AdSense topics that pays the most

Another of those questions came up on SitePoint today.

"Does anyone know what types of websites does Google Adsense pay more than $1.00 per click?"

One of the posters I respect the most, Kenneth L. Barbalace, (website) made a very good comment on the issue:

Its not about what types of websites, as much as what topics. Some pages on the same site may average $0.05 while other pages on the same site may average several dollars per click. On top of this the average ppc will fluctuate wildly for any topic througout the month and year.

Instead of asking what types of sites pay the highest amounts, you need to ask yourself what topic do you know the most about and are you most interested in. Then build a site based on this topic. While it may take time to build the traffic levels necessary to earn much money, it will be much more rewarding.

There are no shortcuts to making lots of money with Google AdSense or any other form of banner advertising.

I agree with KLB (as I mostly do, he's a very smart man), but I'd like to extend on his argument.How much clicks in a topic is worth is directly related to two factors:

1. How much competition there in in the relevant market.
2. How large the profit margins are in the relevant market.

I.e. If a market has large profit margins (i.e. low costs associated with each product/service sale) and has high competition (most likely due to the large profit margins), the Google Adwords ads will inevitably be very highly priced. This is, of course, because the advertisers can afford paying a lot, and MUST pay a lot to be seen.

Now, because the area is so competitive, that means the site you will create about the topic will also have lots of competition. The higher the cost per keyword, the more intense competition you will be facing. The highest paying keywords have so fierce competition that it is incredibly difficult to enter that market because competition is so fierce.

So, while shooting for the most profitable market might seem like a good idea, it is not, becasue everyone else and their mother also think it seems like a good idea.