The Truth about Smart Pricing

There is a hole in your theory. Advertisers are paying record prices per click.

 

Any Proof?

 

Not one of us is going to be able to provide proof of anything we assert here. I would never ask you that question for that very reason.

I'm just reflecting my experience and what I've seen other people post about. It seems pretty blatant.

If you want to test this, it's very easy. Open an adwords account. Bid on a rare keyword or even a made up one. Test it for 3 days. Then repeat once a month. Recent changes are so blatant that you will come up with the answer very easily. But it will not be something you can use as proof unless you're willing to post images which probably break Google's TOS and ruin the experiment in future months since the words will be exposed publicly.

 

Just because advertsiers are paying more per click now than they did last month doesn't mean smart pricing isn't in effect. Remember smart pricing has been around for a year and a half. Smart pricing was in effect last month and this month, so prices going up or down doesn't have anything to do with smart pricing.

 

You're missing the point. But never mind.

 

There are two holes in your theory.

Nothing to support that everyone is paying more per clicks and nothing to support everyone making less per click.

 

What point am I missing? There are a lot of misconceptions about smart pricing. And there is a lot no one (except Google) can ever know. I'd like to learn as much about it as possible, so I'm all ears if you have some good thoughts about it.

 

Here's my take on the issue of Smart Pricing.

Adsense/Google is a corporation they are in the business to make money
and carefully watch their bottom line!

Should the bottom line dip they will get their PhD's to think of a way to increase the downward trend.

It would be naive to think that a BIG corporation such as Google would implement a new algo that would loose them money or decrease their profit margin.

Now they make the excuse that all will benefit. Telling advertisers and publishers that they will make more by this SP scheme.

Alas, the only ones increasing their bottom line is Adsense.

Now that many publishers have jumped ship... again, Adsense has noticed the downward trend they implement the referral scheme. An incentive to initiate publisher loyalty. How many publisher will leave if they realise that Adsense will continue to reap revenue after they close their account.

nuff said......

 

Everything I've tried to fix this smart pricing has failed. I've just moved my other site over which gets a lot less visitors and it earned more than adsense already. What does that tell you about adsense?

 

What it tells you is that Smart Pricing hasn't hit your new site yet... wait a while and I bet you SP will kick in within 48 hours...

I also got hit hard with SP lost half my revenue in the last two months. So I did a major re-vamp changing my code colors - deleting ads from sites that were not performing... my bottom line increased however, only a little.

I don't think we as publishers can ever beat the SP system... only until Adsense notices a huge decrease in publisher jumping ship... then maybe they will limit the SP system to particular sites not across publishers accounts.

I would love to hear Darren's take on how SP has effected his earnings? Now that would be very interesting indeed...

 

I'm really trying to understand people's perspective's here.

Why do people always blame Smart Pricing when they see a revenue drop? How do you know it isn't because advertiser's are bidding smaller amount then they were before? How do you know it isn't because Google changed their targeting algorithms and started serving up different ads to your site? How do you know some big advertiser in you niche didn't stop advertising, so the bid amount tumbled? How do you know Google didn't just decide to cut the revenue share you get?

There are many, many variables that affects the amount you earn. Why blame smart pricing?

 

So a change from let's say 50 cents to under a penny is not smart pricing? It's not hard to distingush.

 

I wish I had the time to answer you guys but there is a lot more to Adsense than that. There are explanations for all you're seeing. I've been watching closely since adsense began.

Do not put too much effort into changing things radically. Go slow. Google has an algo to stop making too much of an increase no matter what the cause. Even if you have a legitimate spike in traffic. Radical changes will just cost you money. Everyone misinterprets that as SP. It's just Google taking money off the top and making it look like an anti spam measure.

It isn't because I haven't presented evidence that I haven't seen any. But I'm not going to chase down URLs and do your research for you. I wish I had time for that.

 

So you're saying that Google's smart pricing algorithm suddenly decided that the clicks from your site were converting terribly, so reduced the price it charges the advertiser by 1/50?

 

Another of the possibilities is the new site-targeting method (CPM ads). Maybe it needs improvement, because some publishers are complaining about CPM ads replacing higher paying CPC ads, something that -in theory- should not happen.

 

Something people need to keep in mind is that there are budgets and deep math going into how Google can maximize their income. That does not always correlate with a site making the most money. Google has it's PHD's focused on getting advertisers to spend their max budgets. I read an interesting article about that relating to the auction system that google uses on adwords. It's counterintuitive but they employed a system to pull out the max revenue.

So even if on YOUR site a CPM ad brings down the income because you might have had more expensive clicks...if Google knows that somewhere on the network that advertiser will get a click and use up their budget, they don't really care. In fact, their number one preference for showing expensive ads is on the Google Search. Then they can pocket the whole thing.

 

Nah, they suddenly decide to pay me 1/50 not charge the advertisers 1/50. LOL!

 

Just understood his post now. I thought he was serious at first. LOL.

 

So why do you call it smart pricing then? That is just Google taking a bigger cut. I think that's the thing that is confusing here. People use the term "smart pricing" to mean any type of reduction in the revenue they get.

 

Smart pricing MAY be a result of Google taking a bigger cut. No one really knows how the algo works, I suggest you do your homework.