Webmasters who have chosen to work with Adsense to generate income from their websites need to understand how volatile the whole Adsense system is. You cannot expect to earn a fixed amount of money with it and that’s in some way a curse and a blessing as well. This means you have the opportunity to get even more cash if you are able to grow your website’s traffic and conversion. However many times you will find that even though you are getting more traffic than before, you are either not getting any more money from the extra traffic or your adsense revenue is decreasing.
The hard work is not paying off and you’re getting frustrated and disappointed as well. This is why it is imperative to understand what may cause fluctuations in adsense income. Below is a list of the reasons why your adsense earnings might have dropped:
You have lost traffic
This means that your rankings as not as good as they were before in the SERPs. You will need to find which keywords have dropped from the search engine results pages and do more SEO work on them. If you have changed the content of your webpages (either by adding/removing text or changing theme/layout of your website), then you may lose your rankings as well. Many times changing the title tag could lead to drop in rankings.
You are being smart priced
Smart pricing is Google’s way to protect advertisers. If the clicks leading to an advertiser’s site are not converting for the latter, then you may be smart priced to compensate for the advertiser’s loss. For example, if mortgage ads are appearing on your site and the visitors clicking to the advertiser’s site are not filling out their mortgage quote form, instead of getting the usual $3 for a click, you may only get $0.50 for the same click. The advertiser defines the conversion that he wants to be actionable on his site and it can be anything from having a sale to signing up to his newsletter.
One way to combat smart pricing is to block the advertiser for at least a week. This works because smart pricing is reset or recalculated/re-applied on a weekly basis. If you do not tackle smart pricing, you may earn considerably less with adsense because one poorly converting ad can lead to your whole adsense account being smartpriced.
US dollars are getting weaker against your local currency
Many people do not realise that adwords accounts are managed in US dollars. So if you’re in the UK, you’re still going to pay in US dollars for the keywords you choose in your adwords campaign. As a publisher, unless you’re in the US, you are going to see your adsense earnings in your local currency, that is, the conversion from US dollars to whatever currency is local to you. This is done on the fly from exchange rates on the day you’re looking at your adsense report.
So if an advertiser was bidding $1.5 for a keyword and the conversion from US dollars to say British Pound was 1:1 (for the sake of simplicity), you will get £1.5 for that click. Now if the exchange rate changes and the British Pound gets stronger (US dollar weakens) and the new exchange rate becomes 1:1.5 which means you get $1.5 for each British pound, you will then receive only £1 for the same click instead of £1.5. Therefore as long as the US dollar remains strong against your local currency, you are fine but the time that it gets weak, you will see a drop in your earnings provided everything else stays the same.
You have seasonal content (Xmas, Easter, Mother’s day etc)
If your website has content which depends on the season, you will see a boost in traffic when that period approaches but when it ends, you will lose the visitors as well as the money. For instance, if you operate a site which deals with Chrismas, weeks leading up to Xmas will be really good for you in terms of keywords searches for Xmas but when that festival ends, you will barely see any traffic stemming from those keywords. Think about it – would you search for Chrismas presents in March? No!
Your website has content to do with trends
If you’re writing news articles, then chances are that when the news becomes outdated, you will lose the traffic. When something is hot or trendy, there are many searches for that particular keyword of interest. If you have content which talks about such things, then you would get a lot of attention from visitors which will nicely convert for you but as soon as the trend is over, you can forget about it all.
Adwords advertisers are stopping their campaigns or reducing their maximum CPC
Depending on what works best for advertisers, they may introduce new campaigns at different times of the year or pulling old ones out. If advertisers find that some months work better for them, they will stick to these months rather than having a campaign running throughout the year. For example, an advertiser will advertise only during March/April for Easter promotions and when that period is over, so will the revenue coming from these promotions. So if you don’t have the advertiser for the keywords for your content, you won’t make a single penny.
The second reason relating to advertisers is quite interesting. Since Adwords works on a bidding system, if there are more advertisers for the same keywords, you will get a higher CPC and if there are only a small number of competitors, then obviously, you will be paid peanuts. However sometimes advertisers may lower the Cost Per Click depending on the time of the day or country of origin for the click. This again has do to with what works best for the advertiser. A UK advertiser may reduce the CPC during night times because he knows there are not going to be any conversions at this time or he may decrease or reject clicks coming from outside the UK because ke knows foreigners will not buy anything from him.
Better conversion rate for the advertiser doesn’t mean more money for the publisher
Adsense tries to serve the ads which would give you the maximum revenue. This does not mean that the adsense ads which appear on your website are the highest paying ads for the keywords matching your content. Contrary to common belief, ads go through the bidding system to elect the highest bidder but at the same time are filtered down to the ones which have a better Click Through Rate (CTR). So you might be serving an ad which gives you 25% CTR but costs $2 a click rather than an ads which has a 10% CTR and costs $5 per click. A high CTR is good because it means the ad is contextually relevant to your content and will give you more money but if you get 100 impressions with a 25% CTR and making $1 per click, you’ll get $25 in adsense revenue compared to $50 for an ad which has a 10% CTR and costing $5 per click for the same number of impressions. So watch out for those supposedly higher CTR ads with lower value or placement targeted ads as they could be eating your income.
There are many reasons why your adsense earnings can drop and the reasons are the more common ones. I haven’t included targeting high paying keywords because I’m focusing here on why your revenue are decreasing rather than how you can make more with Google Adsense. If you’re in a niche with a relatively low CPC, it might be worth trying something else than adsense.