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I need some help with estimates of numbers
brianneedshelp

Msg#: 12874 posted 7:39 pm on Mar 21, 2006 (gmt 0)

I am putting together a business plan for a webiste and want to use the google adsense program.

Here is what I have so far. Assuming I am using averages for all the values I can tell how much I earn from google by the formula:

Earnings = impressions * click through ratio(CTR) * earnings per click (EPC)

Impressions are all me and based on how well my site performs and is not in any way unknown. I can work on improving it and measure every little thing I do.

CTR is something "I" cannot estimate. It will depend on the website type, I imagine. What CTR, or range, for a site that people came to looking for information on a particular topic (there will be multiple topics) might I plug into my business plan?

The earnings per click are 70% of what google makes/charges is this true?

Also how can I estimate this number for a given topic. It is easy to tell what it will cost at google adwords to place 1-3 or 4-6 or 7-10 on a given keyword, are any of these good numbers to use as average?

for example consider the search phrase "roth ira"
If you let google adwords suggest a number yesterday they said \$8.22 to \$10.57 per click and that you will get 61-85 clicks a day. OK so this is rediculous, I have no idea how they come up with it but then I picked various numbers and here is a table of the results. By the way I did it again today and get a different result from yesterday.

For "roth ira"
my max CPC : estimated clicks/day : estimated avg CPC : estimated position
unlimited yesterday : 61-85 : \$8.22-\$10.57 : 1-3
unlimited today : 48-66 : \$4.75-\$6.88 : 1-3
\$3 : 30-49 : \$1.24-\$1.86 : 1-3
\$2 : 28-45 : \$0.88-\$1.32 : 1-3
\$1.50 : 27-43 : \$0.62-\$0.93 : 1-3
\$1.25 : 26-42 : \$0.56-\$0.84 : 1-3
\$1.00 : 25-41 : \$0.47-\$0.70 : 1-3
\$0.90 : 25-40 : \$0.43-\$0.64 : 1-3
\$0.80 : 24-39 : \$0.36-\$0.59 : 1-3
\$0.70 : 24-39 : \$0.33-\$0.55 : 1-3
\$0.60 : 23-38 : \$0.31-\$0.51 : 1-3
\$0.50 : 22-37 : \$0.24-\$0.44 : 1-3
\$0.40 : 20-35 : \$0.18-\$0.37 : 1-3
\$0.30 : 19-33 : \$0.14-\$0.29 : 1-3
\$0.25 : 18-30 : \$0.11-\$0.25 : 1-3
\$0.20 : 15-28 : \$0.09-\$0.20 : 4-6
\$0.15 : 13-26 : \$0.07-\$0.15 : 4-6
\$0.10 : 10-22 : \$0.05-\$0.10 : 4-6

OK first thing is if you look at all the pay-per-click ads on the side of google there are 43 advertisers for "roth ira". Besides none of this data making sense... (e.g. how can there be 43 advertisers and you rank 1-3 or 4-6 for any amount of money?)

What numbers would I plug in my average earnings per click (EPC) to get the most realistic numbers assuming I had a page that was "best fit" with searching on the phrase "roth ira" on google.

Any insight into what numbers to use or what other methods I might consider instead?

Please tackle any little piece or large part as your mood strikes. Thanks

OptiRex

Msg#: 12874 posted 7:50 pm on Mar 21, 2006 (gmt 0)

Welcome to WebmasterWorld although I don't feel you'll like my advice.

If you are considering setting up a web site with a business plan based around Adsense then I would suggest you think very long and deeply about it.

Unless you are going to invest in Adwords yourself or traditional media etc, then you have a fight getting into the Google SERPs. If you rank outside the top half a dozen results, the bottom of the page or the top or bottom of the second page, then do not rely on the SERPs to deliver traffic.

There are pages and pages of good results in the SERPs, and the #1 result even carries Adsense, therefore you will have an enormous battle on your hands against already established players.

brianneedshelp

Msg#: 12874 posted 7:56 pm on Mar 21, 2006 (gmt 0)

I am considering a site that will make money on advertising.

Adsense seems to be the easiest way to get started. I can honeslty say the site won't have useless info and is not there simply to get adsense revenue. I will attempt to attract people looking for information on a topic in what I feel is a rather novel way, and yes I will be paying for advertising.

I just need to somehow determine if I will be earning \$100 or \$10,000 from Google Adsense after the site is up an running. That will dramatically impact my own advertising budget ;)

Msg#: 12874 posted 8:10 pm on Mar 21, 2006 (gmt 0)

The real problem that I think many of us who use Adsense will tell you is that even on the best of sites the amount you earn can fluctuate wildly from day-to-day or month-to-month. Scroll down and read some of the threads in this forum to see what I mean.

Regardless of how good your content might be, one misplaced word and you're suddenly seeing ads for speed-reading courses that will only make you .05 a click. Then again, SmartPricing might kick in after you have a particularly good month and suddenly you're making less from the same ads and click-thru rates.

What a lot of people in this forum would suggest is that you don't put all of your eggs in the Adsense basket . . . it tends to have a very slippery handle. Plan on having some regular advertising and some affiliate links as part of the mix.

brianneedshelp

Msg#: 12874 posted 9:47 pm on Mar 21, 2006 (gmt 0)

I can completely understand your point. I am actually working on a business plan and this is one tiny aspect of the overall plan. I am afraid that if I guess horribly wrong with these numbers (advertising revenue) then my whole plan will fall apart. I will be spending some money to get it started and do not want to "hope" it will work out for me.

I don't wan't a daily best for CTR or EPC, just some monthly averages that are realistically achievable with a website that is getting traffic for people looking for information.

jomaxx

Msg#: 12874 posted 9:56 pm on Mar 21, 2006 (gmt 0)

This kind of planning is impossible. Best thing to do is build it first and then let the site grow and evolve in response to what earns the most money and how users interact with it.

I will say that in the example you listed, bidding 20c gets you about half the traffic that bidding \$3 does. Thus if these numbers are at all correct, an advertiser would have to be crazy or desperate to bid much more than 20c.

btas2

Msg#: 12874 posted 9:58 pm on Mar 21, 2006 (gmt 0)

 I just need to somehow determine if I will be earning \$100 or \$10,000 from Google Adsense

I don't think you can predict adsense earnings "before the fact". So much depends on how much traffic you get, what your Google search ranking is, how well your clicks convert, how "smart pricing" kicks in and a bunch of other stuff you have no control over and no knowledge of.

You have no idea what a click on your site will be worth, even if you know what the maximum bid is.

You just have to build it and see how it does. After a few months then you'll have some data on which to build a business plan.

david_uk

Msg#: 12874 posted 10:01 pm on Mar 21, 2006 (gmt 0)

It's simply not possible to give estimates. Adense is a roller-coaster ride for everyone, and the only way to know how it will perform on your site is to try it.

I'd suggest writing the business plan AFTER you have got the site online (including Adsense implemented), and can then see how things are working out. You will at least have some idea bout traffic predictions and how adsense performs on your site.

Sorry to be unhelpful, but the simple truth is that nobody can give you information on which to base a business plan - there are simply far too many variables.

brianneedshelp

Msg#: 12874 posted 10:11 pm on Mar 21, 2006 (gmt 0)

hmm, I can sense there will be problems. But I still want to estimate. I guess I will be putting down a "smoke and mirrors" plan, but I gotta put something.

I guess what I was thinking was that maybe someone might offer up a few numbers that they make. If 5 people told me they make 1.5%, 1.7%, 1.9%, 1.3% and 2.6% CTRs then I could reasonably expect to be safe with 1.5%.

If five people told me they make 1.3%, 12.5%, 43.2%, 2.1943% and 0.0342% then I guess I would agree that I can't plan ahead.

Thanks!

OptiRex

Msg#: 12874 posted 10:13 pm on Mar 21, 2006 (gmt 0)

 I am afraid that if I guess horribly wrong with these numbers (advertising revenue) then my whole plan will fall apart.

There have been some wise comments here, do not try and guarantee any income from Adsense until the site is up and running and see how it performs in the SERPs.

We're all trying to save you heartache and problems before you even begin.

OptiRex

Msg#: 12874 posted 10:16 pm on Mar 21, 2006 (gmt 0)

Right, I run in excess of 100+ sites for niche construction products:

From 1% to 32%.

From USD 0.01 to USD 2.07

There ya go...

brianneedshelp

Msg#: 12874 posted 10:23 pm on Mar 21, 2006 (gmt 0)

Does anyone have a website here? my guess is yes
Does anyone keep track of what percent of people leave their site by clicking on an ad? my guess yes
Is anyone willing to toss a dog a bone and share that number? my guess maybe......

Moosetick

Msg#: 12874 posted 10:23 pm on Mar 21, 2006 (gmt 0)

If you really want some #s, read through the last 500 discussions. Several people have posted much of the stats you are looking for.

As others have said though, you can't count on getting 5, 500, or 5000 hits/day until you create a site. Advertising will drive some people there but quality content will be the only thing that brings them back.

Business plans have value but since setting up a site has minimal cost dollarwise I'd concentrate on content before \$\$.

hunderdown

Msg#: 12874 posted 10:28 pm on Mar 21, 2006 (gmt 0)

Optirex just gave you numbers. There is a WIDE range of CTR and EPC even in his niche!

I can also give you numbers. I have one site. You can even see it in my profile. But I can't tell you the real numbers because that's against the AdSense TOS.

I will tell you that even on my small site, CTR varies by a factor of more than 5. That is, from x to 5x, depending on the page, ad placement, etc. EPC varies by a factor of about 50!

You have to try things out first, perhaps on a small scale. Then you'll have information on which to base your plans.

gregbo

Msg#: 12874 posted 10:35 pm on Mar 21, 2006 (gmt 0)

Predicting AdSense revenue is like predicting earnings from stocks.

As others have said, create your website first, get some traffic estimates, then figure earnings estimates. Don't make the mistake (as others have) of expecting that the revenue will flow just because the website exists and you are "following the rules."

brianneedshelp

Msg#: 12874 posted 10:37 pm on Mar 21, 2006 (gmt 0)

 Right, I run in excess of 100+ sites for niche construction products: What is your CTR (for all ads on a site)? From 1% to 32%. From USD 0.01 to USD 2.07 There ya go...

Thanks! That is a great start. From all of those sites and all of your obvious experience that will now give me a target for what I can shoot for best and worst case.

Obviously you have given me the widest possible range you could to show me how wrong I am but I gotta tell ya I had no clue and its helpful.

So lets pretend that I am a reasonably intelligent person (I know many of you may debate me there ;) and I have a good plan that fell at the top of the bottom quarter of your websites. That is it performs better than 25 of your sites. What would be the CTR and EPC for that site? Just an estimate you obviously don't have those numbers handy... then I feel I would have numbers that I could honestly shoot for knowing that if I don't meet them it would be possible to.

david_uk

Msg#: 12874 posted 10:47 pm on Mar 21, 2006 (gmt 0)

Google TOS prevents publishers from disclosing anything other than total earnings.

However, I can give you ball park figures. On my site the daily ctr varies up and down by about 50% from the average ctr. That is my age / 10 (ish). That doesn't mean the number of people that "Leave" - many visitors click back again.

The banner impressions on my site are fairly stable, and the average monthly epc is greater than my age by some way.

I can't quote exact figure as I said because of G's TOS. However, I have two kids and remember flares the fist time round.

Now how exactly does knowing my epc and ctr help you? No two sites are the same. I have two sites in the same niche but coming at the topic from two different directions. One site does very well and my wife no longer needs to work, the other I don't have adsense on it at all, as it doesn't attract the quantity of visitors and doesn't have the clicks.

What is true for my site isn't true for it's (nearly) identical twin - how on earth would knowing my data formulate your business plan on a site you haven't even built yet?

btas2

Msg#: 12874 posted 10:49 pm on Mar 21, 2006 (gmt 0)

It's still not possible to help.

There's no reason at all to assume you won't do worse than any 100 random sites or better than any 100. There are a lot of smart people with sites that earn squat and there are some total idiots who are raking in money simply by luck.

An average site might make a few bucks for 1000 pageviews but there's a HUGE amount of variability depending on what you're selling and how you're trying to sell it and there's no way to predict how well your site will rank in searches.

imstillatwork

Msg#: 12874 posted 11:07 pm on Mar 21, 2006 (gmt 0)

Let me put it simply:

more TRAFFIC = more MONEY

Work on your CTR as you go, I think everyone optimizes positioning, etc...

brianneedshelp

Msg#: 12874 posted 11:12 pm on Mar 21, 2006 (gmt 0)

 I will tell you that even on my small site, CTR varies by a factor of more than 5. That is, from x to 5x, depending on the page, ad placement, etc. EPC varies by a factor of about 50!

I am not clear what you mean. When you say it varies by a factor of 50 what time frame are you refering to? It doesn't vary that wildly from month to month does it? I am only looking for averages.

Rodney

Msg#: 12874 posted 11:22 pm on Mar 21, 2006 (gmt 0)

It's not what you want to hear, but the truth is there is no good answer. There are too many variables and the range of earnings is too wide.

We could give you numbers, but they wouldn't be based in reality (reality being what might possibly happen with your site).

brianneedshelp

Msg#: 12874 posted 11:32 pm on Mar 21, 2006 (gmt 0)

OK, I gotta say I hear you all, I understand your warnings. I have always had a belief deep down inside that I can do anything, and with persistance can do it as well as anyone else as long as it doesn't have to do with innate talent such as playing basketball as well as Jordan. Creating a website for making money falls in the category of "I can do it".

So follow my logic here. I want to open an espresso stand. I find out what 10 other espresso stands can bring in. I then make a business plan based on the fact that I should, with sweat and perserverance, be able to attain the average. I watch how they make money, sell the baked goods along side, punch cards, yada yada. I then see that the money they make is based on the traffic flow on the street which they are located. So I come up with how many customers per 1000 that drive by will stop. Obviously the rates will vary wildly depending on all sorts of things. But if the 10 stands I looked at each get bewteen 10 and 50 people to stop, then I can safely assume 10 will stop at mine. Further, if they don't then I know I am doing something wrong. Not that the business plan numbers were bad, but maybe that something like the big pile of beans painted as the logo closely resembles something unappealing and makes people not stop.

Lets say that each of the 10 stands average from \$3,000 to \$12,000 in sales per week. It would be logical for me to assume that I can attain \$5,000 in sales per week. How so? I could just as easily bring in \$247 and wonder what the heck happened. It would be highly unlikely that I would \$48,000 in a week as well. I would just have a goal. I would of course want to blow right on by it, but I gotta start with a realistic goal in order to reach it. This is all the business plan would do for me is narrow down the range of expectations and allow for realistic goals and measure of how good my site is or how bad my site sucks.

What would you estimate your CTR and EPC for your next website you make would be if it cost you money to make it?

btas2

Msg#: 12874 posted 11:46 pm on Mar 21, 2006 (gmt 0)

I've made sites that have made nothing. They have attracted no traffic and what does stumble onto them rarely clicks.

I've made sites that get some traffic and have a very high click through rate that have a very high EPC, but still don't make much because the traffic is light.

I have sites with lots of traffic, a lower EPC that make me enough to live on.

You can't tell until you make it and see how it does. It doesn't matter if it has a an EPC of \$50 if traffic is low and CTR is low. I've seen CTR anywhere from under 0.1% to over 20%.

jomaxx

Msg#: 12874 posted 11:50 pm on Mar 21, 2006 (gmt 0)

Isn't it clear yet that this is very different from an espresso stand? You could very easily earn ZERO, unless you are buying visitors in which case you could very easily have negative earnings.

What we're saying is that you need to stop planning and start doing. You have a long learning curve ahead of you before you can even begin to realize what you will or will not be able to achieve.

Rodney

Msg#: 12874 posted 11:53 pm on Mar 21, 2006 (gmt 0)

 his is all the business plan would do for me is narrow down the range of expectations and allow for realistic goals and measure of how good my site is or how bad my site sucks.

I understand your analogy about the esspresso stand, and in 90% of the cases, a business plan like the one you're creating would be easily created by looking at averages.

Adsense is a whole different animal though.

Best of luck with your efforts. I have no doubt you can build a successful website and even make good money with adsense, but you might waste a lot of precious time trying to work out a business plan on averages and numbers that will have no bearing on what your site may acheive.

LifeinAsia

Msg#: 12874 posted 12:05 am on Mar 22, 2006 (gmt 0)

The best advice I can give you is to not count on AdSense income. That way, whatever you do get is a bonus. But you won't get shot down by giving unrealistic numbers that don't materialize.

You can put in your plan that you plan to use AdSense for supplemental income, but that projecting revenue from it is not realistic at this point- too many variables. However, you can specify something like you plan to take x% of any revenue you get from AdSense and put it back into your business to use as advertising/marketing expenses (in addition to your existing advertising/marketing budget).

That way, if for whatever reason you don't have any AdSense revenue, your budget isn't affected. If you do get AdSense revenue, your revenue is up and you have a bigger advertising budget. Assuming you still make the other numbers, of course!

bxbase

Msg#: 12874 posted 12:08 am on Mar 22, 2006 (gmt 0)

according to that expresso logic
then if we average the three top internet auction sites
and average the three bottom internet auction sites
then i should make about the average

hmmm hundreds of millions from the top sites + 0 from the bottom sites
still averages hundreds of millions.

forget adsense make an online auction site.

there are many many variables with internet,
the largest bieng traffic unfortuanatly you cannot estimate traffic.
unless your traffic estimate is from 0 to 1 milion it will be wrong.

brianneedshelp

Msg#: 12874 posted 12:33 am on Mar 22, 2006 (gmt 0)

 according to that expresso logic then if we average the three top internet auction sites and average the three bottom internet auction sites then i should make about the average

according to the logic you can make the average PER USER yeah. The espresso analogy, so cleverly I think, had the traffic built in just in the same way I am not worrying about traffic right now.

One of my assumptions is that I can work on my traffic easily. If I want more I can get more. Not for free or without work, but more. I can measure anything as far as traffic goes and see what gets more then work on that. If I can't turn that traffic into money then why bother getting more. If I can then I know how much I can spend to get more.

If I or you were inclined to start an auction site then we would sit down and figure out how much it would cost, how much time it would take and if it would be worth it. We would then measure how much we make per costomer and work on increasing the amount of customers. We would look at ebay and say if I can make as much per customer as they can there there probably isn't much left to squeak out of it. Of course we wouldn't stop trying ;)

Hey the concept of a business plan may seem crazy to some of the people here, but that is how you invest money. I don't want to make \$47 a day while spending \$58, I want to retire. If I get in the ring it isn't just a hobby. I have to set my first range of goals and thought you people could help.

I am thinking 5% CTR and \$0.20 EPC would be a good goal that will be reasonably possible for what I plan on doing (based on the feedback and other info on this site). Anyone think these numbers are crazy?

europeforvisitors

Msg#: 12874 posted 12:37 am on Mar 22, 2006 (gmt 0)

 Hey the concept of a business plan may seem crazy to some of the people here, but that is how you invest money.

Just remember that a business plan is only as good as the data it's based on (unless you're trying to pitch someone else, in which case it's only as good as you can make it out to be!).

abbeyvet

Msg#: 12874 posted 1:24 am on Mar 22, 2006 (gmt 0)

I would exclude adsense earnings from a business plan altogether, and have done in the past.

They are so unpredictable that putting them in, even at a ballpark, is likely to make the figures the business plan completely meaningless, since no matter what estimate you make I would be willing to bet it will be wildly wrong, whether up or down.

Make a good plan that includes no earnings from Adsense, get the site up, and review the plan in the light of experience after some time has passed. Any business plan should be subject to constant review anyway, and that is even more the case with one based around a website and yet more with a website that includes adsense revenue.

By excluding adsense income, which is likely to be tiny anyway in the initial stages, you are not setting your self up for a shortfall at an early stage that could derail the train altogether.

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