Crazy new theory on one smart pricing factor

What do you think?

[MikeNoLastName]

Over the last couple months I've been tracking an interesting set of statistics relating the Google SERP of a particular page, under the keywords apparently being targeted by Adsense ads and the PPC on that page. What I seem to be seeing is that pages which score on the first page of their SERPs or in general higher on the first page, seem to get a higher PPC. I've also noticed that as the same page rises and drops on the SERPs, like during this last update, the PPC for that page follows. Think G could be using their own SERPs to determine how likely a page is to convert for a keyword and thus the smart-pricing factor?
To clarify, I'm not saying JUST because it is #1 for search terms "tiny useless widgets" it will get a higher PPC than another page which is #25 for "the most popular widget in the world", but rather between two pages with the SAME targeted keyword, the one ranked higher on G will get a higher PPC.

[edited by: MikeNoLastName at 10:09 pm (utc) on Nov. 21, 2005]

[DamonHD]

Kewl: having gone to all that trouble to rank sites they might as well fold in the data, especially where they don't have conversion stats... Good thinking BatPerson(TM).

Rgds

Damon

[NoLimits]

Haha.. I got a good laugh out of this one.

It's a good theory, and possibly true to some extent - but this would mean that Google is making the assumption that their search results ARE 100% WITHOUT A DOUBT what the user is searching for.

There is no way that even Google can think this.

[MikeNoLastName]

DON'T they? :)

[DamonHD]

Hi,

It's entirely reasonable for G to use the ranking it has computed as being the best available (since if the ranking *isn't*, ITHO, then G would change it to be so).

That's not hubris, nor assumptive, just reasonable engineering, *especially* if it is just one weighted factor.

All just IMHO of course...

Rgds

Damon

[NoLimits]

See: Delusions of Grandeur

[malachite]

but this would mean that Google is making the assumption that their search results ARE 100% WITHOUT A DOUBT what the user is searching for.

Maybe it does! Maybe Google really thinks I want to see forty directory sites with adsense on before showing me the "real" website of the business I'm looking for at no. 41 ...

Darn it. Maybe those forty directory sites were just what I was looking for all along ;)

Or maybe, if the theory is right, the reason it shows me those forty sites first is in the hope I'll click on someone's ad ... Hmmmm, I wonder ...

[garyr_h]

Maybe this is why the scrapers show up so much in Adsense? :-P (joke only... hopefully)

[aeiouy]

Smart pricing is a measurement of a site's conversion level versus its click-through level.

It is unlikely factors like the orignating sites serp rankings would have any involvement in that.

[janethuggard]

I would be more inclined to believe the assumption is incorrect. My guess would be that since the site ranked higher, it had higher traffic, and therefore the ads would receive more page views, and have a higher CTR. If a site has a higher CTR, it may trigger higher PPC commissions.

Smart pricing is very much related to CTR, that is why we say not to use your own site as your browser homepage, it lowers CTR. This may be a real problem if you view your site alot from numerous machines, work, office, parents, grandkids... There is no way for Adsense to know those impression are you, and to filter them out of your impression count, if they would do that. Add a spouse, friends and family, also using your site as a homepage, and the impressions can become very bloated.

I have personally seen that CTR can increase dramatically, by having a larger pool of impressions, on a larger site. If I show the ad to 100 people, I may have zero CTR. But, if I show the ad to 1000 people, I may have a 20% CTR, just because the pool for the visitors was larger, and the clickers came further into the pool. All things are not equal front to back, top to bottom. The CTR can be wild throughout the day.

On a smaller site, with low traffic, perhaps only a handful of visitors per day arriving through a high search engine ranking listing, the CTR may be very high with low traffic. I see that alot. The market is more narrow, more closely defined, and therefore more targeted, so the ads are right on the money.

[jomaxx]

Higher traffic does not equal higher CTR. Low traffic does mean a higher statistical variation, but both up AND down.

In any case I doubt CTR is tied into smart pricing closely, if at all. Google has previously said that webmasters with low CTR pages shouldn't automatically remove AdSense from them.

As for the search results thing, I doubt that the page number on the search results is a factor, just because few pages are so one-dimensional that the search string will necessarily correspond to the ads being shown. Besides, you could just as easily argue that someone who has drilled down to page 2 or beyond is MORE motivated than someone simply clicking on the first listing that comes up.

[Max_M]

I tend to agree with this theory, I’ve seen it happening too many times across a number of sites i monitor.

Pay per click is closely tied to your rank on the serps.

serps geo targeting also play an important role. No 1-2-3-4 on google us, canada, australia, UK, NZ is much better (click pay wise) to no 1-2-3-4 on google in other countries.

Smartpricing places a sperate value on Each visitor (ip wise and the source of traffic).