Forum Moderators: martinibuster
Smart pricing lays the full responsibility of the conversion rate in the hands of the publisher.
If an advertiser makes a bad ad copy or sells a bad product there is not much a publisher can do about that we get punished for that with smart pricing.
With adwords it's the other way around if you have a bad CTR your ad campaign gets disabled and it's the advertisers responsibility to make sure you get a good conversion rate and CTR.
Also why is google hiding so much from us about this smart pricing I would like to have an indicator when smart price is effecting my earning positive or negative in my stats reports so I can work to improve it so the advertisers get a higher ROI.
So why is there no smart pricing with adwords?
I know why because google has gone mad google is now evil :(
While I don't like to see this in my AdSense program it turns out to be a push for us - Save on one side - Lose on the other.
We get a great benefit from Smart Pricing in our AdWords campaign with many terms in the 3 to 4 cent range.
Where does it say smart pricing in any way affects adwords advertisers? I am absolutely sure if I pay $1 per click to appear in roughly position 2 on the adsense network for a particular phrase, lots of those publishers are only getting pennies for those clicks because they are scraper sites. My cpc does not get reduced because of this.
The ability to get low priced clicks on adwords has nothing to do with smart pricing on adsense as far as I know.
I think smart pricing was introduced to try and halt the increase in number of scraper sites. I dont thik the missing cash goes to anyone other than google. I'd love to be proved wrong though.
You said:
If an advertiser makes a bad ad copy or sells a bad product there is not much a publisher can do about that we get punished for that with smart pricing
That is not the way I'd expect it to work. Google looks at the average conversion of a campaign. If clicks from your website result in below average conversions, then you may be hit with Smart Pricing.
However, if you're below average, then it obviously means that some other websites convert very well for the advertiser. So it's not down to bad copy.
I believe Smart Pricing goes way beyond this aswell by looking at how your clicks convert to 'actions' across a multitude of advertiser campaigns across different accounts.
It's all down to averages at the end of the day. Smart Pricing says "On average, your website converts to sales less than other websites". And when you're dealing with the figures Google are dealing with, those averages become quite accurate over time.
If anything, with Smart Pricing, publishers are up against other publishers, rather than advertisers' bad copy.
If we don't send letters to Google they won't do anything.
I think we should send letters to Google explaining why we feel that Smart pricing is a one sided approach and hopefully they will listen and do something about it.
Advertisers, not publishers, are Google's customers. So Google obviously isn't going to make any changes that would drive advertisers away (especially if it has to choose between satisfying advertisers and low-performing publishers).
It's normal, that with increasing impressions the CPC goes down, since there is more advertising space for the advertisers. It's also fair, that a said gets paid less, if the users from their site don't convert very well.
Smart pricing is there for a reason, not to bully us publishers.
it works a little differently, but at the end of the day it is a black box that controls how much an advertisers pays per click per keyword.
in other words, google leaves plenty of mystery on both sides of the equation (adwords and adsense).
Smart Pricing says "On average, your website converts to sales less than other websites".
How can Smart Pricing say this when Google has no tracking info for my industry?
How can Smart Pricing say this when Google has no tracking info for my industry
why wouldn't there be any conversion info from your industry? i believe that google says that about 10% of advertisers use google's conversion tracker. considering the sheer number of advertiser's they have, it is likely that at least some of the advertisers are using conversion tracking.
keep in mind that conversion is not necessarily associated with sales - it can be a newsletter signup, an inquiry or other actionable business result.
It's normal, that with increasing impressions the CPC goes down, since there is more advertising space for the advertisers
Not the way how I understand Adwords works. It's not about impressions, it's about price and CTR.
It's also fair, that a said gets paid less, if the users from their site don't convert very well.
It's fair if all advertisers allow Google to track conversions (advertisers often believe that giving Google that vital commercial data is very dangerous - like putting the cat in charge of the pigeons), if conversions could be tracked across every industry, if advertisers' ads are distributed evenly across all topical publishers, and if there is a large enough sample of each advertiser's ads on each topical publisher's site.
Nah, even then it's not fair unless you factor in a penalty/reward for advertisers' conversion skills (or lack of them).
That the SP system is seriously flawed should really be beyond any reasonable doubt.
How can Smart Pricing say this when Google has no tracking info for my industry
When smart pricing was introduced, Google used the example of types of content converting at different rates. Now that Google has 1-1/2 years of experience with smart pricing, it's reasonable to assume that Google has vast amounts of statistical data on all kinds of things. For example, there might be a solid base of statistical data suggesting that, on the whole, clicks from a page with three large "blended-in" AdSense ad units will convert at a much lower rate than clicks from a page with one ad unit that's clearly identifiable as such. So it wouldn't matter if the page were about blue widgets or fuzzy pink whatsits: the key factors would be the ad-to-content ratio and the integration of the ads.
Now, some publishers might object that Google allows multiple ad units and blended-in ads, but so what? That doesn't mean Google shouldn't apply discounts if statistical data indicates that conversions are less likely.
Smart pricing is a necessity, because advertisers aren't going to pay full retail for low-quality leads. Without smart pricing, sensible advertisers would avoid the content network altogether.
It's interesting though (and may even have a ring of truth to it). Let me get this right. If there's any truth that they're using data like this then my best option is to remove two out of three Adsense ads on the page, fill the page with ads from Chitika and elsewhere, make sure that the only content above the fold is one Adsense ad.... and actually benefit from sending advertisers lower quality clicks. ;)
For the record: I have no problem with low quality leads earning less than higher quality ones.
[edited by: oddsod at 5:39 pm (utc) on Nov. 8, 2005]
I think otherwise too many publishers will be jumping ship as equally lucrative alternatives to Adense become available.
For the record: I have no problem with low quality leads earning less than higher quality ones.
I agree with oddsod on that. What I don't understand is why they keep everything so secretive. Being a publisher effected by smart pricing is like being on double super secret probation like in the movie Animal House.
It's not a perfect system, but I doubt Google will get rid of it in the face of competition from Yahoo. In fact, I predict that Yahoo will either adopt a smart pricing system of its own, or be far more restrictive about what kinds of sites they allow in their program than Google is....
Smart pricing is meant to discount clicks on sites that aren't as effective for advertisers, but if we knew how it worked in detail ...
That's the typical argument against transparency i.e. that it will allow the system to be gamed.
If you had a system that was fair and rewarded publishers based purely on the quality of the traffic they sent then what's there to game? We'd all work to improve the quality of our traffic.
If it's a system not designed to reward the better publishers but to give the impression to advertisers that they're paying based on quality... then you'll want to keep most of the details under wraps. As illusionists do.
A really efficient system would reward publishers who send quality traffic at the expense of publishers sending rubbish traffic. It would also reward the advertisers who are better at converting at the expense of the imbeciles with landing pages that don't work in IE or Firefox. Isn't that the ideal system the serious player should be working towards? That's surely the future of this game. No?
quality score.... is a black box that controls how much an advertisers pays
A couple of years ago I dropped a lot of other programs and replaced them with Adsense since that had better returns, and now I'm making more money by doing the reverse on some sites.
If you had a system that was fair and rewarded publishers based purely on the quality of the traffic they sent then what's there to game? We'd all work to improve the quality of our traffic.
IMO, such a system is impossible. That's what Google is approximating with Smart Pricing, or trying to. But in the real world, there's no simple way to say what is quality traffic and what isn't. AdSense tries to identify the characteristics of quality traffic. Maybe they don't succeed in doing so. But--call me a cynic--I think any open system that tried to do what you suggest WOULD be gamed, because it's harder to create quality than to create "signals" of quality. Yes, some people would try to create quality. But not everyone.
I'm not in love with Google but I'm not in a hurry to dismiss the AdSense program as stupid or evil. I'm aware of the alternatives but so far, none of them have all of the advantages of AdSense, for my site.
Pagerank "worked" for awhile. This would too. Harder to game than Pagerank because it would be expensive to be powerful.
there's no simple way to say what is quality traffic and what isn't.
I don't care if it's easier to create signals of quality - their job is to detect quality. Find a way to do it! Google problem, not mine. I never said the Adsense program was stupid or evil. My comments on smart pricing remain the same: blatantly unfair and possibly little more than smoke and mirrors. Maybe that's the common ground that we all agree on ;)
The economics are that in the longer term publishers will go with the program that gives best returns.
And Advertisers (the reason cpc programs exist) will go with the program that gives them the best ROI. In this case and because of smart pricing...Adwords.
You are saying that because you are buying the Google PR machine, not because you know how it works. If you did a bit of research into smart pricing, you'd find the opposite is true.
After doing several days of research I found enough holes in Adsense and Adwords to drive a truck through it. If I were a spammer I'd have a field day. Spider legit sites. Munge them. Put out site after site. Use a couple tricks to simulate high conversion, and slap on adwords arbitrage to cash in. And that last bit artificially raises the prices true advertisers pay. And where do they pay the higher prices? On the spam sites.
This scheme costs the publisher, costs the advertiser and gives Google first and the spammer second, the bulk of the reward.
If you had a system that was fair and rewarded publishers based purely on the quality of the traffic they sent then what's there to game? We'd all work to improve the quality of our traffic.
The reality is that many AdSense publishers are lazy, are prone to short-term thinking, or have technical skills but lack content skills. The guy whose software churns out a 100,000-page scraper site may not know how to build a site that delivers high-quality traffic to advertisers. (He was probably cranking out boilerplate affiliate sites before AdSense came along, and he'll be vomiting get-rich-quick "content" for The Next Big Thing when the easy AdSense money goes away.)
It's not your problem or my problem to work out the difference - it's Google's....I refuse to believe that a properly working system is beyond the realms of all possibility.
So what's the big deal, then? If the Smart Pricing formula isn't yet up to snuff (I'm not saying that it is or isn't), then it will get better with time, just as ad targeting has improved with time. Evolution doesn't happen overnight. (Besides, no one is forcing publishers to accept smart pricing--publishers who aren't happy with their AdSense revenues do have other options.)
It's not a perfect system, but I doubt Google will get rid of it in the face of competition from Yahoo. In fact, I predict that Yahoo will either adopt a smart pricing system of its own, or be far more restrictive about what kinds of sites they allow in their program than Google is....
Exactly. It's all about delivering value to advertisers. Also, which publishers are going to abandon Google because of smart pricing? That's easy: They're the publishers who, according to Google's calculations, are delivering lower-than-average value to advertisers and lower-than-average profits to Google. From Google's point of view, it may be a blessing if those unhappy publishers make a beeline for Yahoo or MSN.
I am talking from my personal experience. I already got hit by Smart Pricing a while back.
But I've also been with adwords for over 18 months now and I will never dream of switching precisely because of Smart Pricing (Whatever it is) but it works for me.
I spend .04/click and adsense pays me .35/click (on the increase)
I don't know what it is but my advice to anyone reading this thread is don't focus on trying to fool your customers into clicking the ads but instead build a truly useful website with original content in a niche where customers are going through their decision phase of the purchase process and they will click even if the ad is an eye sore.
