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The truth about AdSense CPCs

The complaint that I hear most about AdSense is the one about too low CPCs (click prices). There are actually two truths about that. The first is that the CPC isn’t everything that determines your income. The second is that I bet your AdSense account doesn’t suffer from low CPCs from every angle.

Understanding CPC

To understand CPC, you need to accept that click prices aren’t random. AdSense is just the publisher’s view, where ads get delivered. On the other side – the advertiser’s view – are AdWords and some other ad networks and services. Advertisers are companies and individuals trying to sell something to clients. Ads are just a means of marketing for them – an expense that they try to get the most out of.

Advertisers like AdWords, because they only have to pay you when someone clicks on the ad and not, if they only see it. The more likely a visitor buys something after clicking or the higher the price of the product, the more likely advertisers are to spend money on clicks from your site.

For you, to generate a lot of income, not only the click price matters, but also the probability of the visitor to click on an ad. Therefore, the really important value – for AdSense and for you – is the RPM, the income per 1,000 ad impressions. It is the sum of clicks multiplied with click prices.

Now let’s go over to your site. You want to monetize the hard work you put into it and therefore, put some ads into very good position. Imagine that even the click rates are well, but due to very low click prices your overall RPM is not what you have hoped for.

The reason behind these low click prices is often that advertisers and AdSense don’t think that your visitors would click as often on high paid ads and transform into paying customers. Why do they think that? There are a couple of reasons, which are described in the following.

Specific Reasons for low CPC

One reason for low CPCs is the topic. If you have a website about flowers, it seems unlikely to AdSense and advertisers that one would think about buying an iPad while visiting your posts about flower arrangements. Since flower arrangements are not that easy to purchase through the Internet, competition for this topic is rather low and, therefore, also are the click prices.

Another reason for low CPCs is the location of the traffic. Head over to your AdSense account and check out the Countries section of your Performance Reports. If your content is in English, chances are you have the best CPC for visitors from the US, UK, Canada, and Australia, but rather low from India, South Africa, or Nigeria. The reason is mostly the lower income in these countries.

If we are already in the Performance reports of your AdSense account, check out the platforms section. I bet that you will be surprised about the huge difference between the CPC and RPM of mobile visitors compared to desktop visitors. Leverage this knowledge by increasing your mobile income with better ad placements and also try to attract visitors from well-paying devices.

To wrap this rather complex topic up, I would like you to ask yourself how likely visitors are to buy something from your website and what this would be. The higher the value of such products and services, the better your chances are for a high CPC.

The next part of this mini-series is going to cover Channels.