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## Does this make sense?

#### Nick Jachelson

4:43 pm on Jan 22, 2006 (gmt 0)

#### Junior Member

joined:Jan 5, 2006
posts:86

My AdSense average eCPM is \$4.00. That means I make \$0.004 from each impression. So naturally I figured there is no way I could earn enough money to make up for paying the minimum of \$0.03 per click for AdWords. That is, until I saw that my AdWords visitors view a whopping 14 pages/visit for some targeted keywords, 7 times more than my normal visitors. No wonder I make most of my money in the early morning when my AdWords ads show.

Therefore 14 x \$0.004 = \$0.056. (\$0.056 - \$0.030)/\$0.056 = 46% ROI.

This sounds too good to be true. If I invest \$100 this month, I will get back \$146. After a year of reinvesting, I will be making \$9,000 a month!

Obviously I'm going to run up against a wall at some point where I would have to pay more than \$0.056 per click to get any more clicks. What else am I missing?

#### ve3cnu

5:03 pm on Jan 22, 2006 (gmt 0)

#### Junior Member

joined:Oct 5, 2004
posts:151

Here the math I use:

divided by
Cost per click (in \$)
=Number of visitors inbound to my site
x
CTR on ads on my site (in %)
=Number of Clicks away from my site
x
Earning per click
=Revenue generated from acquired visitors
minus
=Profit (Loss if negative) for my site

So, for example:

divided by
0.05\$ CPC
=200 visitors to my site
x
3% click-through-rate
=6 clicks away from my site
x
0.30 average revenue per click
minus
=-8.20 Profit/Loss

in this example it does NOT pay to use Adwords.