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|Is Smart Pricing Killing You?|
EPC declines as pageviews, CTR rise
I hate to beat a dead horse, but every time I add new content, it becomes more depressing.
While I am earning more overall, I am earning less per click, and I can only attribute this to "smart pricing", of which we know little.
My supposition is that adwords advertisers report to Google that ads from my site, don't convert well, so the price for those ads goes down. To me, this is not rational. I am driving more custoemrs to sites, yet receiving less per customer for my effort. The fact that people do not buy is NOT my problem, but that of the web site owner (advertiser).
Publishers have no way of knowing which ads are being clicked on, nor do we know whether the people clicking on those ads actually buy anything from the site to which they are sent. But we do see our earnings per click decreasing.
Basically, this creates a tremendous disincentive to create more content. It's like a race to the bottom, in which the race is won by the site that generates the most clicks for the least amount of money.
My situation is simple. while my earnings have doubled in recent weeks because of added pages and good placement of adsense ads, my earnings per click are down by 30-40%.
My suggestion to Google is this: Stop penalizing publishers for creating good content. Keep our EPC steady by scrapping smart pricing (actually, publishers who deliver more clicks should earn MORE per click). Eliminate the scraper sites that proliferate over the internet. And, finally, RAISE YOUR PRICES. Five cents per click is too low in today's environment. 10 cents as a minimum bid is more reasonable. You'll get rid of lowball adwords users and make many publishers happy.
Call me crazy, but I think that I should be able to earn a decent living (at least earn a living, period) if I am devoting 80% of my time to improving and promoting my site. Earning less per unit for increased effort is backwards.
I do hope somebody at Google reads this and takes my advice seriously.
|My situation is simple. while my earnings have doubled in recent weeks because of added pages and good placement of adsense ads, my earnings per click are down by 30-40%. |
The proxy you are using to measure success should not be your EPC, but your eCPM and total income. If eCPM and total income is increasing, then you are doing the right things.
|Eliminate the scraper sites that proliferate over the internet. |
Fully agree with you on this one!
>10 cents as a minimum bid is more reasonable.
I have to disagree. In sectors with small margins 10 cents will be too much for advertisers to make profit. So raising the minimum bid price might actually lower your total earnings as some advertisers may drop out.
>>and I can only attribute this to "smart pricing"
I really think that the cost to the advertisers on our sites has yet to settle. Smart pricing is aimed at us content providers and not AdWords placement. The content advertiser value is evolving and without a competitor, itís not evolving very quickly.
I think a discussion regarding the future payout to content providers is in order. What are the market factors that now and in the future will affect our payout, this is what I would like to see discussed.
I hear so much about smart pricing. The problem is that all the talk is coming from forums. No word on "smart pricing" from google,, anywhere. Obviously google is using some crazy algos to determine what the payout is, but who is to say that the payouts are for specific sites, channels, or for specific publishers. If someone can lead me to an official smart pricing article somewhere, this would change my mind that its all speculation.
|RAISE YOUR PRICES. Five cents per click is too low in today's environment. 10 cents as a minimum bid is more reasonable. You'll get rid of lowball adwords users and make many publishers happy. |
So Google is supposed to make publishers happy by making advertisers unhappy. The general rule is to satisfy the people writing the checks.
>>If someone can lead me to an official smart pricing, article somewhere
While speculation is unproven, it does not mean it's false. Man, there is no definitive source; we have our experience, and the observations and occasional science from our posters to base our strategy. IMHO
FWIW, the exact same "smart pricing" effect occurs with affiliate programs. It's not something Google pulled out of thin air.
Say you give an affiliate program a moderate amount of exposure, and you find it does remarkably well. That's because the most motivated people are seeing the link and clicking through. If you then try to drive 2, 5, 10 times as much traffic to the site, using better placement, flashing links, exclamation points, or whatever, the EPC will surely go down because you're sending less and less qualified traffic to the merchant.
The bottom line is, overoptimizing for AdSense clicks is going to cause the overall quality of clickthroughs to decrease. You may come out ahead on the bottom line, but your EPC has nowhere to go but down.
While I understand your concerns you should refocus your attention on the fact that you as a publisher or website owner have to create value to your users. This the only way for you to be entitled to earn more money. If adding more content to your site is a frustrating activity you might want to take a fresh look at your entire business model. So the real question is are you creating new content because you want to earn money from Google or because you are sure your content is valuable enough to your users? I mean, how did you generate your revenue before Adsense was introduced?
|The fact that people do not buy is NOT my problem, but that of the web site owner (advertiser). |
That's one opinion, one advertisers won't share.
Example - If you run an ad in 3 magazines all charging prime ad rates and only one of the magazines resulted in 80% of the sales from advertising you would certainly ask the other 2 for a discount or drop them altogether.
The same is true with web sites, just because you attract the traffic for the keyword doesn't mean it's the right traffic for that advertiser or for any sales in general. I get over 10,000 visitors/day on one site in a niche market and thru testing a variety of affiliate programs I was shocked to figure out what they would buy and what they wouldn't, didn't make any sense but I catered to the customers in the long run and profits went up.
Sounds like you need to find out why the visitors are on your site which might make it clear how to resolve the problems and maybe think about revamping your SEO for the site can flip your pricing. I started a thread about a month back about what I did, more or less complete overhaul of many things, AdSense now pays 3x daily for the same traffic it did a month ago.
|all charging prime ad rates |
3 cent clicks are hardly prime rate, especially if you are sending real eyeballs.
Let the marketplace decide. Smart pricing is Google's guesstimate of what a click is worth, but they don't know that, the advertisers do. And the advertisers will tell you what it's worth by bidding on that traffic.
The problem is that Google gives advertisers all or none access to the content network. Advertisers should be given the choice to easily exclude any major non-converting sources of traffic. Any keyword will generate thousands of clicks from thousands of sites, but I bet the top twenty or thirty cover the majority.
And quite frankly, while smart pricing might be justified in theory with this all or none acceptance into the content world, in practice I believe they can't get it right and haven't got it right. Too much of the traffic is unmeasured or not even geared towards conversion. Who knows why advertisers want it? Let the advertisers tell you what it's worth by bidding on it. They know better than anyone.
Is'nt one of the effects of allowing mutliple ads and thousands of new publishers (many now creating content around high paying keywords) less high paying ads to go around, adding confusion to the smart pricing speculations?
So maybe, take what Incredibill and Jomaxx said , add that its effected by these other factors, throw seasonal performances into the mix and you get one hard nut to crack.
openmind, I understand your question. I have a solid niche with lots of "horizontal" adjuncts. My content is as good as you will find on the internet in terms of usability and anwering a need. Before adsense, the main part of the site was in a password-protected directory and I sold subscriptions. Adsense seemed to be a better way to basically give away what I was selling (information) and not have to market as extensively. That part has worked thus far. I am simply aghast at the dropping epc. I probably shouldn't have said anything because since my first post, it's gotten worse today.
My point is this, and it comes from years of being in the newspaper and advertising business. Traffic is traffic. If I create traffic to your door, it's up to you to seal the deal. While many may say it's the wrong traffic I'm delivering, how do we really know? Suppose I read an ad in a newspaper, let's say the New York Post, supposedly a paper for a less sophisticated crowd than the NY Times. But, I show up at your used car lot. Are you going to treat me differently if I tell you I read your ad in the Post rather than the Times? Maybe, maybe not. But there's a better chance that I'll buy a used car from you if you treat me right, even though I don't buy the first time.
It works the same on the web. who is to say that a visitor I send to a site doesn't bookmark that site and return later to purchase? I would get no credit for that sale and actually would be penalized because the user didn't buy the first time, unless Google is tracking that IP on a long-term basis, which I doubt.
If mainstream media were subject to "conversions" what would happen to auto advetising (I'll use Ford as an example) on network TV when sales slump because either, a. Ford is making bad cars, b. Ford is chargng too much, c. Ford was the subject of a news investigation or recall, d. Ford has other problems with dealers that aren't treating custers properly.
In all of these cases, the networks did their job, delivering "potential" customers to Ford dealers. After that, Ford was at fault. So should Ford go to the network and say they want a lower price because they're not selling cars? I think not. The network did their job, just like I and every other conscientious publisher is doing their job.
Certainly, I have made concessions in my page design to accomodate Adsense. After all, they make money when I make money. Which is why I don't understand smart pricing at all.
Which brings me to another point. How does google know if ads are converting? By advertiser input? I'll be frank, here. If I was advertising and most of my traffic was coming from one source and there was a way to pay less for that traffic, I'd do it. And smart pricing is providing a means to do that. So, yes, I'm saying that a lot of advertisers are gaming the system, claiming low conversions, when the opposite is true.
INTELLIBILL, I read your post and that thread and have reworked my site, due in large part to your insights. I still have a problem with the smart pricing model and will until somehody shows me how it is better for PUBLISHERS!
"The proxy you are using to measure success should not be your EPC, but your eCPM and total income. If eCPM and total income is increasing, then you are doing the right things."
This misses the entire point of what he was saying. He was saying that the system provides a disincentive to work harder.
"Let the marketplace decide. Smart pricing is Google's guesstimate of what a click is worth, but they don't know that, the advertisers do. And the advertisers will tell you what it's worth by bidding on that traffic."
Absolutely. Smartpricing is an oxymoron.
The problem is that Google gives advertisers all or none access to the content network. Advertisers should be given the choice to easily exclude any major non-converting sources of traffic."
This has been mentioned several times before. It doesn't look as though google is in a rush to do anything like this. Hopefully, yahoo will and google can follow suit, or not.
|I read your post and that thread and have reworked my site, due in large part to your insights. |
But did you sign up for AdWords and look to see which keywords in your field are paying best?
That was part of my retooling efforts, I shifted some things around to attract the higher paying ads.
Also, never forget PLURALS and LOCALIZATION in your SEO efforts. I'm in the top 10 for my keyword plus every state and most countries - people would KILL to get these spots if they were even aware of what I did. Someone looks for Alaska Widget, I'm there, California Widget, I'm there too :)
|I still have a problem with the smart pricing model and will until somehody shows me how it is better for PUBLISHERS! |
It isn't supposed to be better for publishers. It's supposed to be better for advertisers--and, just as important, to reassure advertisers that they aren't overpaying for clicks on the content network.
(In reality, advertisers are overpaying in some cases, just because worthless traffic is worthless even when it's purchased at a discount.)
europeforvisitors are you ready to admit that EPC is falling across the board or will you continue to insist that you dont see the compalints? ;)
In reality Advertisors ARE NOT overpaying on my websites as they are not over paying on most that are complaining.. does this mean the better publishers are startting to pay for all the nonsense publishers traffic?
I think the reality is that G has one missiion ..to have adsense ads plastered on every website onm the web ..the only way to achive this is to lower publisher payments..(not enough ad dollars to go around) .
From their perspectibve it's better to have adsense to have adsense on hundreds of millions of pages insted of ten million.. volume of over quality . Volume almost always beats quality ..in fact they are not paying us MORE to create pages ..they are paying us less so that we are in a position where we HAVE to create pages!
|europeforvisitors are you ready to admit that EPC is falling across the board or will you continue to insist that you dont see the compalints? ;) |
It isn't falling across the board, as anyone can see from reading posts by members who aren't experiencing a decline.
|I think the reality is that G has one missiion ..to have adsense ads plastered on every website onm the web ..the only way to achive this is to lower publisher payments... |
Sorry, but I don't understand that logic. What does the publisher payout have to do with distribution?
Also, it's always a mistake to talk in generalities, because what's true for one publisher, advertiser, sector, etc. may not be true for another. There may well be an oversupply of inventory for mass-market widgets, but for other products and services, there may not be enough inventory to meet advertiser demand.
|in fact they are not paying us MORE to create pages ..they are paying us less so that we are in a position where we HAVE to create pages! |
They aren't paying us to create pages. They're paying for clicks (and, with smart pricing, for perceived results).
Overall EPC probably took some kind of hit when smart pricing was introduced, but I can honestly say that both of my sites/channels have been remarkably steady for well over a year. My traffic levels have been on a bit of a roller coaster, but EPC and CPM still fluctuate in the exact same range as when I first joined.
As for pages: I'm certain the LAST thing Google want is for AdSense sites to keep pounding out new pages to flood the SE's with.
"perceived results" indeed. According to who's perception? Google's? Probably not. The advertisers? Most likely.
As I said, google has created, through smart pricing, a way for advertisers to get more traffic for less. That is a given. The advertiser only has to tell Google, "these ads, or these keywords, from this website, are not convertering well." Viola, their prices go down.
BTW: efv, I hope we can let bygones be bygones, though I am still hard-headed and don't agree with you most of the time. Actually, I find it had to believe, with the dollar down against the Euro, that your epc would have remained the same over the past 18 months, knowing your niche (not hard to figure out).
Just thinking out loud, I wonder what these lowball, smart pricers would do if I cut them out of the loop, put them in that file... whatever it's called, banned sites. I currently have nothing in there, as I believe all clicks are good clicks. I really do. I just believe that higher paying clicks are better clicks.
Bill, no, I haven't signed up for adwords, and I should, and will, AS SOON AS I MAKE ENOUGH FROM ADWORDS TO AFFORD IT. j/k.
Thanks for your help.
Overall, I can't complain, though I look forward to the day that there is more than one network. I will likely stay with Google at that point, because there will be competition for GOOD SITES and advertisers will pay more to be on them.
If this were a ball game, I'd say that we're still in batting practice. The other team hasn't even shown up, so there's a long way to go.
"Just thinking out loud, I wonder what these lowball, smart pricers would do if I cut them out of the loop"
I think this depends on the niche, the quality of your site, the number of advertisers, and how many other publisers exist to carry ads for this niche.
As a related hypothetical, if you dominated a certain content niche for which there were very few quality publishers and the only other publishers were scrapers, reducing the amount of page-space available to adsense would seem to have the effect of driving bid prices up. But this probably only works if you really dominate with a capital D.
For what it is worth:
I for one am getting tired of all this *smart pricing*, *non-reliable*, F*** the publisher thing.
Therefore, since January, I am replacing Google Ads on my website with direct advertisers.
Much more work, BUT, reliable revenue coming in independent of any smart ass ideas that those engineers at Google come up with.
And, from advertisers who I know, who know me and my website and are willing to *communicate* with my audience instead of going down the lazy, push down, 5 cent lane.
A Google engineer is somebody who went from College/University straight to the Googleplex without ever experiencing what *survival* in the real world means.
I dont call them *Googlers*, I call them *Bubble Kids* - they are living in a phantasy bubble of their own.
In short: AdSense will die within the next two years because it TAKES A HUMAN MIND TO MAKE GOOD ADVERTISEMENT - the computerized approach is bound to fail.
|"perceived results" indeed. According to who's perception? Google's? Probably not. The advertisers? Most likely. |
Well, Google concocts the formula. Not all advertisers use conversion tracking, so Google is probably using broad assumptions based on the data that it does have. (E.g., that X type of content tends to convert better or worse than Y type of content does.)
|As I said, google has created, through smart pricing, a way for advertisers to get more traffic for less. That is a given. The advertiser only has to tell Google, "these ads, or these keywords, from this website, are not convertering well." Viola, their prices go down. |
Maybe, though we don't know how often (if at all) smart pricing is based on results from specific sites. And don't forget that, if the advertiser is getting a discount, the gross amount that Google collects is smaller than it would be otherwise. So Google doesn't want to be cheated any more than we do.
|I find it had to believe, with the dollar down against the Euro, that your epc would have remained the same over the past 18 months, knowing your niche (not hard to figure out). |
Believe it or not, quite a few Americans are still visiting Europe (I saw plenty in Paris last week), though I imagine the numbers of American backpackers and other budget travelers are down. Also, Europeans continue to travel close to home--and to click on geotargeted AdSense ads when planning their vacations. (Plus, they have a lot more vacation time than Americans do. If the U.S. government would mandate four- or five-week vacations, the domestic travel sector would be rolling in dough!)
|Therefore, since January, I am replacing Google Ads on my website with direct advertisers. |
Replace AdSense? Silly, I've had direct advertisers for years and my AdSense money is currently outperforming direct advertisers 3-1. However, with that said, I've got an extra $20k in direct monthly advertising space that I'm not aggressively pursuing and next month I plan to fill half or at least a third of it.
Good luck with your efforts as it's the right way to go, I just recommend doing BOTH and double your income.
I can't say that Smart Pricing is hurting me. Sure there have been ups and downs, but I suspect that's more the advertizers than SP.
Advertizers come and go, raise and lower bids, change ad copy, change landing pages, etc. All of which can affect a publishers results, and there's little if anything we can do about that. They're trying to find what works best for them, just as we try to find what works best for us.
It might affect Smart Pricing, but the results of outside factors shouldn't be confused with those of SP.
Whatever has happened, my CTR has continued a slow but sure upward trend and eCPM is following the same path overall.
Why? Who knows, it's not because I've moved my ad placements or changed formats. It's quite awhile since I messed with those.
New content? I have added a hundred pages or so in the last couple of months. About half of those have Adsense on them. The rest are ad free technically, but like all my pages the ad free ones have links to pages that perform pretty well.
Traffic has actually been down about 10% lately, compared to January. But earnings are fairly stable.
If publisher pages are too general they seem, in my experience, to attract ads that get low CTR, and probably (I'm guessing here) low conversions. I've got a ton of those, most of my pages actually. Tough luck for me, but I'm not changing my pages just to attract different/better ads.
On the other hand pages that are writtenn so they motivate a reader to ask questions, or to want a specific item/service seem to attract great ads most of time. My experience has been that those pages get great a CTR and eCPM.
While we generally talk here about the negative effects of SP it should be noted that it probably can cause earnings to go up as well.
EFV, rethinking what I said about Americans in Europe, the longer W stays in office over here, the greater the flow of US ex-pats, and I'm sure many, if not most, are heading across the pond. You may well be in the garden spot.
It gives me little consolation to think that the misguided policies of the US government could actually be benefitting somebody, because those beneficiaries happen to be Europeans!
The world gets stranger and more interesting every day.
Also, in response to the fellow who mentioned generalized pages and low epc, my site is similar. I don't write to satisfy the ads, I write to inform. So, that may be the root of my current condition because I've been working on general topics and not very specific ones, of which I have tons to do.
I guess I should get back to work. Thanks for everyone's suggestions. Unfortunately for you all, I'll be back.
I agree with jahfingers, is there any proof smart pricing is being implemented at all? I believe smart pricing is about ad placement, the highest bidder only pays one penny more per click than the next highest bidder, and so on down the line. If one bidder drops out, lets say the fourth highest bidder, then the top 3 bidders will be paying much less per click.
Last Month when EPC dropped to it's lowest level I started cutting all second rate advertisors (for my main site)using the Competitive URL ad filter .I have added over 150 advertisors who's sites are nothing more then garbage sites .
In that time my EPC has nearly doubled from it's lows but still almost half of where it should be but considerabley better.
I have probably thousands of advertiors so I cant get them all (the crappy ones)but EPC does seem tobe climbing in direct relationship to screening my advertisors.
AND I am know sending my traffic to better quality sites for the most part.
I wish Advertisors had the same option.. to be able to not advertise on websites they dont want to.
dollarshort, that's not what smart pricing is. Here's a link to a page on Google's site where they mention it. The discussion is vague, as usual, but the phenomenon is real.
There is one thing horribly unfair about smart pricing: We publishers have NO INFORMATION. I would very much like to optimize some of my site so that it delivers better quality customers to advertisers, so that they convert well for the advertiser, so that the advertiser makes more money, so that I earn more money. Everybody wins.
I have no idea. Google if you are listening here is what I need to make smart pricing work for me, the publisher, too: You need to give me statistics on conversions. I need to know which of my channels convert well for advertisers and which don't. Then I can figure out what works and concentrate my effort on building channels that convert well and everybody wins.
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