Google Ads as a revenue stream

on October 16 | in Blog | by | with No Comments

Google’s Adsense is probably the best known advertising platform so I have used it as a basis to work out how much revenue your website might make from placing google adverts on your site.

Lots of entrepreneurs new to the Internet put to much emphasis on generating revenue via advertising, so lets look at what is realistic.

The adsense business model is as below:
Revenue = Visitors x click Through Rate x Average Revenue per click

So what does this actually mean in reality, well visitors equate to the number of visitors you have to your site each day. The visitors need to visit the pages you have the adverts on for this to work. Your number of visitors is then multiplied by your click through rate, in the table below we have used a click through rate (CTR) of 1% which would be very reasonable. The average revenue per click is obviously very dependent upon the type of adds you carry but we have used 20p per click as a reasonable measure. So the below shows that with 5000 visitors per day you could expect a revenue of £10 or £300 per month (based on 30 days). With 100,000 visitors per day you could expect a revenue of £200 per day or £6000 per month.

Visitors Clicks Value Revenue
5000 50 £0.20 £10.00
10000 100 £0.20 £20.00
25000 250 £0.20 £50.00
50000 500 £0.20 £100.00
100000 1000 £0.20 £200.00

What does this mean, well thesun.co.uk has 52,000 visits per day (according to Quantcast) and the telegraph.co.uk has 132,000. Which means you have to be a very big site indeed to get 100,000 visits per day. So if your business model revolves around advertising revenue then you have a significant challenge on your hands.

To generate the large number of visitors you will need it is likely to take months and high quality content. Plan for at least 6-months of zero revenue from adsense while you build things.

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