Sad news I’m afraid for fans of Online Advertising Answers – this will be our final edition. So to go out with a bang I’ve gathered some of the most popular answers I’ve ever written for one final round-up. Let’s look again at the interaction with CTR and CPM on Facebook Ads and why you should start with AdSense.
And finally, the thing I have been asked to explain the most times: the difference between page CTR and impression CTR. It’s simple but for some reason, no one gets it right away – so try to take this answer in as I won’t be saying it again.
For one final time. You asked, I answered.
Let’s dig in.
This month’s questions are:
- Why is my CTR amazing, but my CPM is awful with Facebook ads?
- Is Adsense the best way to monetize your blog? If not, what is?
- What is the difference between page CTR and impression CTR? What is the best CTR to earn good money?
[Click these links to skip down to the question]
Q: “Why is my CTR amazing, but my CPM is awful with Facebook ads?”
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A: “Hi Luke,
You are probably getting an amazing CTR and awful CPM on Facebook because a higher CPM means you are paying to access a ‘better’ audience.
It’s very likely that this audience is more expensive because there is more competition for it, and that there is more competition for it because it drives higher CTRs.
A low CPM probably means a low CTR
I’ll put it this way – Facebook doesn’t want to say no to your money, no matter how much you spend. If you pay a 10 penny CPM, they would ideally still want to take that money from you because they have so much advertising space available.
Facebook isn’t going to give you a good audience for 10 penny CPM though – at that price they’ll send you the audience that no one else wants.
And it’s likely no one else wants that cheap audience because they are very unlikely to click on ads.
Facebook saves access to audiences who are likely to click for the advertisers who pay more.
This is not only because they want to encourage those advertisers to come back, but also because over time the best audiences have been identified and are fought over by advertisers. This drives up the price.
It’s like with any inventory being sold – scarcity increases the price. In this case, the thing that is scarce is good audiences on Facebook.
CPC or CPA are better measures than CPM
You shouldn’t be too concerned with your CPM on Facebook anyway, to be honest. The number of people your ad reaches is a secondary concern to what your ad actually does.
If you are selling something or trying to get people to take an action, you should be working on a CPA basis. This means seeing how much your advertising costs you per action (CPA). To do this you’ll need to set up a Facebook pixel (unless you’re just running lead gen ads), which Facebook explains here: Help Center
Learn more about CPA advertising here.
If you can’t add a pixel to your site, or you are simply looking for clicks, then you should be looking at your Cost Per Click (CPC). This way you can still judge your campaign entirely on results.
A lower Cost Per Click means more clicks for your money, however again, Facebook will be sending the best clicks to people who pay more. There is a way around this though…
How to improve your CTR and CPC at the same time
There is an easy way to identify audiences that perform well for less money. It works on anything really – ads, age targeting, or whatever you split out.
It’s a simple metric I made up which I call VfM (Value for Money).
Click to enlargeSimply divide your CTR by your CPC.
[Or else you can use this Value for Money Calculator to save time and experiment with different scenarios]
How to use VfM to improve performance
Split out audiences into different Ad Sets, and then use this metric to compare them. What the VfM value literally means is the CTR you are buying with your CPC.
To put it another way, VfM means what CTR you get per $ you spend on a click.
The way it works is simple – if you increase the CTR then the VfM number goes up. If you reduce the CPC then the VfM number goes up.
It’s not really about the maths – more just about what changing the parts of the equation mean. Positive results for either your CPC or CPM make the VfM number higher!
You should be using CPA advertising if you can. If you can’t, this VfM formula will help you get more out of your advertising when you pay for clicks.
I hope this helps.
Justin“
[This question was originally on Quora]
“Is Adsense the best way to monetize your blog? If not, what is?”
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A: “Despite what many people on here say, the answer is yes.
While AdSense won’t make you the most money, it does give you the highest ROI as it takes very little time to set up, and no time to manage.
Most of the other answers on here seem to be trying to convince you to sell something, do affiliate marketing, or make courses. All of which are good ideas for making money.
If you just have a blog though, then the lowest effort/highest reward thing you can do is add Adsense to it – especially at the beginning.
Later on, when your blog is getting more visitors, you should branch out and try other things. To begin with, though, you should focus on writing a great blog and growing your audience.
Everything else is just a distraction. And it’s easy enough to be distracted from writing as it is, without adding a pressing need to become an expert marketer.
If your blog has no readers, it won’t matter if you’ve made an amazing course, or product as no one will buy them.
Spend as much time as you can on writing a great blog. Post on social media to promote it, gather email addresses and send out a round-up of your posts. Grow your traffic, and forget about monetisation for now.
More readers generally mean more money, regardless of the method you have of making money. So focus on that.
How much can you make from AdSense anyway?
For context – AdSense, on average, earns about $10 RPM. That means about $10 for every 1,000 pageviews – although that is an overall average, and individual blogs vary wildly.
You can use this calculator to work out how much you could make – it’s got a high, medium, and low estimate for your convenience.
Whether it’s $5 or $15 RPM however, this isn’t that much money obviously, but as I said – it takes almost no effort on your behalf after set up.
Other ad networks usually take some amount of management, just because they will let more dodgy ads through than Google. With AdSense, just choose the categories you don’t want on your site and block them.
When should you use AdSense?
It’s a good idea to set AdSense up early in your blog’s lifespan too so that Google has time to work out what type of ad works best on it and grow as you grow. It also means you can set it into your blog’s design and then not worry about it later (here is a quick guide on where to put your ads to make the most money).
If you’re trying to make as much money as possible online, and as soon as possible, then AdSense isn’t the thing that is going to get you there.
If you want to make a great blog and get paid for doing it (and are willing to put in the time to build up something great), then AdSense should be an early part of your plan.
I hope this helps.“
[This question was originally on Quora]
Q: “What is the difference between page CTR and impression CTR? What is the best CTR to earn good money?”
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A: “What is the difference between page CTR and impression CTR?
An impression CTR is the click-through rate for individual ads.
Page CTR is the click-through rate for a whole page – this includes all the ads on a page.
If you have three ads on a page, if someone clicks on any of them then this counts as a click towards your Page CTR. It will also count towards the impression CTR of the ad that was clicked on.
Because of this, you would always expect a Page CTR to be higher.
For example:
Your site has 3 ads per page which load every time. In one day you get
- 1,000 page views
- 3,000 ad impressions
- 10 clicks
To calculate your CTR, you can use this equation:
Click to enlargeCTR = Clicks divided by impressions (then multiply the whole thing by 100 to make it into a percentage).
In this example, your Page CTR is 1% and your Impression CTR is 0.33%.
Most of the time, you won’t have every ad on a page load for one reason or another so it gets more complicated than this.
[To work out your own CTR quickly and easily, you can use this handy CTR Calculator]
What is the best CTR to earn good money?
A CTR doesn’t earn you money directly, as people don’t pay based on CTR. If your site has a good CTR then it will likely encourage people to buy more ad space with you, however.
It will also mean that you are running CPC campaigns efficiently (as in getting the most clicks using the fewest impressions you can).
If you’re talking about a good Page CTR for ads on your site, then 1% is a reasonable benchmark – you should try to do better than this.
It entirely depends on your niche though I’m afraid – some sites hit 20%, but they are likely very niche sites with ads that exactly hit their users’ needs.
Just make sure you optimise your site so the ads aren’t too annoying (as people will start using ad blockers). This means don’t have too many ads, and if you use intrusive formats (like overlays or pop-unders) limit them to 1 per 24 hours.
Showing more ads will decrease your users, not increase your CTR. Most people will only click on one ad per page at most, so having lots of ads just means lots of ads don’t get clicked on (and your users get annoyed at loading times).
Also, make sure your site works well on mobile as well as on desktop computers, otherwise, your mobile site could really lose you lots of clicks.
I hope this helps.“
[This was originally on Quora]
I hope this has all helped,
Justin
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