Unlocking the relationship between CTR and earnings

Here's an AdSense mystery worthy of intrepid detective Veronica Mars: Why are increases in clickthrough rate (CTR) sometimes accompanied by decreases in earnings per click?

Occasionally, we hear from publishers who are perplexed that their earnings don't change despite an increase in CTR. This phenomenon can seem inexplicable, and when it happens, publishers may suspect that 'smart pricing' has taken effect, or that Google is making revenue share changes. What's really going on?

AdSense is unique because it's designed to maximize eCPM for our publishers, taking into account both the advertiser's cost-per-click (CPC) bid and the likelihood that the ad will be clicked. Some ads are attractive to a broad range of site visitors and will be clicked on more frequently. While this can be great for your CTR, advertisers are often bidding less for these kinds of broadly targeted ads. Other ads are attractive only to a small niche of users. Advertisers will typically pay more for these tightly targeted ads, but those ads are also less likely to get clicked.

Depending on ad inventory, you may see some days on which AdSense will show a lot of high CTR/low CPC variety ads. On other days, you may see the reverse. If you see this correlation in your own AdSense reports, keep in mind that we're always working hard to maximize revenue for our publishers. One aspect of that is being able to best take advantage of the earnings characteristics of different kinds of ads.

Posted by Bryan Vu - AdSense Optimization Team