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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.
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.
It is the very scenario that makes it so important for Google to protect their advertisers from low click to sale ratios, generated from pages and sites where the visitors all have a personal connection to the page/site owner, instead of quality random traffic generated from engines and mass advertising campaigns.
Google policy allows the actual total you make to be posted. You could, if you wanted to, post the totals for the last week, and prove that well-meaning peers did not elevate your earnings over the last few days. It would be an interesting test and prove whether or not smart pricing is really necessary to the blog/adsense problem.
I don't consider this thread to be as much a criticism of Google as a cry for help. Help to them and help to us at the same time.
Think it through. Do you honestly think a bunch of AdSense publishers are going to go over there and generate some bogus clicks for her? Hah, you couldn't PAY me enough to do that for anyone.
You have impressed me! Too allow this thread to continue when you have the ability to delete any criticism is both honorable and refreshing.
Why are you so upset? This seems almost personal. I see from your profile that you are in a similar business as Jen. I hope your feelings are based on ideas and values and not an attempt to discredit a competitor. That would not be very ethical.
Canít we all just get along?
Adsense responds to SP talk:
We've noticed a lot of talk recently about the phenomenon commonly referred to as 'smart pricing'. There are some misconceptions out there about this, so we wanted to provide a few facts about smart pricing
Google doesn't make money from 'smart pricing'
In fact, we make less money, since the cost to advertisers is reduced in order to provide a strong ROI. Ultimately, this leads to higher payouts for publishers by drawing a larger pool of advertisers and rewarding publishers who create high quality sites.
The best way to ensure you benefit from AdSense is to create compelling content for interested users.
I wish I could believe the statements above reflected reality.
Keep in mind that like most Google technology, our system for calculating advertiser pricing gets updated regularly. We're constantly improving our ad products
Well that's some good news. To take this to a positive note, let's hope that Google has taken this and similar threads to heart as constructive criticism and is planning to make positive changes.
More than conversion rate goes into determining the price of an ad: the advertiser's bid, the quality of the ad, the other ads competing for the space, the start or end of an ad campaign, and other advertiser fluctuations.
I want clarification on this.
1) The quality of the ad. This should not have adverse affects on the payout to the publisher - right?! I'm hoping this means that advertisers who write crappy ads have to pay more to get them shown.
2) The beginning/end of the ad campaign. Why is this in the algo? Does the cost per click go down towards the end of ad campaigns to try to suck people into dumping more cash into it?
I could ask questions all day in regards to that blog posting... it didn't answer anything - just provoked more questions. AHHHHH I'm pulling my hair out. Beating around the bush is not going to solve anything.
The only thing they said in there that I get any satisfaction from is "CTR is not" a part of the algo.
4. Remember the old chestnut: "Content is King"
We know - that's why scraper sites dominate the G Engine. It should be "Original Content is King"
it's not only possible, but common, to have a low CTR and a high advertiser conversion rate. It's also possible to have a high CTR and a low conversion rate. Don't remove the AdSense code from your site just because it has a lower CTR - it may be one of your best converting sites.
(Note that they stop short of saying "don't remove AdSense from low-converting sites". But low CTR in itself is not something to worry about.)
They KNOW there are a lot of people unhappy with smart pricing
They KNOW that smart pricing doesn't work very well, and they know that we know that they know that
They KNOW there is competition out there
Sounded to me like they are completely flummoxed, and a demon has been released they don't know how to deal with.
Actually, I can see the logic behind smart pricing, but they simply don't have the ability, or facilities to make it work. On my site I see ads for medical practices in NYC appearing in the UK. In reality, nobody in the UK is going to go to the US for this particular procedure, so if smart pricing came to the same decision, then logically any click from outside the local area (or US) SHOULD be discounted. BUT it seems they have no way of actually determining this information.
Smart pricing is pure guesswork - we know it, Google knows it, and now it appears that Google know that we know that they know it.
Come on Google - make it work or hit the delete key.
G - You can't possibly track conversions properly. Until you have full control over what is and what is not a conversion, the algo is crap. Perhaps doing something like checking to see if the surfer went a second page into the site would be Smarter Pricing (you better patent it before MS does), as the current method is my reason for dropping the majority of AdSense from my site in the last 30 days.
On some advertiser's sites - they could setup a conversion as a signup on a newsletter located in the crappiest location on earth, when in actuality they want you to leave through an AdSense ad... all the while actively reducing the amount they have to pay you because they are not allowing you to get credit for "conversions".
Enough ranting from me today - Time to get hammered. This crap has me so flustered, I can't stand to be sober for another moment.
[edited by: NoLimits at 10:56 pm (utc) on Oct. 28, 2005]
Hopefully we'll see a change shortly.
Many factors determine the price of an ad (...) Keep in mind that like most Google technology, our system for calculating advertiser pricing gets updated regularly.
This confirms that the algorithms (smart pricing, etc.) are really complex. All our theories, including mine on msg 35, can be only very partial simplifications in the best case.
Don't remove the AdSense code from your site just because it has a lower CTR - it may be one of your best converting sites.
Yes, that's why I wrote (msg 29) that, according to my limited testing (that of course can be wrong), the positive effect reported by publishers -after removing ads from very low performing pages- seems to happen "Only if the eCPM is really, extremely, low (such as $0 or $0.xx)." And (msg 19): "even if eCPM is not an exact conversion measure, only indirectly related". (At least, more related to conversions -by smart pricing action- than CTR).
On the forums, several times those publishers have received answers from others about failed tests after removing ads from pages with "lower CTR". The reply to those failed tests usually is (with other words) something like: "Maybe you removed too many ads", or: "No, we are referring only to really, seriously non-performing pages". I think probably this is right.
One of the various threads about this controversial topic is:
Removing Adsense From Non-Performing Pages
joined:May 6, 2005
I also have taken AdSense from some of my pages that were not generating money and I have seen an increase in money for the month for my efforts. Pages that don't bring you money should not have AdSense on them. Delete the ads from those pages and your other ads will increase in value.
I've been doing this for a long time - it works. I don't have more than one banner on a page as that has never worked for me for the same reasons - the ctr goes down, smart pricing hits the rest of the site. My advice is to put a channel on every banner, and dump the ones that don't work. That way, site ctr is optimal, and that seems to keep smart pricing happy.
The other thing that it seems to like is ctr stability. On two occasionas I've moved a banner and despite the same ads showing, ctr has gone down. Smart pricing hit me a few days later, so I moved the banner back. Smart pricing hit me AGAIN because ctr jumped. I emailed adsense to moan, and on both occasions got a canned email explaining that the smart pricing algorythm was not faulty, and on both occasions shortly after getting the email my epc returned to normal. It's my theory based on this that they have the facility to reset smart pricing for a site if it's gone haywire.
As an advertiser I don't think smart pricing works. None of the conversion tracking options apply to me, so I don't use it. I'm happy to pay for quality leads, but suspect smart pricing doesn't have a clue what they are. I prefer to call it Random Pricing(TM), as that's what it is.
Thinking about this, I'd rather it was about greed than stupidity. With Google we might have always felt they were greedy, but never stupid. Especially when it came to technical stuff. Double Talk to make up for an asisine algorithm that has been live for so long? Not to beat a dead horse...it's just that I'm so shocked.
They have lost something not given lightly. TRUST.I disagree. You gave them the trust very lightly. You trusted a company (whose legal responsibility is to their shareholders) to act as if their responsibility was to you, or your site's well being, or the stability of your adsense income. It is not. If you want to trust something, then trust a free market to provide alternatives in the case things aren't handled in an equitable manner. Those alternatives are available now, and so far, none can beat Adsense.
Has Adsense violated the terms you agreed to?
Missing from their list of 'misconceptions' is the report that smart pricing affects an entire account not just one page or one site. I'm guessing becasue it's not a misconception, and it's a fact.
I can't work out why they would want to do this, the only thing I can think of is there are not enough advertisers using conversion tracking so to get enough data they have to group your whole account together. I just don't see how that could be ideal for anyone..
Clickthrough rate doesn't affect advertiser return on investment
so, not 100% confirmed, that ctr isn't part of smart pricing algo, BUT
Don't remove the AdSense code from your site just because it has a lower CTR - it may be one of your best converting sites.
which reveals, that publishers can only guess conversion.
to the people who talk about performance: WHAT DO YOU MEAN WITH "PERFORMANCE" AT ALL?
if we speak of ctr or earnings in this context, forget it.
if we speak of a substitute for conversion here, agreed.
HOW DO YOU DETERMINE PERFORMANCE?
ctr? once again: forget it! when do you people put ctr as a measure of conversion out of your mind at last? there is no reason to believe, that one click out of 1000 (poor ctr) doesn't convert as likely as one click out of 10 (high ctr).
= confirmed by google.
epc? hmm, bad indicator. epc is highly keyword/topic related. low epc usually means low paying advertisers for that theme, no more, no less. sites with low earnings could possibly add a good value to your mix, dropping them could be fatal to your overall conversion.
so folks, keep on guessing and the best of luck to you by catching the real low performers.
In summary, I'd like to highlight what I feel to be the 2 biggest underlying problems in regards to smart pricing, as best I understand.
1) The biggest in my opinion - Advertisers do not have to track conversions, and can setup a conversion on something that is highly unlikely to ever convert.
2) There is no way for publishers to know how to battle smart pricing. It is obvious that we want our clicks to convert well for others, as it affects our bottom line as well - we need a conversion row in our statistics.
My question to you advertisers is - is there a way for me to look at your landing page (source code) and be able to tell what you have setup to be a conversion. I'm going to look into this - and if there is a way to tell, I will start to actively block those who have unfair conversion expectations.
Speculation: They realized publishers were happy. Too happy in fact. Meaning Google left money on the table. They wanted to increase their share. Instead of being upfront about it, they claimed to use something that would help advertisers. Smart Pricing.
What really happens? As soon as Smart Pricing gets turned on by *any one* of your domains, G just pays out less. But they don't hand that money to the advertiser. Nor do they give it to better quality sites. They pocket it.
If better quality sites saw more money, or advertisers saw significantly cheaper prices, we'd have heard about it. Since we didn't hear about it, clearly it went into Google's pocket. Their SEC filing shows 6X increase. That didn't happen by a miracle or a 10% increase in share as stated in their filings. They are hiding where the increase came from. Any accountant will tell you how easy that is to do...
They saw how effective that mind game worked on the publishers. So recently they came up with a similar mind game on the advertiser. They are "reducing" prices. Now it only costs 1 penny to use adwords. Not only that, but your keywords don't get "deactivated". Yippee!
But guess what? You try to actually use the thing and under 25 cents you can forget about any traffic.
Then on the blog they try to play angel and claim they are "losing money" on SP. Hah.
I'm so fed up with Google. I will never use adwords again unless it's to figure out what's going on with Adsense. And as soon as YPN fixes their glitches, it's going to be them or Chitika. Preferably Chitika.
Even if Google raises the ante again, it just isn't worth the hassle to invest time in them when they focus more on mind games than the innovations...even though I'll admit their innovations are often very cool.
Bring on YPN.