Keyword Competition and Making Money from AdSense

I've been playing around with Market Samurai a lot recently, trying to get my head around the effect that Google's policy to not reporting keywords used by logged in users is having on my ability to turn a profit using AdSense.

(If you missed out on what actually happened, check my blog post on The Death of Keyword Research.)

One thing I'm pretty sure of is that Google themselves know what keywords are being used. After all, their AdWords, and AdSense programs both rely, to a certain extent, on that knowledge.

Google is also passing that information along, not via Analytics, but via products like Market Samurai, which aggregates a lot of data from search providers, and AdSense to enable us to find profitable niches. Not to hundreds of keywords to go with them, content to promote them, and something called the Competition index.

Now, a simple competition index might be the number of search results returned by Google for a keyword phrase. This is fair, and workable, but a bit artificial. After all, 90% of those search results might be complete rubbish!

Market Samurai goes one step further, and provides another layer of competition information based on the top domains and their comparative reliability, influence, and authority.

This is all good, but is competition really important when making money from AdSense?

The answer may well be no. Or possibly just maybe.

A lot of content creators make money from sites that have installed AdSense, and pass those earnings along. Suite101, for example, and Squidoo, HubPages, and many blogs with authoritative top level domains.

So, just because there are a lot of entries in a search engine result database for a keyword phrase, the weighting of the individual domains may well mean that the competition index can be ignored. 

Comparing a new domain with a single article on it with an established and regularly indexed site like Suite101 isn't comparing like with like. Google sees these two things very differently - and will probably give more weight (higher ranking) to Suite101 articles.

Added to which, there are other traffic acquisition strategies that can bring traffic. Analytics reports that for some of my most popular articles, the majority of the traffic is by referral and social media.

The kicker is that the social media traffic has more traction, with visitors spending more time on the site, and with much lower bounce rates. My guess would also be that, were AdSense to be installed, they'd bring the biggest profits!

(Disclaimer : I am an affiliate for Market Samurai, as well as being a user. By clicking on any of the links, I will potentially earn an affiliate payment. If you do not wish this to be the case, please use this link.)

CPC PPC and Traffic Acquisition Explained

Using Google Resources for Keyword Research and Know Your Numbers

Why you should always be able to calculate the cost of acquiring traffic, the anticipated income, and the market price of keywords for your product niche, or risk leaving money on the table!

Someone asked me the other day why so much time is spent concentrating on PPC, CPC and the cost of traffic. It's easy - if you don't know your numbers in business, whatever the business, you're doomed to failure from the start. Whether you're talking about keyword research, AdSense/AdWords or other pay per click advertising, or just looking to buy some bulk traffic or ezine adverts, the only way to know that it will be profitable is to know the numbers. Chiefly, it is in the infopreneur/affiliate marketer's interest to know:

• the cost of traffic acquisition
• the conversion rate
• the income per action

In other words, it is necessary to have a good handle on how much the campaign will cost, what proportion of the resulting leads will become customers, and how much each anticipated action is going to make. It is only when in possession of these three indicators that the calculation as to whether a campaign is worth the time and money can be performed. Before making any sense of these numbers, it is necessary to understand a few terms.

PPC

This acronym refers to a specific model used to acquire traffic, Pay Per Click. It is the model used by Google AdWords, amongst others, whereby the advertiser pays a fee for each visitor directed to their site via an advert that they supply. From the point of view of an online entrepreneur, the model is very powerful in allowing adverts to be tested for a relatively small fee.

What is more important is the amount of control that the advertiser has over the budget. For example, the PPC provider (be it Google or another) will let the advertiser know up front how much each click will cost (see CPC, below). Added to that, the advertiser can also pick a budget for the campaign that fits their needs, and know how many guaranteed site visits that will bring.

It is a very, very, powerful, and flexible, traffic acquisition model indeed.

CPC

CPC is the Cost Per Click. It is the amount that an advertiser has to pay, per click, to receive a single visitor. Depending on the traffic source (paid inclusion, context sensitive advert, email advert, site advert, etc.) this can vary greatly. A reasonable indicator (for reasons explained below) of CPC is the Google AdWords cost.

This can range from $0.05 (five cents) right up to $10 and more. For a single click. This is a very important metric, as it allows the site owner to calculate the expected profit of a campaign, based on the cost of traffic acquisition.

The profit is equal to the selling price, multiplied by the conversion rate, multiplied by the number of visitors, minus the CPC multiplied by the number of visitors. So, if a site owner sells a $37 eBook, from a sales page converting at 10% (0.1), then the profit from a 100 visitor campaign, with a $0.05 CPC would be:

profit = (($37 x 0.1) x 100) - (0.05 x 100)
profit = $370 - $5
profit = $365

Simply turning this equation around allows the site owner to calculate the highest CPC that they will tolerate, for their product price and conversion rate.

Google AdSense and Google AdWords

A final word, since this is a keyword research blog, on AdWords and AdSense.

Google AdWords works by allowing site owners to bid on keywords. The more bidders there are, the higher the CPC. Then, the Google AdSense system is used to display adverts on pages which seem to match the keywords in content and context. The owner of the site running the advert then gets paid a (small) portion of the CPC.

So, when researching keywords, it often pays to look at the Google AdWords Keyword Tool and check the CPC. It's a great indicator of keyword value, be it for an AdSense affiliate, or an AdWords advertiser.

Specifically, the AdSense and Keyword Research Guide gives direct instructions from both sides of the marketing fence.

Until next time,
Guy

Using AdSense CPC with Search Volume

How to properly leverage the AdWords Keyword Tool Keyword Research Results

This article highlights techniques for using the AdSense Keyword Tool as a keyword research resource, using both CPC and Search Volumes effectively - and why you need to use both!

Regulars here at the KeywordCracker blog will know that I often preach that the CPC column in the Google AdWords Keyword Research Tool is the best way to gauge the profitability of a keyword or keyword phrase. Of course, this works well for beginners, but some of us want to master AdSense, as well as drill down onto keywords that will enrich us via other revenue streams.

If you only look at AdSense revenue, of course, CPC remains a good indicator; after all the higher the CPC, the more the keyword will make when a visitor clicks on it. And since you are using the Keyword Cracker methodology, you know where the tipover point is, as well as the anticipated conversion rate for both the keyword phrase, and other products on the page. From a purely revenue point of view, this is enough for a throwaway site.

However, if you are building for long term visibility and wealth generation, the equation shifts slightly.

Now, not only do you want to know how much a keyword will pay (relative to other keywords, of course), you also want to know what the traffic will be on that keyword. In addition, it would be nice to know where the tipover for the whole keyword set is. In other words - which keyword has to take priority, based on current and historical search volumes?

Luckily, Google have made this really easy for us. The first thing to do is export the keywords to a spreadsheet. That could be a Google Document, OpenOffice Calc spreadsheet, or an Excel sheet; it's not important. What is important is to make sure that you have exported the CPC, Search Volume, and Average Search Volume, along with the Advertiser Competition.

These are the four metrics that you will use to create a 'score' for each keyword phrase.

I have been fooling around with this for a while, and I think I have found a good combination which yields the most profitable keywords, and at the same time, identifies those that will offer long term wealth. But it's a moving target, and has to be recalculated every month as seasonal demands change.

And don't be fooled - every single keyword phrase can be subject to seasonal shifts, not just the traditional ones like weight loss, diets, sunglasses and vacation destinations.

My current formula multiplies the CPC by the Advertiser Competition, and multiples that by the average search volume over three months in the same period of the previous year. The result of this multiplication is then weighted by last months search volumes, where available.

I'll keep you posted as to how that gets on!

Learn more about this topic in 'The Adsense and Keyword Research Guide'.

Until next time,
Guy

The KeywordCracker
'The Adsense and Keyword Research Guide'

Keyword Research Mistake That's Costing You $$$

Most people who use keyword research make the same basic mistake. They think they're doing everything right, but they inevitably leave one aspect to one side. In their admirable quest to provide quality content (good) in a popular niche (excellent), they neglect to take the extra step...

...and look for "Buyers Keywords".

A buyers keyword is one that indicates that the visitor is in a buying frame of mind. They know what they want, and are ready to buy it from the site that can offer it. It's a niche long tail keyword phrase with real earning power.

Learn how to research keyword phrases that really pull in the orders (or AdSense clicks!) in the Keyword Cracker eBook. I'll give you a clue : 'nokia n65 leather case' is, and 'cell phones' isn't.

Have a great weekend.
Guy