Jonathan Leger – SEO And Internet Marketing Blog Internet Marketing Blog


High CTR = Low EPC explained

Conventional business wisdom dictates that the more of something you sell, the more money you make. If you make ten bucks on an item and sell five of them, you make fifty dollars. Sell ten and make a hundred. That just makes sense.

That's not how AdSense works. Finally, Google has officially explained why not on the official AdSense blog.

High CTR, Low EPC

Some ads are attractive to a broad range of site visitors and will be clicked on more frequently. While this can be great for your CTR, advertisers are often bidding less for these kinds of broadly targeted ads.

That's Google's official explanation. The shotgun method of advertising pays less because it draws a lot of traffic in but doesn't convert as well for the advertiser. A high click-through rate (CTR) therefore often translates into a lower earnings per click (EPC).

Low CTR, High EPC

Other ads are attractive only to a small niche of users. Advertisers will typically pay more for these tightly targeted ads, but those ads are also less likely to get clicked.

The flip-side is that you may be getting a low CTR but still maintain a high EPC because your ads are appealing to a niche crowd who are more willing to buy.

So is high CTR bad?

This announcement from Google might lead some to believe that having a high CTR isn't a good thing. That is a mistaken assumption.

Yes, a high CTR will often lower EPC, but you will still earn more overall. For example, if you earn $25 per one hundred clicks with a CTR of 10%, that translates into $0.25 per click. One thousand clicks is therefore worth $250, and it takes 10,000 impressions to earn it.

However, with a lower CTR of, say, 2.5%, if you earn $50 per hundred clicks (twice as much), that translates to $0.50 per click. Sounds great, right? But since your CTR is only 2.5%, that same 10,000 impressions that earned $250 in the former example only earns $125 in this example.

So unless you're earning a phenomenal EPC despite a low CTR, you're still better off maximizing your pages for high CTR.

Soapbox Time

It's nice to have an official proclamation from Google about something AdSense publishers have been speculating about. Those proclamations are few and far between for the "lowly" AdSense publisher. I mean, we only earn Google half its multi-billion dollar income. But that's no reason to keep us filled in...

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