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|Jenstar reveals data about Adsense Smart Pricing|
I just read Jenstar's blog about smart pricing. I want to be shocked, although I'm not. Let's just say disappointed.
How in the hell can Google be so stupid as to count Smart Pricing on an account basis rather than at worst domain basis. No wonder... That explains a lot.
It is really ridiculous.
April (spring?) 2004? Not sure, but that sort of rings a bell.
I made money but I do hope that things become a little more transparent.
By this time next year Yahoo will probably be out of beta, Chitika will have better stats and MSN will maybe have something going -- so I am not too worried ;)
Life is about choice.
Yep official release was April 2004....just enough recovery time from that broad based change in October 2003:)
Smart pricing whether for the account or whatever just seems absurd to me. Google using some criteria only beknownst to them adjusts prices charges and payouts given. It is the main reason I do allow my ads to be content distributed. Yahoo avoids a lot of this silliness because there are separate bid markets for search and content.
On the AdSense side, I have ads on 13 widely different sites. The lowest has a CTR of 0.2% the highest are around 20% -- two orders of magnitude difference! The junky sites are the ones at the extremes, my quality sites are in the middle.
To group them all together in a single quality ranking just because a single person made them or bought them is crazy.
Buzliteyear, just did a line by line comparison between Jen's blog and posts....everything she reveals comes directly from the post she references. Her questions and comments are a summary of the rest of the posts.
So lets look at smart pricing or dumb pricing if you prefer that nomer:)...the theory of google ad relativity explained. Pull up a chair as we reveal the inner workings of a beer induced mind.
Fact Number 1: ad pricing is determined via a "quality score" consisting primarily of CTR and price for an advertiser. Higher CTR, should result in lower price getting top billing. For publishers Google figures that lower CTR mean poor display of ads, therefore lower cost of ads. <theory number 1....remove low performing pages to increase EPC>
Fact Number 2: Smart pricing applies to content pages. There are two pricing structures within adwords programs, serps and content publishers.
Fact Number 3: ad pricing formula as noted in 1 says higher CTR means lower bid price. Increasing CTR on your site will reduce cost of ads.
So let me summarize this theory. Increasing CTR on your site will reduce price publisher has to pay, reducing your income. Increasing your CTR will result in increasing costs of ads increasing your revenue. You get less than google on a price of an ad.
Now you know why we drink:)
|The member that initially posted this information in the previous thread did not reveal everything that was on Jen's blog. This means that she went further in getting the information. |
I don't think so. It looks like all the info from the blog post came from the thread. I don't see any new information.
OK, all this "Smart Pricing is Terrible" talk got me wondering what a look back at my stats would show.
Overall my aberage epc went up when Smart Pricing was introduced.
EPC on various pages (channels) has bounced around from time to time, but I can't see anything that screams out a Smart Pricing EPC Reduction.
Overall I'm far ahead of where I was before SP took effect. A big chunk of that is the result of more traffic of course. Another big chunk is from adding Adlinks and getting a bunch more clicks from them.
It all makes me wonder, how much of the declines folks talk about are really Smart Pricing, and how much is something else.
I do have some pages where earnings (EPC) is down, but I have more than enough where it's up to offset that apparently. And on the pages that are down it could just as well be from a change in advertizers, or less available ads, or who knows what.
Haha, that was funny Visi.
Somewhere else I was accused of being mad at Google. And it isn't so much that as frustration. I know something's off and didn't quite understand it. I didn't know if G was purposely doing this to grab a bigger share, or if something else was at play.
After thinking about it some more and chatting w/ some knowledgeable people offline, I now totally "get it". And am less frustrated w/ Google's intentions than with their algos and secrecy (which to be fair does sometimes have a good reason behind it).
I started thinking about this as a programmer building adsense/adwords rather than as a publisher. And it opened my eyes a lot.
I believe it is true they are doing this on an account basis. But at the end of the day, G wants to apply programmatic algorithms on a scale that they don't work. And they are loathe to give up on a failing system that works so well in their PR campaign.
There are so many holes w/ SP that you could drive a tank through it. And spammers don't need a big hole to make their moves. Hence the system is broken for quality sites and working great for spammers.
My final personal conclusion is, SP has to go. Hopefully sooner rather than later. It only works in theory. And there are alternatives that will work better. Manual intervention isn't always a bad thing.
Google is trying to keep its customers happy. The customers are the advertisers, not the publishers. One way to keep advertisers happy is to adjust pricing so as to discount the sites that don't deliver as well as some others. Whether this helps "good" sites and hurts "bad" ones is really impossible to say, now isn't it?
Google is one of the few companies I know of that has a near-monopoly but cuts prices anyway. Very admirable.
I have been in the program since Day One and have no idea whether Smart Pricing helped or hurt my sites, although I think it may have helped them slightly. I'm more concerned with whether it has kept advertisers happy so that the AdSense program continues to grow and prosper.
It's always interesting to me that everyone thinks the addition of YPN, MSN, etc., will somehow be good for small publishers. You think Microsoft will be good for advertising? Was it good for the browser market? How about the disc defragmentation utility market? The WSYWG Website-builder market? It's more likely the new entrants will drive down the price of advertising, thereby hurting everyone.
Currently, Google, Yahoo and Microsoft are all trying to get their hands on AOL, because it delivers a massive number of eyeballs each day. You think any of them much care whether they retain or sign any of our sites? We provide what in some advertising circles used to be known as tonnage -- raw bulk that gets the numbers up but provides very little "value add," as the saying used to have it.
We're the equivalent of the 500-watt daytime radio station in Elko, Nevada or Garden City, Kansas. If you have a huge bunch of them, it's OK but you'd rather have WABC and KNX anyday.
I don't believe that SP is done on an account basis. I have what I consider to be my minor sites (read: not many pages, not many visitors) but when one of those sites does happen to get a click, it leads me to believe that if I were to develop those sites further and get more traffic to them that I might have a couple of gold mines. Unfortunately I don't currently have the time to work on them. My main site does not receive the eCPM nor the "average CPC" that those smaller sites receive.
What I do believe is that SP is on a per page basis. How well does the content on that page relate to the ad that receives a click? If it is spot-on, the click should not be discounted. If it is only remotely related, then there might be a discount.
|Confidentiality is what B2B relationships are about. It is what business relationships have always been about, and the web has not changed that. You don't grind your ax in public with current trading partners. You keep your negative opinions to yourself, or you cut the tie. Otherwise, they may cut the tie for you. It is bad business. |
An interesting however overtly grey-suit comment. Which US business school did you go to?
I run a multi-million Sterling international company with in excess of 7,500 employees and I can state that all of my customers are also my friends. They have to be because the investments we make (and I mean we as in my company and their expectations) in raw material supplies and production are enormous.
We all have the same goals, quality products on-time in the right place on budget!
Try the real world of face-to-face business, production and raw material supplies and then find out the reality of commerce and not theoretical business models.
If a physical product-based business does not get its quality control, inventory and supplies correct...that industry's trade will know in a very short time regardless of theoretical confidentialities!
Many international companies have learnt this to their cost...there are no "excuses" now except the genuine reasons for the failure to deliver and if you do not comprehend this basic fact then you will not comprehend any niche...only generalised, mass-produced items.
I'm going to say something that has been on my mind for a long time and which many have only spoken about privately...the average US business model is absolutely diabolical, it needs to be re-thought since, in general, the US consumer is getting a very bad deal.
Products are not just about a low price, a lower price and the lowest price.
We now only ship second/third-grade products to the US since the competition is so silly...we don't even bother to answer generalised e-mail enquiries for quotations.
When is the US consumer going to realise they are being taken for a ride and being sold shoddy products?
Hmmm...probably not until their TV stations have been bought out by foreign entities willing to sell them even more shoddy goods to get themselves into even more indebtedness...
Ooooops...we're not supposed to talk politics here, are we?
My first impulse when I read the original post about smartpricing being account wide was to take adsense off any page that didn't seem to be doing well.
After reading this thread it seems we don't really have the information we need to do this wisely.
What do others think about this? Do we have enough info to make decisions like this? If so what do we base them on?
I don't think we have enough data to say take adsense off certain accounts. But I really believe this is true about it being on an account basis. They already lack enough data to create a proper model of conversion on a url basis, which would be the optimal way to skin this cat. They also lack the data to do it on a domain basis. So in order to gather enough data to implement this, they just aggregate stats on an account basis. Which results in accuracy similar to the Alexa data. Which is easy to game. Which opens the door for spammers to abuse the system. Which they are doing. And the quality non spammer websites are paying the price.
I read jenstars post, is there really anything there that people didn't already know? Simple testing would have been able to tell you most of what is posted there.
ken_b, good points.
I think much of the confusion about how Smart Pricing does or doesn't work springs from the unfortunate reality that the math that goes into the AdSense algorithm is more complicated than most of us, and I'm including myself in this, can understand. Multiple factors are interacting in complicated ways--I can write that, but I don't fully understand it! BUT when we discuss Smart Pricing, most of us latch on to one or two factors, because beyond that it gets too complicated...
Frankly, as I posted on another thread, until a Google staffer quits and reveal the details of the AdSense algo, and then gets sued and ruined for violating his confidentiality agreement, we are just not going to be able to figure out for sure how Smart Pricing, or AdSense in particular, work.
What should we do? Try out different things and see what works. Set goals. And then set new goals.
People, people, people, please calm down. Jenstar does not know Google inside-out. Her article is simply her own opinion.
Please stop bashing Google.
|You don't grind your ax in public with current trading partners. You keep your negative opinions to yourself, or you cut the tie. Otherwise, they may cut the tie for you. It is bad business. |
with respect, mrs huggard, if you have problems convincing your business partners of adsense, don't try to blame "evil" forum or blog speakers.
instead learn to cope with reality.
your demand of keeping quiet about adsense problems is ridiculous.
i think freedom of speech is a great achievement of western civilization. i really hate if people try to shut my mouth.
Wow, I missed a lot while I was at Disneyland yesterday! Not very often I spend a full 24 hours offline, or expected people to be checking if I crossed my T's and dotted my I's ;)
Some of the data comes from the thread, others come from bits and pieces of info I have collected since smart pricing launched (I believe ken_b is right that it was in April 2004). And if you venture into the AdWords support pages, they have a lot on smart pricing, such as the 30 day cookie, image ads and the minimum price bid.
The data also correlates to my own test data, and feedback from others. Most of the info has come out in bits and pieces here and in other forums over the past year and a half, but I got so many questions from that thread, I decided to blog about it and summarize all the publicly known information about smart pricing. So while not all the information came from the thread, I got so many IMs and emails about it that I decided to write it all up.
just for the record .. jenstars advice to me .. helped me double my earnings ..
and yes i could have tested tested and tested..
I could also tried to fix my gas central heating ... i'm sure playing around enough, I COULD come to terms with getting the best out of it, BUT I may even burn down a few houses WHILE PLAYING ... but hey ... their IS a gas fitter in my town so I seeked thier advice..
I have news for you. Freedom of speech doesn't have any place in the b2b world, at all.
If you put a display of Pepsi in your store, then a sign in the window right next to it saying new studies say Pepsi will eat through your stomach lining, you can bet when the Pepsi salesperson comes to service the display, you will no longer be selling Pepsi. Period. Don't quote the constitution of the U.S. for B2B matters. You are on the wrong topic for the U.S first amendment.
You have the right to make money, only if your contract isn't cancelled because you have become an ungrateful, disrespectful trading partner. That is the first amendment of the INTERNATIONAL business constitution. It is also International Business 101.
You want to slam dunk your trading partners in a forum, that is a right that you may get away with. But, it is simply bad business to slam your suppliers right in your own store.
I'm finished with this lesson in business ethics. Take it for what is it worth. It is not personal.
i DON'T THINK THAT WAS WORTH MUCH AT ALL .. but don't take offence, I think you will find that you can compare products and disagree with products .. even Googles .. but if you stay within their guidelines you will be ok..
Ok. On a personal basis now. I go to the blog as did many other webmasters. Which webmasters? Adsense publishers of course, that is what the thread is about. I see a posting about smart pricing and how it hurts publishers, when the website does not perform as expected.
What is performance? Is a high click through ratio with a high sale to click ratio.
I don't really think it gets any clearer, as a site visitor, that Jen wants me to click on her ads. She doesn't come right out and say so, but the post comes out to the visitor of whining about commissions. To me, that says, "click my ads and help me out".
I'm not saying she intended that, but that is the way it 'appears' to any visitor with a brain.
Further, she is well known and liked in the forums. Her ww profile links directly to her Adsense ads. What is the likihood that all those that love her will click the ads just to help her out? How about we go into the shark invested ADWORDS threads and pose that question to advertisers? Better yet, why not ask those who are advertising on her blog.
It is not hard to see how wrong the whole thing is, when you think about it from a b2b prospective, and from an advertiser's prospective.
I have a blog. And for the reason stated above, did NOT put Adsense ads on my blog. When you have friends from over 100 nations, and thousands of ip addresses visiting your blog, it would very hard to prove fraud, in any case. That doesn't make it right.
I agree with you that it is not good business to have a "partner" and talk poorly about them. However, Google Adsense is not a partner as much as a service. Google offers this service to the masses as long as they stay within the TOS. As I understand them Jenstar has done so.
One of the over-riding laws of the business world is, "If you make me enough money, I can ignore that you tell people I dress funny." (Just a silly example) Between her personal and business ventures I'm sure Jenstar makes Google more than enough money for them to forgive her on this one. (if they are even worried about it.) ;)
|I'm finished with this lesson in business ethics. |
Janethuggard - So it is not okay for Jenstar to say anything negative about Google or put her blog in her profile or put Adsense ads on her blog. That is unethical as far as you are concerned, right?
But then it is okay for you to post an unsolicited lesson in business ethics ctiticizing her, the moderator of this forum, in a thread about smart pricing?
janethuggard: I don't agree that Jenstar was out of line in writing that, but that's between her and Google.
As for Jen begging people to click on her ads, are you out of your mind? There's no hint of that anywhere. You really have no business making such an accusation based on some kind of wink-wink code you think you can read between the lines.
|To me, that says, "click my ads and help me out". |
Websites discussing AdSense, such as Jenstar's blog, are visited mainly by AdSense publishers, who are trained not to click on ads. In fact, for many of us it's difficult to click even other's ads, maybe from some subconscious conditioning. :)
Therefore, with a site about AdSense probably you get less clicks, not more.
|Further, she is well known and liked in the forums. (...) will click the ads just to help her out? |
All of us know we are not helping at all with a series of clicks. Even quite a lot of publishers don't mention their sites to their friends, among other things (like ethics) to prevent receiving some nice final email about clicks from Google, you know.
|When you have friends from over 100 nations, and thousands of ip addresses visiting your blog, it would very hard to prove fraud |
What do you think over 22,000 adsense publishers have visiting their sites, you can times your figures by 10 100 or 1000 fold depending on the type of site.
What makes you so different?
with regards to you snide remark about "Jen wants me to click on her ads" IMHO you are talking through your backside girl, there is nothing on that article stating anything on those lines what so ever and I suggest not drinking before posting in the future because that's what it looks like from where I am sitting
I respect you as a human being. And like every human being you have the right to your opinion.
If I could find enough common ground to argue with you, I would. But your thoughts are so polar opposite to what most people think that I just don't see us coming close to agreeing. Therefore in the disagreement I could see it getting nasty.
I see some people jumping on you and don't want to add to the pile. So let's just agree to respectfully disagree before the thread turns into a big fight.
I'm a curious person, so somehow I wish I could understand your perspective and where you're coming from better...
Are you the famous DavidN, as in Naylor (if I remember correctly)?
Thank you for your quote which proves SP is broken beyond anything else said in this thread
|just for the record .. jenstars advice to me .. helped me double my earnings .. |
That figure is ASTOUNDING. DOUBLED. I'm assuming you didn't double your audience. Or radically alter your placement, like moving it from the bottom of the page to the top. Just by using strategy you DOUBLED your income. If figuring out Google's algo makes that much of a difference, then it means something is really fubar.
Google's algo is hemmoraging.
P.S. Jenstar and DaveN, please sticky me your hard earned secret techniques for doubling your income on Adsense and then G can keep up the good work ;)
|Thank you for your quote which proves SP is broken beyond anything else said in this thread |
I may be off, but I didn't read that as relating to SmartPricing.
Since Jenstar offers Adsense optimization services, I assumed he was talking about her placement/color palette suggestions helped him to earn double.
I don't think that has anything to do with SmartPricing really.
|I don't really think it gets any clearer, as a site visitor, that Jen wants me to click on her ads. She doesn't come right out and say so, but the post comes out to the visitor of whining about commissions. To me, that says, "click my ads and help me out". |
That is absurd. If you really were that familiar with my blog, you would have known that I did not have any advertising on it whatsoever until I started beta testing with YPN (before it went into official beta release for others). I couldn't talk about being a beta until they began accepting other applicants, but I could *show* the ads on my blog. And to be fair and not show favoritism, I rotate between YPN and AdSense.
I don't expect people to click and I expect to have an extremely poor CTR and earnings on that site for the sole reason that the target audience of my blog is made up of people who are trained not to click. I obviously can't go into specific stats, but my blog is my poorest performer by far of all the sites I run contextual advertising on. There is definitely no one clicking to "help me" judging from my stats ;) And since I have been site targeted for AdSense, it doesn't make a difference how many clicks I would receive with AdSense either.
And I think it is fairly well known that I must be doing well financially with contextual advertising, I definitely don't need "helping out".
|That figure is ASTOUNDING. DOUBLED. |
One of the AdSense placement site reviews I did while on SEO Rockstars radio show resulted in the publisher quadrupling earnings, which she posted about. So there are changes people can do to increase earnings without having to worry about smart pricing at all.
Personally, I feel that unless you want to get right down to the nitty gritty of doing major testing and tracking every little detail, that publishers shouldn't really worry about smart pricing. It is what it is.
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