Here it goes.... Let's say you got smart priced...From what I have understood smart pricing reduces your cpc in case the advertisers don't make enough money...In case the advertisers start making money will you get un-smart priced ?And in the event they start making extremely more money will you get something like the opposite of spart pricing?in other words an even greater cpc increasement ?
Smart pricing is thought to be recalculated every week and based on the performance of your entire account, not per site. If an advertiser bids a maximum of 50 cents per click, the maximum you can get is based on their maximum bid (less googles cut which is around 25 to 30%). If your account is not considered a good converting site, the advertiser can be charged a lot less than their maximum bid, which of course results in a lower payout. No matter how good your account produces, the advertiser is never charged more than their maximum bid. Advertisers can also opt out of the content network (ads that run on regular publishers sites) or set lower bid for the content network. The highest paying ads generally run on google search or the google network and those ads will never show on your site no matter how well it produces.
Is this the case only when an advertiser choses separate pricing for Search and Content ads? I don't think Google hoards the good ads with limited budgets to search and their network.
The smart pricing does not work to googles favour i.e. they do not take a bigger cut. The advertiser benefits from given lower cost from people clicking to their sites.
Correct, but the high prices you often see posted are almost always for bids for the google search or search network. There is a high percentage of advertisers who won't touch the content network, or set much lower pricing if they do, because of lower performance and click fraud. Google doesn't disclose seperate bid pricing for the content network, but bids can be drastically lower. This causes a lot of confusion with many publishers because they see a top bid of $8 for a keyword (or whatever) yet the content high bid might be $1 or 50 cents for the same ad - and that can even be smart priced. The maximum an adsense publisher could get is 50 cents, less googles cut.