People always ask me why Google AdSense earnings change so much or why there's such a drastic increase or decrease in the click through rate (CTR) or RPM (revenue per page.)
The first thing you have to understand about AdSense is that how much you earn is directly dependent upon how much the Google AdWords advertisers are spending.
The ads that appear on your site are being paid for by the advertisers.
There is an auction that takes place where the advertisers choose a maximum bid. This auction determines what ads show on your site and the cost of the ad. As you can imagine, this can change drastically from day to day or month to month.
The only thing you know is you receive roughly 68% per click, but ad prices change all the time.
Here's another thing...
AdSense earnings are often seasonal -- meaning you may notice lower earnings during Christmas time or the summer months. If the advertisers are spending less, you are going to earn less.
So don't panic if your traffic is roughly the same but you notice a big drop. This is normal. It could be seasonal or just the fact the auction has caused prices to change.
So you should never come to expect a certain amount from AdSense -- ever. In fact, I hope you are not depending on this income because it will change often.
I cannot emphasize enough how important it is to diversify your income and find other ways to make money from your site.
How Do I Increase My AdSense RPM?
I briefly mentioned revenue per page (RPM) above. That is calculated by...
Estimated earnings / Number of page views) x 1000
And of course, your estimated earnings depend on how many clicks your ads receive. The higher your click through rate, (which is calculated by the number of clicks / Page Views), the more you are likely to earn.
An increase in clicks is also likely to improve your RPM.
Here's an example...
If your RPM is $4.00 that means for every 1,000 page views, you're earning $4.00 on average. So you could look at that number and estimate that if you were to get 10,000 page views that day, your RPM could be around $40.
Notice I said "could be." That's only an estimate because the amount you earn per click changes all the time.
So I'm hoping you can see why it's tough to estimate your earnings and you see how they increase and decrease all the time. This is normal.
Since we as AdSense publishers don't know what the advertisers are paying and we don't know how many people are going to click; compounded by the fact the amount you earn per click will change -- your earnings can bounce around.
Here's a video where I talk more about RPM and other ways you can use that number.