Insight into your earnings Part I: Explaining the ad auction

"Why do I earn more money from some ads and less from others? Why do my AdSense for content earnings vary from day to day, or week to week?"

If you’ve asked yourself questions like these before, you’re not alone -- we often hear from publishers that they’re unsure of how earnings are calculated and why their earnings fluctuate. As part of our efforts to be more transparent with publishers, we’re kicking off a two-part series to help explain these topics. With the help of Hal Varian, the Chief Economist here at Google, we’ll show you how ads are targeted to your pages, priced by the ad auction, and translated into the earnings you receive.

Today, Hal will introduce you to the ad auction for AdSense for content ads, and explain both what it’s for and how it works. Like a traditional auction, advertisers bid in our ad auction to show ads on your pages. The number and price of ads in the auction changes from moment to moment, based on how much advertisers are willing to spend and how they've set up their ad campaigns -- this is why we call our auction ‘dynamic,’ as these factors can then affect how much you earn.

If you’re ready to learn more about the ad auction and how specific prices are calculated, watch the video below and visit our Help Center.




So what can you do as a publisher to ensure you’re maximizing your earnings? Here are some tried-and-true tips to increase the amount of competition among advertisers in the ad auction for your pages.

• Keep creating high-quality sites full of original content to attract more advertisers, and use Google Analytics to see which content is generating revenue.
• Try adding popular advertiser formats such as the 300x250 medium rectangle to your pages.
• Turn your channels into targetable ad placements to help advertisers identify and target premium locations on your pages.
• Experiment to find the optimal locations for your ads, while making sure that your layouts won't generate accidental clicks.
• Help advertisers find your sites by claiming them in Ad Planner. You can add descriptions and categories that describe your content, which will help increase the visibility of your ad units to interested advertisers.

To understand changes in your earnings, we also recommend reviewing our two-part blog series, 'Diagnosing Revenue Fluctuations.'

That’s it for today. In Part II of our series, we’ll discuss how smart pricing affects advertiser bids in the ad auction, and clear up some myths about how it works.

Posted by Arlene Lee - Inside AdSense Team