Main adsense terms :These terms are page impressions,
clicks, page CTR, page eCPM, and earnings

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The first step is knowing how the figures reported in your account (such as eCPM, CTR, and page impressions) interact to describe your total revenue. Think of each number as a variable in the revenue formula for your site. At the highest level, you can calculate revenue by multiplying your page impressions by the effective cost-per-thousand impressions (eCPM) and dividing by 1000.

Revenue = Page Impressions * eCPM / 1000

eCPM = Revenue / Page Impressions * 1000

The eCPM metric provides an estimate of how much revenue you can expect to earn for every 1000 page impressions. For example, if you serve 10,000 page impressions and earn $40, your eCPM is $4. If page impressions increase to 30,000, you can predict that you'll earn $120 given the $4 eCPM.

Most AdSense ads pay on a cost-per-click (CPC) basis, so eCPM is really a measure of your average ad performance. Breaking eCPM into the click-through-rate (CTR) and the average cost that advertisers pay per click (CPC) gives you a more accurate measure of performance.

Revenue = Page Impressions * CTR * average CPC

Once you know your average CTR and your average CPC, you can predict how much revenue you'll earn for a given amount of page views. You can also analyze your revenue by looking at placement-targeted ads versus contextually-targeted ads.

Total Revenue = Revenue (contextual) + Revenue (placement-targeted)

While contextually targeted ads always pay per click, advertisers can pay for placement-targeted ads by impression (CPM) or by click (CPC). To account for both of these bid types, you should look at the average eCPM for placement-targeted ads. More simply, you can just add placement-targeted revenue to your contextually targeted revenue.

Revenue = (Page Impressions (contextual) * CTR * average CPC) + (Page Impressions (placement-targeted) * eCPM (placement targeted) / 1000)

Revenue = (Page Impressions (contextual) * CTR * average CPC ) + Revenue (placement-targeted)

Even though we're looking at contextual and placement-targeted revenue separately, don't forget that these two types of ads compete against each other in the auction. We'll always show the best performing ad, regardless of targeting type, so more competition creates higher winning bids.

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