Improved Smart Pricing I can see how it would be very easy for Google to automatically (or algorithmically) adjust the CPC for AdWords PPC ads that used Google's conversion tracking system to monitor ROI. I would guess that it is possible for Google's AdWords team to identify landing pages for AdWords clients that are not participating in the Google conversion tracking system and have the Google toolbar "track" conversions. But this would be labor intensive and problematic I think. I have not syndicated any of the AdWords PPC ads that I run to AdSense sites, but I was wondering if anyone who has been running AdWords with syndication to CTA/AdSense for a while without Google's conversion system noticed any change in CPC when signing up for the conversion system within the last two months. I'm wondering if the Smart Pricing rewards AdWords advertisers who use their conversion tracking system. I would imagine that Smart Pricing is something that would kick in gradually for AdSense partners as ads build up a history allowing Google to compare the conversion rates from one AdSense partner to another. Does anyone know if Smart Pricing kicks in from the start with new AdSense partners? Smart Pricing seems like it should be able to effectively punish AdSense partners engaging in "undetectable" click fraud in a natural way. Tons of clicks with no conversions should eventually yield no AdSense income. Thoughts?
My thoughts: It doesn't work very well. Ok, why do I say this, since I certainly have no real proof. One of my sites would be very similar to the concept of the digital camera review example that they give. It compares various service-oriented companies in a niche field. It is essentially a one-of-a-kind site. There are a handful of other sites that compare less than 5 of these service companies, but my site compares about 50 of them. It is also ranked #1 in the serps for its main keyword. Basically, anybody who is interested in this service ends up at my site. And anyone who is searching for this service is interested in only one thing - BUYING. They may be comparing for now, but only because they plan to BUY now or in the future. It is a very specific service that no one but a potential buyer would have any interest in. Before Smart Pricing - each click paid Very Well. After Smart Pricing - about an 80% reduction in click price. So...that's my basis for saying it's not working very well. Not a scientific basis, but mine nevertheless.
Interesting. Thanks for sharing DD. Have you considered writing to Google and asking them what the justification for the Smart Pricing downgrade was? They probably would not answer, but it never hurts to try... Does your site have a logical pathway for visitors to end up buying through the site, or would the adsense ads provide the pathway to the vendors? Just curious if perhaps the buyers stuck to your site and the tire kickers (or researchers) are the ones clicking the ads...
The reviews on the site include links to the reviewed sites, so certainly buyers can go that route as well as going through the adsense ads. (Most of the adsense ads are for the same services, but different companies than the ones reviewed, so I would think that both would get similar conversions - with the reviewed ones getting slightly higher due to the reviews themselves, but of course, I have no way to know that). added: oh, and no, I haven't written Google. I have nothing to hide, but I still have a paranoid fear of them. Never ever want to draw attention to myself from them for any reason - even with everything being squeaky clean and above board. an irrational fear, i'm sure, but a fear it is.
How can they do this? I don't see a way they can guess if a click would sell or not. What about sites that have nothing to sell (like cancer reference sites.)
schlottke, Google is offering AdWords advertisers the option of adding some code to their sites to measure the conversions of people (or click fraud programs) that click on their ads. It should be very easy for Google to match up the conversions on their system (for those AdWords advertisers who participate) with AdSense traffic to see which AdSense partners are converting for the AdWords advertiser. If a site running AdSense shows less ROI for ads than other AdSense sites that run the same ads, you would expect them to lower their CPC under the Smart Pricing system as described. I do not know for a fact that they are doing this, but it sounds plausible and I'm hoping to see if anyone has any experience that could confirm or disprove the hypothesis. DD's experience would tend to disprove it, but there is not enough data to conclude decisively. If you meant how would they measure conversions for a cancer reference site advertising on AdWords, I don't think they could unless there was some action that could be measured as a conversion (newsletter sign-up, petition form, etc.). I would imagine that pure non-commercial sites (not necessarily non-profit sites) are not advertising on AdWords. It would not make economic sense.
IF it is the case now that CPC depends on quality of traffic or quality of clicks google should state that explicitly somewhere. if a better click quality REALLY results in more $/click in the end run there are some actions you can take to "make your traffic better", eg. filtering open proxies and leech bots. on the other side if google just meant to put a cap on "bad traffic" I'm sure that this wouldn't affect most webmasters. however, reading dazzlindonna's post I come to the conclusion that smart pricing was just established to justify lowering the payout.
how on earth could google track if your click leads to a phone call..? unless the tracking code is just placed on a page with a phone contact.. still, odd.
Brian, Google stated it on in the press release I referenced in my initial post. disgust, tracking codes are placed on result/confirmation pages - the pages that are shown after a visitor has completed a form (newsletter sign up, on-line sale, etc.). Conversion tracking only works for on-line (measurable) actions. I would hazard a guess that most AdWords advertisers are measuring conversions whether they are using Google's service or their own.
Ok, latest update, and latest theory (posted elsewhere and repeated here): For the past three days, my EPC has shot back up. The one thing I did? I removed adsense from the non-productive channels. Now maybe, JUST MAYBE, those unproductive channels were somehow wrapped up into Google's secret sauce (er formula), and G said, "hey, the xyz factor is too low, so we're gonna lower the EPC". Now that the xyz factor is higher, the EPC is higher too. Again, just a theory. Maybe it's all coincidence, but for those of you out there with lowering EPC rates, maybe try dumping some of the non-productive channels, and see what happens. (Note: xyz factor is my made-up term to indicate i don't know what the factor is).
You are a genius. My bottom line as a productive AS publisher for the last 2 years has always been good. However since Jan 2005 EPC is 50% less. I am going to take your advise and remove AS from non productive channels. Your theory makes perfect sense according to my stats...thanks