Forum Moderators: martinibuster
I've been hearing all this talk about smart pricing... what exactly is it? I have searched Google AS's help directory with no results.
Thanks
If it's actually done that or not is debatable.
Nobody really knows how they work out if a click converts or not, as most advertisters don't use the conversion tracking facility. Therefore how Google work out what works or not is based on "Other factors". Many people here feel it's pure random guesswork.
Many people here also feel that smart pricing works to cap income. Google are not two cool dudes who made this neat searchengine to share with us - they are a multi billion dollar global concern answerable to investors. Therefore if they can cream off excess profits from websites that perform well they will (and do). It's what businesses do, and I guess Google's paranoid secrecy is also what businesses do.
So if you have clicks that Google think haven't worked, you will get the amount you earn reduced. The advertisers get a discount passed back to them, but as an advertiser I have to say that I think Google have most of it.
If you site works well, and gets lots of extra clicks that do work, then Google will up it's rake off and still discount your earnings. I've just had a promotion to #1 on Google search for my keywords only to be rewarded by a drop in earnings per click, capping my income. The usual pattern.
Nobody really knows how they work out if a click converts or not, as most advertisters don't use the conversion tracking facility. Therefore how Google work out what works or not is based on "Other factors". Many people here feel it's pure random guesswork.
Sure, and some people here believe that Wall Street suits tell Google's search engineers how to adjust their algorithms--just as some people believe that dinosaurs were in the Garden of Eden with Adam and Eve. :.)
if they can cream off excess profits from websites that perform well they will (and do). It's what businesses do.
So why are they "creaming off excess profits" from some Web sites and not others?
Wouldn't it make more sense to concede the obvious: namely, that not all traffic converts at the same rate, or--to put it another way--not all Web sites or types of content are of equal value to advertisers?
Wouldn't it make more sense to concede the obvious: namely, that not all traffic converts at the same rate, or--to put it another way--not all Web sites or types of content are of equal value to advertisers?
Put it this way: in some markets (most?) the vast majority of clicks from the content network dont convert, as most sites are spammy made-for-adsense sites. A handful convert really well. Do the advertisers pay full price for only a handful of those clicks? I dont pay 5c for some clicks and $1 for others. I pay a consistent amount and very little of it converts. Nothing changed when smartpricing started, except for the publisher.
Ive said it before, smartpricing isnt needed if google controlled the sites displaying adsense, but theres waaay to much money in it for them. G have created these problems, and the mess the SERPS are in because of these sites, but they earn big from it so its not going to change. Fiddling with smartpricing wont fix it. Overhauling adsense would, but its too late for that now, the job would be too big.
That my experience anyway.
I've been hearing all this talk about smart pricing... what exactly is it? I have searched Google AS's help directory with no results.
Can anyone point to any communication directly from Google--official Adsense pages, blog entries, Adsense Advisor posts in this forum, anything--saying (or even hinting) what so-called "smart pricing" is or isn't?
Ive said it before, smartpricing isnt needed if google controlled the sites displaying adsense
What kind of control are you suggesting? Junk sites aren't the only sites that are unlikely to convert for advertisers. A perfectly legitimate site with high-quality content may convert poorly if it's reaching the wrong audience. For example, you might have a wonderful travel-narrative site about Elbonia, but if it attracts armchair travelers instead of people who are actively planning trips to Elbonia, clicks on ads for Elbonian tours, cruises, etc. are likely to be from travel dreamers who look but don't book.
In the offline world, being a "legitimate" or even a "quality" publisher isn't enough to guarantee healthy ad revenues. You've also got to be able to deliver the right audience. Why should the Web be any different?
Anyway,
If smart pricing was implemented to bring advertisers into content it's most likely a failure. It's not what advertisers want. As an advertiser, if a campaign doesn't work for me I shoulder that loss. It may be down to me writing the wrong ad, me targetting the wrong sites, keywords and for the wrong price etc. I don't expect Google to do anything more that give me some analytical tools to enable me to tune my campaigns better. I don't expect Google to decide where my clicks do and don't work without disclosure of how this works.
In short, smart pricing isn't what advertisers want, and it doesn't address their main concern - click fraud. Whilst I accept the losses involved in a failed campaign through poor ad copy, wrong targetting etc. I can't accept click fraud. A discount based on who knows what in place of any real attempt to deal with click fraud doesn't answer my concerns. I don't want to see sites that have "Click my ads", or click traps containing nothing other than ads and a disabled back button. The visitors click to get out of the site - maybe on one of my ads. Yet even if you report these to Google they mostly stay online unchanged.
Many advertisers don't really see any form of discount - we just have to trust that Google is giving us one. A huge leap of faith, and not one that encourages people in to content. Dealing with click fraud properly would.
Nobody really knows how they work out if a click converts or not, as most advertisters don't use the conversion tracking facility. Therefore how Google work out what works or not is based on "Other factors". Many people here feel it's pure random guesswork.
Sure, and some people here believe that Wall Street suits tell Google's search engineers how to adjust their algorithms
Actually I hadn't heard this one, but now you mention it, it does have a certain ring of logic about it.
So why are they "creaming off excess profits" from some Web sites and not others?
Why on earth wouldn't they? I'm suggesting that the more profitable your site is, the more they will cream off. Nobody knows the formula Google use, and that may be for a very good reason. They are a business interested in protecting their investors by making profits. It's logical that they would up their percentage on the more profitable sites. Nobody can check if they do, and it makes sense that they would.
Wouldn't it make more sense to concede the obvious: namely, that not all traffic converts at the same rate, or--to put it another way--not all Web sites or types of content are of equal value to advertisers?
This is true, but the implication here is that my site earns less per click as a result of being promoted to number one in the serps on my keyword. Somehow, that makes my site less valuable to advertisers and Google? or could it be that the increase in traffic and clicks means I'm more profitable so they can rake off more?
Every time you have a genuine sudden increase in clicks and traffic, smart pricing whacks you. It also whacks you on the way down just to make sure.
Smart pricing doesn't answer advertisers concerns about the content area, and we distrust it. Publishers also distrust it. Both sides see it as profit making scam for Google - nothing more.
Thorough tracking and in-depth research on my sites and those of my clients has proven (at least to me) that the RESULTS of smart pricing are more or less random. I'm not saying there is anything random about the smart pricing algorithm, just that the data on which the algorithm does its magic is so woefully incomplete that the results are random.
I've been hearing all this talk about smart pricing... what exactly is it?
I'll tell you what it isn't: It isn't what it says on the tin.
It's a PR exercise to soothe advertisers. Google has no way of tracking conversions in some industries and has deceptive conversion info in other industries (at least one Google advertiser has said he that he regularly feeds Google conversions with rubbish info as he doesn't want to share valuable data). They recognised this hole in the argument a long time ago so didn't rely just on "conversion" and to be on the safe side added that "other factors" could also be at play. Like their ability to guage quality from various indicators they track. They would like us to believe that their access to vast volumes of data is being combined with their technical skills to make the system equitable for all. As long as you take that all on faith and do not ask any questions.
Subsequent to a thread here Jenstar covered an expose on her blog. It seems largely like stuff she was under NDA on and couldn't discuss in public... till the thread spilt it anyway. It involved things like Smartpricing having an account wide effect i.e. one site/channel with bad conversions and it could trigger a smartpricing influenced drops across the whole account. Normally Google wouldn't respond to rumours like that, they ride it out. On this occasion they actually posted a "clarification" on their blog. A lot of words later the one thing that stood out in their blog entry was that they did not dispel any of the "rumours" and particularly did not deny the sitewide effect.
If smart pricing was implemented to bring advertisers into content it's most likely a failure.
The numbers in Google's quarterly earnings report certainly don't imply that it's a failure.
And yes, it's true that smart pricing doesn't address click fraud, but so what? That's like saying that store discounts don't solve the problem of shoplifting. Smart pricing and click-fraud detection are different matters that are handled by separate means.
And yes, it's true that smart pricing doesn't address click fraud, but so what? That's like saying that store discounts don't solve the problem of shoplifting. Smart pricing and click-fraud detection are different matters that are handled by separate means.
Click fraud isn't handled in any serious way by Google. No amount of smart pricing hype addresses that fact.
Advertisers don't really care that much about smart pricing. They do care about click fraud.
Smart pricing is *not* an inducement to many advertisers.
Click fraud *is* out of control, and that does put advertisers off. That is what Google should concentrate on, and do so very publicly if they seriously want advertisers to stay in content.
None of the above is rocket science.
What kind of control are you suggesting? Junk sites aren't the only sites that are unlikely to convert for advertisers.
I agree, but I would suspect smart pricing was brought in not to discount advertisers costs but to specifically try and lessen the negative impact of those spammy made for adsense sites. Which were only created because G didnt control which sites were allowed to show adsense. They created this problem and now fiddle at the edges to try and fix it.
Lets face it, 90% of the sites which reduce advertisers ROI on content are made for adsense, people throwing up complete rubbish just to earn clicks from advertisers. NOT the other 10% which are either incorrectly targetted sites or sites which for any number of reasons simply dont convert for a particular advertiser.
This may sound like Im angry or having a go at google, Im not, its their system they can do what they like with it. Just lets not get fooled into thinking smart pricing is great and was the next natural progression for adwords and adsense: it's a hack to partially fix a problem of googles own making. What does annoy me is how the SERPS are polluted with adsense sites, and every other search engine has to suffer the same spam in their search results, all because adsense wasnt controlled better.
Going back to the original question, what sort of controls, Im not sure it can be controlled now. I just think approval should have been needed for every site, not just the first for every account. There would be a lot less publishers, but boy the advertiser ROI and publisher revenues would be fantastic.
So why are they "creaming off excess profits" from some Web sites and not others?
Absolutely incorrect. If a publisher is smart priced, the advertiser pays less for those clicks. It is NOT a case of the advertiser paying the same amount for all sites and Google pocketing the extra.
Smart pricing is based on how likely you are to convert for the advertiser. If your site is less likely to convert, the advertiser will pay less and you will earn less accordingly.
It's difficult to believe claims that Google doesn't blatantly profeteer from smart pricing when you can see no evidence that it works for you as an advertiser, and plenty of evidence that it works against you as a publisher. It's not just me that reports this.
Smart pricing is based on how likely you are to convert for the advertiser. If your site is less likely to convert, the advertiser will pay less and you will earn less accordingly.
This doesn't explain my experiences every time I get an increase in site traffic. Invariable, any increase in site traffic and clicks is met by a fall in EPC. I've been promoted to #1 in the serps on my keywords, and the EPC has dropped as per usual. Can anyone give me a logical explanation as to why I am "less likely to convert" and Google thinks I'm worth less per click as a result of the recent promotion?
On two previous occasions when I've seen EPC fall as a result of traffic increase I've emailed Google. On both occasions they have sent me back a reply that smart pricing does not cap earnings, and the algorythm could not possibly be at fault. On both occasions EPC immediately ceased to fall, and indeed started to rise.
Therefore I have a hard time accepting any assurance that smart pricing isn't for the most part an integral component of Google's profit strategy. The real problem is not so much their taking a business decision to do this, but the lack of transparency with business partners. Without advertisers and publishers they would be sunk, but both advertisers and publishers are like mushrooms to Google - left in the dark and fed on ****.
Let's not forget that Google does some things extremely well. For the most part, the contextual ads perform very well. As EFV says, the program has managed to give many people a decent income from their webites.
But at the same time it should be remembered that Google is first and foremost a money making machine for it's investors. And that Google bean counting department clearly don't look any further than the next balance sheet, and short term profit matters - not long term stability of the program.
If Google want people to believe that smart pricing is in any way a benefit for publishers and advertisers they need to be much, much more transparent about how it works with it's business partners. They also need to be perceptive to criticisms of it, and be prepared to make changes.
I just think approval should have been needed for every site, not just the first for every account. There would be a lot less publishers, but boy the advertiser ROI and publisher revenues would be fantastic.
I used to think the same thing, but then I realized that the MFA crowd could just put their junk pages in subdirectories beneath their approved domains. To the MFA-site owner, it doesn't matter whether a scraper or other junk page is at www.junksite.com or www.legitsite.com/junk/.
This doesn't explain my experiences every time I get an increase in site traffic. Invariable, any increase in site traffic and clicks is met by a fall in EPC. I've been promoted to #1 in the serps on my keywords, and the EPC has dropped as per usual. Can anyone give me a logical explanation as to why I am "less likely to convert" and Google thinks I'm worth less per click as a result of the recent promotion?
While this might distract from the subject of SmartPricing...
A logical explanation could be that your traffic increase used up your higher paying advertisers' daily budgets, and lower paying ones stepped in, lowering your EPC? (Just a shot in the dark.)
Also, a marked increase in traffic on a page might not use up a high-bidding advertiser's budget, but it could easily use up the share of the budget that's available for the publisher's site.
It could also be that #1 spot doesn't convert as well as ranking #2 or #3 in the SERPS (though I find this hard to understand).
Or it could be people coughing in China [webmasterworld.com].
The real truth could be a lot simpler: Google is not infallible. They do not need to set out to dupe you, suffice if there are inherent flaws in the system that have the same effect.
I don't really buy the idea that top site has poorer conversion, but I'm not going to launch into a fight about that one.
I'd be interested to know if anyone else has tried the following with their stats:-
Use a spreadsheet and plot data on weekly and monthly charts. Plot EPC, clicks, earnings, impressions - whatever you feel is relevant and scale the graph lines so that they superimpose as much as possible. That way trends become blindingly obvious.
What I see from the weekly trend lines is that any sharp increase in clicks / impressions (similar trends BTW) results in a reducing of epc and levelling trend to earnings. It's the same every time, and also happened when I was earning half what I am currently.
The monthly trend lines show that an overall steady increase in clicks and impressions without CTR becoming affected will be matched with a trend line for epc that follows the earnings and clicks/impressions trends. If something changes over the long term (such as the current situation) then the line for epc falls away again - levelling off.
Although I would say that though budget exhaustion is likely to be a factor on this occasion, it doesn't explain the current trend to any great extent, and it certainly doesn't explain past occurrences.
DaveN
The monthly trend lines show that an overall steady increase in clicks and impressions without CTR becoming affected will be matched with a trend line for epc that follows the earnings and clicks/impressions trends.
That doesn't necessarily mean smart pricing is involved. (Smart pricing is a very specific tool; it isn't the only "Googlefactor" that could affect publisher earnings.)
1- A general discussion forum site with a thread about someone mentioning that they had just come back from a trip to Venice.
2- A travel planning site dedicated to Venice with insider's info and tips on best hotel rates, flights, attractions etc...
the same adsense ad about flights to venice appears in both scenarios, which one would you think would convert more?
Its not difficult folks, Smart Pricing is Smart and I personally thank google for it because it allows me to get paid more and guarantees a long term growing income.
I have quadrupled my traffic in the past 12 months.
My CTR has remained virtually constant.
My checks have stayed within a 10% range.
That means I am receiving basically 25% earnings per click as what I was a year ago. But, when I look at the cost of adwords in these areas I see no significant changes.
I have run my stats using a 30 day trailing average in order to smooth out the spikes. What stands out very clearly to me is that when I add a new section to a site the following pattern is followed.
1. New section, often entering a new niche
2. Within a couple of weeks good ranking in new search terms
3. An immediate spike in page impressions and clicks
4. A corresponding immediate increase in earnings
5. A long (i.e. 45-60 day) decrease in earnings per click
6. Within 60 days earnings have equalized as if I had added nothing at all
It sure seems something is stinky when I look at my figures.
WBF
I have quadrupled my traffic in the past 12 months
This does not necessarily mean you're getting the same targetted quality traffic as you were before.
There is no reason to believe that the quality of the traffic has decreased in any way. I operate in a very small, high priced niche for the most part. When one deals with widgets that range from $10k - $600k there are very few impulse buys, and conversions are seldom immediate (or consummated over the web for that matter).
I have worked very hard to have what is probably the single best ranked site in the niche, with top rankings across hundreds of search terms. My traffic increase is more a result of scarfing up minor search terms than can be attributed to anything else. Based on that, the traffic is probably even better, and more targetted than it was a year ago, since I am getting traffic reflecting humans searching out very specific subjects.
It is easy to pass judgment based on incomplete facts and personal bias and preconceptions. It is harder to discard the growing number of people that seem to have grounds to question exactly what is going on with smart pricing.
WBF
That's the crunch - you never know. Those who believe that smartpricing is a fair arbitrator will consistently find other factors that could take the rap for falling EPC. But would you accept you don't ever recall someone posting about a four fold increase in EPC when his traffic quadrupled? ;)
See, the thing is that if sp is what Google says - and it is not a cap - then it must work both ways and some should have seen massive earnings increases. In fact, these should be a lot more noticeable because in the above scenario his earnings would have gone up dramatically and he'd be making in two days what he was previously taking all month to achieve.
Accepted that people aren't as forthcoming of massive earnings increases as they are of decreases (though this has changed greatly and the newer breed of WW member is generally happy to post either way). But, I find it hard to believe that not one person has achieved an EPC rise of that magnitude. Not anyone with statistically significant figures anyway.
If someone clicks on an ad because he is interested, how will Google know that click was succesfull and that someone actually buys something on the website.
How can Google know if the click was valuable for the advertizer? Maybe that's where Google Analytics comes in the picture?
