Well this is very important to understand, because without this you will never understand what kind of reader is your target. In Google Adsense revenue is generated for you when someone clicks on an Adsense advertisement on your site, you all know that; though other factor may imply too. Google charges the advertiser for the click thru and shares this revenue with you, as I mention that earlier in my other writing “Clicking your way Through”The amount you earn from an advertisement can be represented by the following mathematical equation:

Revenue/Advertisement =(Reveneue Per Advertisement)

Cost Per ClickÂÂ

X Click through rate

X Impressionsfrequency                                                               ÂÂ

X Partial pay out

X Web page traffic

• The COST PER CLICK is the price the advertiser is bidding to place an advertisement under the Adwords program. Google advertisers set a maximum price they are prepared to bid for keywords and they usually pay less than this. Well that’s the fact. Geo location wise cost per click is set too. So some clicks from India won’t make that much money, but just 1 click from north America will make double than that. So advertiser’s targeted population does matter.

• CLICK THROUGH RATE is the number of times the ad is clicked on divided by the number of Page impressions.

• IMPRESSION  FREQUENCY is the number of times a particular advertisement appears on your page (As we all know Google rotate Ad’s)

• The PARTIAL PAYOUT RATE is the percentage of its revenues that Google pays out to Adsense partners.This never mentioned in Google site, exactly what % they will pay us. However, as I noticed its between 50-70%.

• WEB PAGE TRAFFIC is the number of times your web page has been visited(Regardless of unique IP).

So to calculate your total Adsense revenue you need to evaluate this equation for each advertisement on all your web pages(every page you put the ad in your site) and add up the results. And, You can get most of these in Google Adsense report; try using URL channel base custom report to separate each advertising channel.

But some of these factors we can not control, such as Cost per click, Partial Payout Rate. Certainly rest of them we can manipulate, and if you control one side of the equation of a multiplying equation certainly you can manipulate its outcome.