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Google Adsense Terminology – What You Should Know

google-adsense-terminologyJumping into the world of ad networks can be a bit confusing at first. There are new terms and strange letters like CPM that make zero sense to you at first glance. The following is a terminology help guide which will explain what everything means so you can feel confident and hopefully increase your income at the same time.

1. Channel
When creating your ads, custom “channels” can be set up at the same time. A Channel is like a category that you can assign to certain ad spots so you later track each Channel’s performance. You might name one Channel “Your Site Name – Top Banner Position” or something to help distinguish that ad placement from the others. A Channel name can be whatever you want it to be.

2. Page Impression
Page Impressions are the number of times a user views a page that contains Google ads. A new impression is generated whenever a page is loaded up that contains an ad.

3. Clicks
Clicks are the most income-rewarding actions on the Adsense network. A Click is exactly what it says it is… a click from a user.

4. CPM
CPM means Cost Per Thousand Impressions. The CPM rate is the amount the advertiser will pay for every 1000 ad impressions. With this number, you can tell which ad units are doing the best.

5. eCPM
eCPM means Effective Cost Per Thousand Impressions. eCPM estimates your earnings for every 1000 ad views you receive. eCPM is calculated by dividing total earnings by total number of impressions in thousands: eCPM = (total earnings * 1000)/no. of impressions. The Adsense blog goes into further detail:

For example, let’s imagine we have two custom channels named ‘Blue Skyscrapers’ and ‘Red Rectangles’, respectively, which reflect the types of ad formats we’re testing on our site. During our test, the ‘Blue Skyscrapers’ channel receives 370 page impressions and $1.48 in total earnings. The ‘Red Rectangles’ channel receives 187 page impressions and $0.97 in earnings over the same period. To make these figures more comparable we calculate eCPM — i.e., the estimated earnings for every 1,000 impressions received. We find that eCPM for blue skyscrapers is $4.00 while the eCPM for red rectangles is $5.18.

This means if we received 1,000 impressions of blue skyscrapers, we would earn roughly $4.00. But for 1,000 impressions of red rectangles, we would earn about $5.18. Therefore, assuming that our sample size is large enough, it is to our advantage to switch to red rectangles throughout our site because they generate more revenue per impression.

6. CTR
Page CTR stands for Click Through Ratio. This is a percentage of Page Impressions that lead to a click on an ad. For example, if you have 100 impressions on your blog page, and 10 people clicked on an ad, your CTR is 10%.


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