I wonder if having lots of people site target your website will cause Google to improve your CPC and factor it into smart pricing?
That could be the reason. I have a website of mine that supposedly dwell on high-paying keywords but I still get measly income from it. Maybe Google still looks at your PageRank or how popular your site is, before they start putting more expensive ads.
I can't say for sure whether they do or don't do this, but I can't see any reason why they would do this. Why would they not want to put the best paying ads on every single page they can?
Because there are alot of sites that exits just for the sake of adsense, so i guess to save the advertiser being ripped they give consideration to high ranked sites just a thought only a person from google can answers this best.
What matters to advertisers, and therefore Google is conversion rate - the percentage of people who click on an ad actually end up doing what the advertiser wants (buying something, signing up for an email, etc). Google adjusts the CPC paid to publishers based on what they determine they think the conversion rate for a site will be. So, if a "made for AdSense" site gets bad conversion rates, smart pricing will kick in and they will get a lower CPC. To me it still doesn't make sense to display ads with lower bids or CTRs on site that it determines to be of poor quality somehow. They still want to make the most money they can so they display the best performing ad and then punish sites appropriately with smart pricing.
Yes. Smart for them not for you. And maybe higher paying ads will tend to show up on other sites too.
No, Google does not get a larger revenue share. They lower they price that they charge the advertisers. So if someone clicks an ad on a site that Google considers a high conversion site the advertiser pays more than for a click on a site with low conversion.
After becoming an adwords advertiser I just don't think that's true. If it is, then how do you get those clicks? Other than CPM if you have a low bid you will get deactivated. We might like to give google the benefit of the doubt, but they're in it for the money and smart pricing is just an excuse for them to bank money left on the table by webmasters with little clout.
the minimum bid for each keyword is $0.05 right? Is any adword advertiser pay lesser than that? I know lots of adsense publisher get $0.01 per clicks and my bet is, google get the extra $0.04 from the "smart pricing"
The minimum bid on AdWords is $0.01 now. I have played around with AdWords and I regularly get click for less than my bid amount, even at bids under $0.05.
Supposedly. I haven't noticed this happening, but I'd like to think if you have multiple units, they will only put cpc on the lower performing units (i.e. the ones that are buried on the bottom of the page, etc..)
I don't think so. (It might, but I have seen no evidence of that.) Its not the CTR that matters, but what the person does AFTER they click. Smart pricing is all about "Conversion". Conversion does not equal CTR. A click is "converted" if the person who click ends up buying something because of that click. If clicks from your site are likely to have a low percentage of conversion, Google lower the amount they charge an advertiser for clicks from that site. Here is Google's description of smart pricing. Remember this is written for AdWords advertisers: This seems to be one of the most difficult concept to grasp in the AdSense/AdWords system. You might want to view my blog post: Determining Earning Per Click for my attempt at explaining what goes into pricing any particular click.