How to Make Financial Projections using Google Adsense

About this post:Last days I prepared financial projections for a business plan. I searched internet, but could not find any ... After I have make it,  I thought to share.

Google lets publishes to serve ads at their sites, the ads serving and management system working behind is called Google Adsense. Before presenting Adsense forecasts, I want to briefly describe a few terms, concepts, and rules that are used in Adsense. One must know these fundamentals to understand the presented forecasts.

Page Impressions: It is a count of how many times Adsense script was processed on a page that display ads. For general understanding, we may think it as number of page views in specific time period (although details encompass little differences).

Page Impression Increase: This is my estimation of Page Impressions’ percent increase in the current specified period as compare to last period (i.e. a month or year).

Effective Cost Per 1000 Impressions (eCPM): It is also called Cost Per Mile, a very important factor in Adsense because it encompass different things e.g. page contents quality, page rank, latest supply and demand situation of ads business at internet, etc. Its range varies from 0.05 USD to 5 USD. In some cases, the cost may go higher than 5 USD. In simple words, it is ‘how much Google pay to publisher for 1000 Page Impressions’. For example, if Google pays 1 USD to a publisher for 500 Page Impressions.

Its mean, the website’s eCPM is 2 USD which is calculated by (USD Earning / Page Impressions) X 1000.

Ad Clicks: It is my estimation for number of clicks on ads during the specified period (i.e. a month or year.)

Clickthrough Rate (CTR): It represent how often users click on ads. For example if my Page Impression is 100, and an ad is clicked only once, the CTR will be 1%.
It can be calculated by Page Impressions / Ad Clicks X 100.

Ad Rate:It describe what Google charge the advertiser for 1 ad click. It varies from 0.05 USD to 8 USD and some time even more. Google Adsense algorithms decides which ads to serve to your website. Ad Rate is set for each ad by the advertisers.

Page Impressions Revenue: It is publisher revenue generated by Page Impressions.
It is calculated by multiplying number of 1000 page impressions with eCPM i.e. (Page Impressions / 1000) x eCPM.

Clicks Revenue: This is publisher’s share from the amount paid by advertiser. Google says, it gives 68% to publishers for content ads (Google Search Ads, Google Feed Ads, etc. has different rate).

Total Revenue: It is sum of Clicks Revenue and Page Impressions Revenue.
Estimated 8 Months Revenue Forecast with Google Adsense:









Comments

  1. Thanks FYI, i really need this, i have plan also for my business plan, if you dont mind, would you share to me your excel, i need to analyze too.

    Thanks

    ReplyDelete
  2. That’s a knowledgeable share. Keep sharing such details. We also would prefer hiring the Google Adwords Management service for my blog’s promotion. Once my new blog starts getting huge traffic I will definitely apply for Google Adsense.

    ReplyDelete

  3. Pretty blog, so many ideas in a single site, thanks for the informative article, keep updating more article.
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  4. This could be one of the most useful blogs I have ever come across on this technology. I am a newbie to this technology. Great work admin.
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  5. Very informative blog that shows great learning on how to make some financial projections. This gives some sort of significance to the SaaS Financial Model when it comes to creating a financial projections and statement.

    ReplyDelete

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