Adsense Smart pricing

Posted on Nov 6, 2008 in AdsenseAdvertising
Many Adsense publishers are facing low money per click problems. One of the reasons for that is Google’s so called ‘Smart pricing’. I have been suffering from it myself. If you receive around 15 cent per click then you get around 5 when you got smart priced.The money you earn per click varies, depending on different factors. However, the main factor is the niche. There are niches that payout more and niches that pay less. The lawyer niche for example is known for high payouts and the fun niche for low payouts. Nonetheless, when you get smart priced by google your earnings per click lower drastically.I was earning around 15 cent per click on my gaming forum. Relatively good if you ask me until I noticed some day that the value per click dropped to 3-5 cent per click. That means only 30% of the earnings before. I was and am still a little disappointed about that. I dedicate this article to explain smartpricing and help you to get out of it. Keep in mind, it is nothing that you can do within a day, it will take at least 1-2 weeks until you notice changes….Smart pricing was introduced by Google to protect the advertisers. The advertisers are investing money and expect a certain return when they invest (ROI = Return of Investment). Once the advertisers earn less money google reduces the price of the advertisement to make sure that the advertisers are getting money out of their investment. They do that because they want them to to cancel investing. If they get no money out of advertising they would simply stop advertising at all as they do not benefit from it. Google wants to help them by lowering the price of your advertisement. In fact, you have no influence on whether the advertisers earn something or not….What sites are commonly influenced by smart pricing?-Websites that have general content. -Websites with extremely low conversion rates after clicking on ads (website’s with young readers) -Forums in generalWhat Google says about smart pricingThe true algorithm of smart pricing is unknown, however, the adsense publisher team wrote the following on their blog:
1. Many factors determine the price of an ad 2. Clickthrough rate doesn’t affect advertiser return on investment (ROI) 3. Google doesn’t make money from ‘smart pricing’ 4. Remember the old chestnut: “Content is King”
… Did you learn something from that quote? No me neither. Google always had the worst support… The only thing that helps us is point number two. Many people think that the CTR influences the price of the ad. No, why should it? Even Google says it is no factor at all because it does not influence the ROI. You get paid per click, if you experience lower clicks then you get less and the advertiser also has to pay less. If you have CPM Ads on your site then the clicks might be a factor for the ECPM but for CPC ads, no, that would be very unreasonable.Ads only not on general pagesContent is King yes – that is something you should always have in mind. I had my advertisements in all forums on my gaming forum. Some of those forums were general (those forums where people can chat etc.). I removed all Adsense advertisements from general and offtopic pages to see if that would change anything. Same applies to blogs as well of course, remove your ads from your personal content. This just an example for forum owners to remove ads from general forums (vbulletin forum): Open up your templates and place the following around your adcode.<if condition=”in_array($forum['forumid'], array(1,2,3,6))”>your google adsense code</if>The code will only show the advertisements when the user is in the defined forums. Replace the numbers with your forum IDs. You can see them in the vbulletin forum manager if you hover over the forums. The number at the end of the link is the forum-id. If you want to show the code when the users are not in the defined forums then simply write a ! infront of the in_array. (!in_array…..)That way I filtered my advertisements only to the most niche related forums (In my case that is World of Warcraft). After 2 weeks I have not noticed any changes in the adsense revenue. I have been smart priced before and the way I got out of it was by removing all google adsense advertisements from all my pages. I did that for around 3 weeks and then noticed higher revenues on clicks.If you are running a blog and experience the smart pricing phenomenon then try to only place adsense on relevant pages. I sometimes write about current political events – if your blog is not related to that niche then you will want no advertisements on such pages. That could be a reason for getting smart priced.The true factors of Smart pricing• your websites niche relevancy • conversion rate (how many people buy something after clicking the ads) • advertisers ROI (return of investment) – higher conversion rate => higher ROI • Authority (because advertisers bid more for having an ad on your site)I can not think of other factors that could influence smart pricing. Keep in mind, google tries to help the advertisers. Unfortunately that does not really help the publishers – we generate the traffic with our websites…How to get out of smart pricingSmart pricing depends on the ROI of the advertiser. You can only influence the ROI by increasing the conversions after someone clicked your advertisement. That is in fact very difficult, because on the advertiser’s website you simply can not adjust or tweak anything. So to make sure your conversions are as high as possible you must put Adsense only on niche-relevant websites. General websites get general ads which perform poorly. Those ads are the reason for getting smart priced, so that’s what we want to avoid. • Remove Adsense completely for 20 days. That will un-smartprice you. • Until then work together with another advertsing program • Once your 20 days passed put your Adsense back on, but only on the most relevant pages! • Use section targeting to make your ads more relevant. • Use Adsense channels to keep track of changesSo, good luck and let me know if my tips helped you! All in all, google really needs to do something to make smart pricing fairer. With Smart pricing Google Adsense seems to be no longer a CPC program. The conversions matter and conversions should actually only be a factor for CPA programs.