In this blog post, I want to teach you guys about some fundamentals of the ads, how you make money, the rates at which you make money and some basic definitions used in earning through ad revenues as an Adsense program partner.
So here are the fundamentals which I have listed below for your better understanding.
CPM: CPM stands for Cost Per Mile where mile is a Latin word meaning thousand. So it is the revenue that you will earn after 1000 ads will be shown in your blog/website or on your Youtube Channel. Let us assume my blog has a CPM of $2, then for every 1000 ad views placed by the advertiser in my blog or Youtube channel I get paid $2. The CPM can vary according to the region and the amount advertiser is willing to pay you for showing their ads. So in developing countries and most of the Asian countries like Philippines, Thailand, Indonesia, Malaysia, India, Nepal, Srilanka, Pakistan, and so on the CPM can vary somewhere between $0.5 to $2. It is my personal experience and my CPM in these countries was never more than $1. Whereas, CPM ranges from $2 to $6 on countries like USA, UK, Australia, Canada, etc. I don't know what factors are responsible for these CPMs though. In my personal case, I have acknowledged CPM as high as $25 in Finland and $30 in South Africa back in the days. So higher CPM results in decent earning if we can generate thousands and thousands of traffic on your blogs or Youtube videos.
CPC: I hope you guys are familiar with the term CPM by now but what does CPC mean? Well CPC stands for Cost Per Click. Back in CPM we only talked about people viewing your ads without any action but in some cases, your audience like what products are being sold in the ads and they click the ad shown in your blog or videos. Then you get a bigger share of the revenue. Back then in CPC, you used to get say $2 for a thousand ad views but if the ad shown gets clicked in your platform (Blogs/Videos) then you may earn somewhat between $0.5 to $1 per ad click. Which means if you get 100 ad clicks in a day on ads shown on your platform. KABOOM, you will earn $100 in just a single day by 100 clicks assuming CPC of $1. Are we clear now? If not let me know in the comment section below. 😉
CTR: Well those two topics CPM and CPC which I just described earlier is a money making way whereas CTR is a ratio which shows how often ads get clicked in your platform. Basically, CTR means Click Through Rate. It measures the ratio in which ads are being clicked to the ads being shown in your platform. Let me clarify it to you.
Let us say you get 5 clicks out of 100 ads shown in your platform then using simple mathematics, your CTR is:
CTR=(5/100)*100% = 5%
Oh! And I forgot to mention that CTR is measured in percentage.
I hope this article helped you guys in understanding the basics of ads in your blogs and youtube videos. If you like this article and hope to see more of my articles then keep checking out my blog posts and let me know in the comment section if you guys want me to write next blog post on how to make money from Youtube.
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