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What i have found is that I can get 3 times the adwords expense in Adsense income. For example if i spend $100.00 month in adwords, I make $300.00 in Adsense. Last month I spent aprx. $250.00 in adwords and made almost $700.00 in adsense.
Now, has anyone taken that to the next level. If you have an untapped market could you simply keep pumping money into adwords and keep getting the same kind of return? Could I spend $1,000 dollars on adwords and get a $3,000 adsense return?
1) Visitors who clicked on an adwords ad to come to your site are far more likely to click on an adwords ad to leave it.
2) Even if it doesn't generate profit (at least not much and not right away for me) it does help to boost your CTR possibly helping your click value over time.
I plan to try it again this winter when I have more eyes at my disposal.
Another factor affecting the success of this method is eCPM and Smart Pricing. Last time I have this site promoting with Adwords I have a loss, cause the visitor click on my 5 cents bid Adwords to come but leave with a 2 cents click on Adsense.
In an efficient, well-informed, low-friction market, as the AS/AW market probably nearly is, opportunities for arbitrage, which is what most of this is, while legitimate, quickly drop in value.
When I started working in derivatives (IT) 10 years ago a simple swap could just about earn a profit of 1%; now it is probably 100th of that (1 basis point) because of a more liquid and informed market.
The more players that enter the market, such as YPN, M$, etc, with good stats and real-time controls, the smaller that the arbitrage opportunities will be.
Adwords to adsense does return profit if you do it right, I dont care how "liquid" you think the market is, it can be liquid gold if done right.
So you create adwords campaign, and now comes the tricky part: you have to choose keywords relative to your website to drive traffic in, but they should cost 5-10c per click to get some profit in the end (you cant obviosly use keyword widgets because you will be paying nearly $1 for a click, and keep in mind what is your clicktrough on your adsence to make profit). So you try, you search, you think, you drink - and in the end you have a list of keywords like blue widgets, widgets for women and so on and whoalia :)
The things I learned were:-
a) The scrapers that buy clicks are very good at writing ads that encourage clicks - a skill I don't posses.
b) If you have a lot of good content that the visitor is interested in then they are much more likely to stay and read the content than click the ads.
c) By blocking all MFA sites I no longer see the sexy ads that encourage click outs and have high click out rates! Lets face it - a lot of the small businesses that use adwords are as good at writing sexy ads as I am!
d) If your site is showing in the top few of a Google search, and your ad is in the right column, then you are probably wasting your ad spend / not going to get too many clicks. I did try to diversify to relevant areas and that worked better.
For me, I would have liked it to work, but the ultimate goal of my site is to continue to be the number 1 information site in my small niche. I obviously want people to click the ads at some point, but it's the content that I really want people to see. After all, that's why I occupy one of the top slots in the first place!
It takes a lot of work on the adwords side. There is so much to learn about how to get your minimum bids down. What I've found - if you know the techniques, you can get keywords that currently require 20c down to 5c min bid. Once you get a lot of your keywords to that level then you have a chance.
You can't do it very well with only one topic - much easier with dozens. I've got about 60 different topics. Also using about 60,000 keywords presently.
How much would you spend in adwords to make $100 or $1000 per day in adsense? It can take a strong stomach and a good credit rating.
EFV is only theorizing this time. He hates arbitrage people.
ps. it is 50% easier using YPN.
A good practice is to calculate the average income per click of the adsense programm and then to set the cpc of adwords to the same level (to get known and to increase the general website's traffic for free) or a bit lower (to get the profit from the CPC difference between the two programms)
So, the variables you have to play with are :
1.- Adwords click vs adsense clicks ratio : how often your visitors arriving from adwords clicks your adsense ads.
2.- Your average CPC, the lower the better.
3.- Your average EPC, the higher the better.