lines of text, and a website address shown in green. An image ad is an image -medium rectangle, leaderboard and large skyscraper are examples of different formats for an image ad. Check out Google’s example page here to see more.
Rich media, video and auto ads are further examples.
Ad format
The ad format defines where and how the ad is displayed on your website. An ad may be displayed
- within the content of your page (e.g, text and display ads),
- over the top of your page (e.g., anchor ads), etc.
- skyscraper will display up to four ads vertically
- banner ad format will display up to two ads horizontally across the page
The ad formats dimensions allows further customisation:
- In-page: The default value for ads that are shown within your content, as opposed to overlayed over it.
- In-feed: Native ads that slot neatly inside a list of articles or products on your site.
- In-article: Native ads that are optimized by Google to help you put great-looking ads between the paragraphs of your pages.
- Anchor: Mobile ads that stick to the edge of the user’s screen and are easily dismissible.
- Vignette: Mobile full-screen ads that appear between page loads on your site and can be skipped by users at any time.
Ad placement (placement targeting)
Is a group of ad units. Can be your entire website or a single ad unit. Two types of placements exist:
- auto: ads can appear anywhere on your website (default).
- custom: define your own placements using custom channels. Group together specific ad units, eg group by topic, ad format, or location on the page.
Custom channels
Like folders to group individual ad units; allows you to track performance of specific groups of ad units. For example, you might group by
- ad sizes and colors
- location of ads on page (left side vs right side; embedded in content; above content)
- page topics (sports; entertainment; …)
Unbillable impression
AdSense records an unbillable impression for link units when the user doesn’t go on to click any of the ads on the corresponding landing page.
Ad CPM
CPM stands for Costs Per 1,000 Impressions. Advertisers (the source of your ad revenue) running CPM ads set their desired price per 1000 ads served and pay each time their ad appears.
As a publisher, you’ll earn revenue each time a CPM ad is served to your page and viewed by a user.
CPM ads compete against cost per click (CPC) ads in ad auctions, and AdSense displays whichever ad is expected to earn more revenue for you.
Active View CPM
With Active View cost-per-thousand impressions (Active View CPM) bidding, advertisers bid on 1000 viewable impressions and only pay for impressions that are measured as viewable, that is, when at least 50% of the ad is displayed on-screen for at least one second.
Coverage
Percentage of ad requests that returned at least one ad. Coverage can help you identify sites where AdSense isn’t able to provide targeted ads.
Coverage = (Ad requests that returned ads / total ad requests) * 100
Examples
If you have 3 ad units on a page, you’ll generate 3 ad requests. If two of these ad units display ads and one displays no ads, the coverage for this page would be 66.67%.
If you have a search box, coverage of 80% means that an average of 1 query out of 5 shows no ads with the search results.
High coverage, close to 100%, indicates that Google was able to provide ads to most requests. Lower coverage is a sign that Google wasn’t able to provide ads suitable for your page and returned no ads.
