I’ve been using Google Adwords to advertise my websites for over a year now, but I’ve kept my advertising budget as low as possible. However, I’ve been experimenting this month with different sized advertising budgets to see what effect it has on the number of visitors to my sites, and how much I earn through Google Adsense.
What I’ve noticed is that if I spend more on advertising, I make more. I’m not only getting my money back, but I’m seeing profits exceed what I was previously earning. Now, considering that I’m not selling anything, and the only money I make is through contextual advertising, I’m led to believe that I’m profiting from what’s known as ‘Google arbitrage’.
Arbitrage in this case is when you pay an ad with Adwords, and profit when someone follows your ad to your site and earns you more by clicking on a higher value ad. Of course, not everyone is going to do that, but the profits are large enough (in my case anyway) to make it worthwhile.
Earning money through arbitrage was not my intention though. I was actually hoping to speed up the process of getting my websites recognised. Currently, 20-30% of my visitors come back again, so by increasing advertising, I can rapidly increase the number of repeat visitors. Not only that, but I can get more ‘free’ advertising when people link to, or blog about, my sites.
The more popular my websites become, the higher they climb in search engine rankings. This will naturally result in more organic traffic which will eventually allow me to cut my advertising budget. Once I’m high up in Google’s rankings for the search terms my visitors use, then I can sit back and relax.
That goal is very achievable. I don’t consider making a fortune on the internet a pipe dream, but a realistic aim. It’s quite clear now that I can get closer to achieving that goal by spending money and bringing people to my sites as soon as possible.
I you’re reading this and you have your own website supported by Google Adsense, you may be interested to know that during my advertising campaigns, my earnings per click has increased. I figure this is because traffic coming through Adwords is highly targetted, making those visitors more valuable to the advertiser.
I’ll keep you up-to-date on how things develop. Oh, by the way, when I talk about my websites, I don’t mean this one. This is just my little corner of the web where I can freely express myself – not so easy to do in my Japanese world!
If you like, you can find me on Twitter at @nick_ramsay. I'd love to hear from you!