Does Adsense eCPM Grow with Traffic?

by jim on December 23rd, 2009

Jeremy at GenXFinance recently asked me whether site traffic had any impact on CTR and eCPM figures in Adsense. While there’s been a lot of discussion about the idea of “Smart Pricing” and how low CTRs can result in a CPC penalty, this isn’t what this article is about.

Here’s Jeremy’s question:

What I want to know about adsense is whether or not you’ve seen it grow in a linear fashion alongside traffic. Meaning, if you were earning $1,000/month with 50k pageviews a month does that mean you can expect $2,000/month with 100k PVs, $10,000/month with 500k PVs, etc.

Obviously, there are variables in terms of what ads are being shown, how much clicks are paying and so on, but I think over time and with averages you should be able to see whether or not CTR and eCPM scale in-step with traffic as a whole or if there’s some sort of plateau.

First, I can’t speak to CTR because I believe that is something that should remain fairly constant for your site as long as your placements remain the same. There are always going to be targeting issues but since you will be catering to a certain target audience, the law of averages should play itself out.

As for eCPM, I think external factors play a bigger role than traffic in that but for data I pulled Bargaineering’s 2008 Adsense data for the left sidebar (in 2009, that spot was replaced with a display advertisement). I charted eCPM against impressions:

Adsense eCPM vs. Impressions

Correlation Coefficient: -0.22351944
Rsquared: 0.04996094

The two are slightly negatively correlated which means that as traffic goes up, eCPM goes down a little bit. Remember, correlation is not causation (eCPM doesn’t go down because traffic goes up, the two just move in that direction on this data set). I used Excel’s CORREL and RSQ functions to calculate those (I also ran a PEARSON but it matched the result of the CORREL function).

Here’s where a little intuition comes into play, when I look at the eCPMs by date (averaged across seven days to smooth out the chart a little), it looks like seasonality may play a bigger role:

Average eCPM by Date

In the beginning of the year you have the glow of a very strong 2007 holiday season, a little blip in April for tax season, then relatively flat figures until you read the 2008 holiday season. Throughout that time traffic was steadily increasing, thought it’s not reflected in this chart.

So to answer the original question, I think eCPM may be affected a little by traffic but I wouldn’t bet on it. There is no plateau or something “obvious” you can attribute to the data, so I think external factors dominate it in this case. Granted, I’m not a statistical expert so I invite someone to take a look.

Thoughts? Interpretations?

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16 Responses to “Does Adsense eCPM Grow with Traffic?”

  1. Jeremy Says:

    This is very helpful and that’s what I was hoping. It was hard to tell with my limited adsense history and minimal traffic increase year-over-year so I wasn’t sure if it would be correct to assume that if I double traffic that adsense would essentially double as well, or if I should expect CPM to actually decrease or something.

    That is of course, all other things being equal. Obviously you can go in and change your theme, ad placement, or any number of things to significantly increase or decrease CPM over time.

  2. Paul Williams @ Provident Planning Says:

    Hmph, my average eCPM is about $5.00 after six months. Is that normal? Will it go up as I add more content to my site? Part of my problem could be that the majority of my posts have been focused on religious aspects of personal finance. Probably not a lot of high paying ads in that arena. I’ll be adding more general articles about investing, insurance, etc. over the next year, which I suspect will help increase my eCPM. What do you think, Jim?

  3. jim Says:

    There are several factors but your content is going to be one of the biggest factors. It’s not the religion aspect as much as the personal finance aspect, the topics you write about aren’t “advertiser friend.” That’s not to say you should change your content, you shouldn’t let adsense decide your subject matter, but that’s the likely reason for the $5ish eCPM. Keep writing good stuff and it’ll come around.

  4. Paul Williams @ Provident Planning Says:

    I guess that’s true. Contentment and frugality won’t be likely to pull in the big advertising bucks, huh? 🙂 Maybe I should write about how we really do need everything the commercials on TV tell us to buy! 😉

    I’m not writing for the money, yet… If I were, I’d be stupid. I think I’ve netted about $200 in six months and who knows how many hours. It’ll come. I’m just happy to contribute to the PF world and maybe help some people. Thanks for your help, Jim.

  5. jim Says:

    Not through Adsense anyway, you could find sponsorship from some faith based financial services?

    In the beginning, it’s about writing valuable content (raising a cow is definitely a good series) and building a community, not $$$.

  6. Fred @ One Project Closer Says:

    This is a helpful post.

    I believe that our site’s data would show a similar trend. We’re in home improvement and I see a spike in the Nov/Dec timeframe for the holiday season, a decline in Jan/Feb, steady ramp-up from Mar-July with an August peak, and then the lowest point in the year in Sept/Oct when folks start up school and it starts getting colder.

    Makes sense though, when you think about it.

    @Paul – I generally agree with Jim, although I think it’s important to balance community building and learning what content advertisers will pay for, as well as working on ad placement and targeting. Jim’s got a good idea with looking for a targeted advertiser for your niche. You probably already read Bible Money Matters – might be worth chatting with Peter about what’s working for him… He uses a similar ad placement to ours, and I noticed he has some targeted banners on the right side of the site.

  7. Monevator Says:

    For what it’s worth, my eCPM increased with traffic. I think perhaps at the start whatever traffic you get is very random, whereas after a while it starts to come on target.

    You’d also expect Google to bias sending traffic to pages that generated decent clickthrough payouts, but I expect it would go against it’s sensible mantra of being agnostic about such things (for its long term sustainability) so I doubt it does that.

    Personally I wouldn’t say $5 eCPM isn’t bad… I have experimented with some niches with disastrously low payouts, way below that level.

  8. Peter Says:

    Great post Jim, answered some questions that I had as well about the eCPMs as traffic grows.

    Paul – I’m in a similar niche – Christian Personal Finance and my eCPMs are higher than yours, but I think it’s because I focus on writing more search and adsense focused content that I know will do pretty well with adsense. In my opinion – it’s all about content, what you’re writing about, and what types of posts have the highest paying advertisers and clicks. Another Christian PF site that does well with adsense – Christianpf.com. Bob does a lot of great writing as well, and I think his site is a good one to check out if you’re wondering how to optimize your content for some monetary return.

  9. Peter Says:

    p.s. Thanks for your comments Fred – your blog is one of my daily reads! 🙂

  10. Paul Williams Says:

    @Monevator – Thanks for your comments. That’s good to know.

    @Peter – Thanks for the tips. I’ve been looking at this going forward, and I’ll be a little more focused on content that will be better for Adsense. I’ve been working on mostly foundational articles since I started the site in June.

    I put together a new posting plan that will still allow me to focus on what the Bible says at least once or twice a week, but the other posts will be on broader PF topics. For example, I’ll be starting a series on how to get out of debt.

    I’m also planning to start incorporating some reviews with affiliate links but a lot of the advertisers I applied for on Commission Junction have denied me.

  11. jim Says:

    When an affiliate program denies you, try to find out why. Oftentimes they deny you for a reason that no longer applies or is flat out wrong…

  12. Paul Williams Says:

    I tried to find out how to contact them, but I couldn’t find it in CJ. Do you know where that info is?

  13. Paul Williams Says:

    I found contact info for three of the advertisers that denied my application, but I can’t for the others.

    After reading Peter’s article today about starting a blog and some other people’s advice, I’m beginning to wonder if I’ve already messed up too much. I’m not even sure if my theme is halfway decent. It’s a free one that I tweaked myself, but sometimes I feel like it looks outdated compared to most websites.

  14. jim Says:

    I wouldn’t worry about the theme so much, just keep networking, writing, and you’ll be rewarded.

  15. Fred @ One Project Closer Says:

    I’m a little late getting back to this stream.

    @Peter – No prob – I like the way your site has evolved over the last 2 years, particularly the updated theme… not sure when you implemented it but I definitely like it (especially the green – gives with the money theme and all)…

    @Paul – “I’m beginning to wonder if I’ve already messed up too much.” — LOL!!

    You MUST be a blogger if you’re thinking that. We’ve all been there. “Man, I should’ve…” or “I’ll never be as big as …. ” or “Advertisers will never want me because…”

    Yada yada yada …

    Lesson #1: You will screw up constantly. It’s an opportunity to learn. I got a portion of our site banned from Google from using too many affiliate links in posts. Lesson learned. I got very frustrated for about 4 weeks – wanted to throw in the towel. Now, 11 months later, the site makes more than double what it did before that time.

    Lesson #2: If you aren’t screwing up, you’re doing something wrong. You’re not pushing the limits enough. Jim has a great article on this:

    http://www.bargaineering.com/articles/get-towed-twice-a-year.html

    If your blog isn’t “getting towed” twice a year – or heck, four times a year, you probably aren’t trying enough things.

    Lesson #3: Learn from others. Watch what the big bloggers do. Emulate them. There’s a reason they are the “big bloggers” – it’s because they know things. In my opinion, it’s better to avoid reading the “make money online” sites – there’s too much static. Not all the advice is bad, but its hard to weed out the good from the bad. Instead, watch what other bloggers do. I’ve been watching Jim for 2 years on Bargaineering. I take the concepts he implements in PF and apply them to Home Improvement.

    Seriously… Keep your chin up. There’s a lot of money to be made online, and it grows every year. You’ll get your slice if you’re persistent.

  16. Paul Williams Says:

    Fred, thanks for the advice and encouragement! I’m starting to get a better handle on some of these things – thanks to Jim and some other bloggers. It’s good to hear I must be doing something right – even if it’s just because I’m realizing what I’ve been doing wrong!

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