How To Estimate The Value Of A Keyword

The value of a keyword will always vary greatly and there are way too many factors to come up with a 100% accurate formula. Still, I wanted to share a formula that I learned as newb on how to estimate how much you can earn with any keyword via Adsense. (Some of you might recognize this.) Keep in mind that this only for estimation purposes to see if a keyword will be worth your while.

(Exact Monthly Searches * 0.4 * 0.05) * (CPC * 0.68) = Keyword's Monthly Earning

So if you are looking at a keyword with 5000 exact searches and a $1 CPC, you could expect to make:

(5000*0.4*0.05)*(1*0.68)=$68/month

For many people, they get to #1 in Google and wonder why they are not making enough money to quit their job and buy a new house. It is either because there is not enough traffic or because that traffic is not very profitable or both.

This formula makes a few assumptions:

1) It assumes that the keyword tool you used to do research is giving accurate data about traffic and CPC.

2) It assumes that when you reach #1 in Google that 40% of all searchers will click on your site. This is the 0.4 in the equation.

3) It assumes that 5% of those who click on your site will click on your ads giving you a 5% CTR. This is the 0.05 in the equation.

4) It assumes that Google will give you 68% of the click payment since Google says that this is what they will do. That is the 0.68 in the equation.

There is a lot of room for variance in all of these assumptions which is why it should be used for estimation purposes only but I found it very useful when I was starting out and I thought others might as well.

Another great share.

(I usually HATE it when people make comments like this, but this thread needs to be bumped. It's that good.)

Definitely a great share. Clarified quite a bit of information for me. Thanks for taking the time to write it up.

How did I work out the CPC for a keyword?

What you say is exact. Thanks

That's a pretty neat equation you've got there.

Of course, if you want to make substantially more money online, always diversify your blueprint. There's more to just adsense cash

This is a tool my company built a while back. Enjoy.


There are 2 algorithm versions. I suggest you run both models to get the best idea. Algorithm 2 is based on the latest CTR data.

the_demon said:

This is a tool my company built a while back. Enjoy.

http://verdadmedia.com/tools/roi-calculator.php

There are 2 algorithm versions. I suggest you run both models to get the best idea. Algorithm 2 is based on the latest CTR data.

Click to expand...

That's pretty nifty. I ran the numbers for several of the keywords I'm at #1 for and the actual earnings are usually right between the two estimates so it provides a great estimated range.

trustedfire9 said:

(Exact Monthly Searches * 0.4 * 0.05) * (CPC * 0.68) = Keyword's Monthly Earning

let's test that , adsense sites my next project .

@ op do you think this formula works with non english keywords too ?

Click to expand...

For non-English sites you'll want to look at the local search results, not the global search results. I look at local most of the time anyway and consider anything additional a bonus.

edit: I'm not sure what I said is true about having to use local. But yes, the formula will still give you a decent estimate.

Wicked thanks