Analytical - web analytics for blogmasters

If discussions in the blogosphere are any indication, a lot of bloggers (including myself) worry overly that their visitor count or pageviews or ad clicks went down in the past 7 days. Instead of worrying about the short-term, look at the big picture and do a bit of forecasting.

Of course, there’s no way that I or anyone can guarantee that you will make a specific amount of money by a certain date, except possibly by cheating. Since we don’t want to do that, the best we can do is calculate some possible earnings based on our blog’s historic data.

Steve Pavlina, a popular “personal development” blogger, has written several times about how he went from making $4/d to $200/d in contextual advertising revenue (from Google), as well as increases from other revenue streams, in just 12 months. (Although if I understood correctly, it took Steve 7 months to get to $4/d.)

Think about this increase for a second. How much daily, on average, did his AdSense earnings have to increase by to go from $4/d to $200/d? It’s simple math, and you can use it on your own earnings and traffic data to calculate some possible scenarios, then set a few goals. But I’ll warn you ahead of time that if you haven’t blogged for at least 6 months, the forecasting here will probably not be worthwhile. You need enough background data to forecast.

This is a lengthy post, so for those of you with no patience, a formula is given below. I’m using Google AdSense earnings, but the formula applies to any pay-per-click advertising.

CDE = current daily earnings, in dollars
DDE = desired daily earnings, in dollars (your goal amount)
DRC = daily revenue change = DDE - CDE
days = approximate time in days to reach DDE (your goal days)
aCTR = average click-through rate (percent), over 6 months or longer
aCPC = average CPC (Cost Per Click) over 6 months or longer
aDCI = average daily ad clicks increase
aDEI = average daily earnings increase
aDPI = average daily pageviews increase
	
aDRC = DDE - CDE
aDEI = aDRC/days
aDCI = aDEI/aCPC
aDPI = 100 x (aDCI/aCTR)

Notice that this formula doesn’t really satisfy the question in the title of this post. To do that involves more complex math that I don’t want to get into just yet on this blog. Instead, you can set your own goal date and see whether or not you can achieve the necessary traffic increases. For those of you that want some explanation of how to use the above formula, continue reading.

Let’s just use Steve’s example and assume that you’re already making $4/d. (You can substitute your own values later.) First, start by calculating the change in daily revenue over 12 months: DRC = DDE - CDE = $200/d - $4/d = $196/d. Now we average out the increase over that 12 months, which is approximately 30 d/m x 12 m ~= 360 d. Don’t worry that we’re not using 365 d; we’re approximating. So, Steve’s required average daily increase is aDEI = 196/360 = about $0.54.

Understand what value we’ve just calculated. Steve’s daily earnings had to increase over the previous day by an average of $0.54 every day. That means that if he made $4.00 today, tomorrow he would have to make $4.54, and $5.08 the day after that. Of course, that’s on average. You might actually make .27 tomorrow and (2x.54 - .27) = .81 the day after. But since we can never predict that, average changes will have to do.

Sounds hard to have to earn a certain average amount EXTRA every single day to reach our daily earnings goal. But it’s really what things boil down to. It’s the same for any business, but most business owners aren’t as obsessed about statistics and forecasting as bloggers seem to be. (Although these forecasting formulas apply to any business.)

Steve Pavlina, Darren Rowse, Yaro Starak, and other bloggers have proved that it’s possible. Can you do it too? Maybe. (Read Steve’s How to Make Money From Your Blog, Chris Garrett’s Can Anyone Make Money From Blogging?, Darren’s 10 Reasons Why Many Blogs Don’t Make Much Money, and Yaro’s Analyzing Key Metrics in Your Web Site Traffic Reports - Part 1 and Part 2.) If you think you have what it takes to eventually make a living from blogging, then let’s continue.

As I’ve mentioned above, to forecast, you should have at least 6 months worth of your blog’s traffic data. If you’ve been blogging steadily for less than that, you really shouldn’t even bother with this exercise. You need some solid historical data. A year is better, but who wants to wait that long, right?

Now for the hard part: estimating how much traffic increase you’ll need to make that extra $0.54/d, in our example above. Here’s the part where your historical data comes in necessary. Google AdSense’s TOS (Terms of Service) require that I do not reveal any real data, aside from gross earnings and gross pageviews. So the rest of the example uses made up data.

Suppose that you have 6 months (180 days) of historical data, and that this data shows that your long-term average earnings per ad click is about $0.10. You can calculate this value, aCPC, by dividing your total legitimate pageviews over 6 months (or whatever you have) by the total number of legitimate clicks. So if you have had 10,000 pageviews and 350 ad clicks over 6 months, your aCTR = 350/10,000 = .035 x 100% = 3.5%.

Since our aCPC is $0.10, and we want to make an extra $0.54 (aDEI) every day, our aDCI = DRC/aCPC = 0.54/0.10 = 5.4 clicks increase every day.

That means that you will need to gain an extra 5.4 clicks, on average, every single day. So if you had 10 clicks today, you’ll need 15.4 tomorrow, 20.8 the day after that, and so on. Of course, you can’t get partial clicks, so for the sake of argument, let’s say that our daily click count has to increase by 6 every day. Simple calculation, right? But we’re not done yet.

How do we get those extra clicks every day? Obviously, our traffic has to increase every day. So by how much, on average? Since we’re never really sure how many pages a particular visitor will view in a given visit, let’s use pageviews. We need to calculate the average daily pageview increase: aDPI = 100 x (aDCI/aCTR) = 100 x (6 clicks/ 3.5 CTR) ~= 170 pageviews. That is, if we had 100 pageviews today, we’ll need on average 270 pageviews the next day, and 440 pageviews the day after.

You can now replace the values used here with your own. The question you have to ask yourself is whether you can achieve the necessary daily increase in pageviews. In the above example, we’ve calculated that for our blog, we’ll need 170 extra pageviews each and every day. If our blog’s real average increase is only 10 pageviews per day, either it’ll take us 17 times longer to reach our goal, or we have to come up with some way to increase pageviews more rapidly (and legitimately).

That is something that is beyond the scope of this blog. I’ve pointed you at several blog articles (links above), and I’ll point you at one of the most valuable I’ve read: Steve Pavlina wrote a post on building website traffic, where he says that it’s not necessarily the number of blogs you write, or the number of articles you post daily, but the value you offer to your readers in your posts.

That means that writing 10 blogs instead of one may not get you to your goals any faster. In fact, I highly recommend that you write one blog and build it up first before starting another. Don’t make the same mistakes I made.

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