How to make Smartpricing work to your advantage

A four-step, EPC-based strategy to maximise income and beat junk ads

[21_blue]

An EPC-based strategy
The most important number to publishers is, as for other businesses, bottom line earnings. But most successful businesses focus on improving other numbers in order to succeed, eg: customer feedback rating, quality measurements, etc.. Many Adsense publishers seem to concentrate on eCPM, valid for some inter-advertising-source decisions, but in this post I’m going to outline a strategy based on EPC that, imho, has a number of potential benefits for those looking at intra-Adsense decisions.

This strategy won’t increase the potential earnings of your site – only additional content or functionality will do that – but it will bring your site’s earnings nearer to its potential. That is, it won’t increase your site ceiling, but it will take your earnings more consistently to that ceiling.

Background
I had significant success last year with an EPC-based strategy. After experimenting with various other approaches, I was prompted to return to this strategy by a recent thread [webmasterworld.com] started by Chris999. This proved to be an important piece in the jigsaw puzzle of smartpricing. Since then the pattern of last year has been repeated: earnings have been at a consistently high level, compared with much greater ups and downs previously. In fact, average daily earnings are now running at a record level, despite the slight decline in visitor numbers, normal for my business-oriented site as we approach Easter.

Why focus on EPC?
EPC, indirectly, provides “customer feedback”. Whilst Smartprice has an account-wide element, updated once or possibly twice a week, it also has a page (URL-oriented) element that seems to be updated daily. Although Google don’t provide us with data on conversions and other smartpricing factors, EPC gives us feedback on the impact of smartprice.

If, when measured over a month’s timescale, EPC on a page is in the same ballpark as Adwords prices, then the page is probably not being smartpriced downwards, or not by much. But if the page EPC is significantly lower, then the smartprice algorithm reckons that the page is a problem for some reason, eg: poor conversion rate or content that is not directly relevant to advertisers. That is, EPC (when related to Adwords rates) provides quantifiable customer-feedback on the performance of the page.

As with other businesses, the key to success is to identify where there is poor customer feedback, identify the cause of that poor feedback, and then resolve the problem. When I’ve taken this EPC-based strategy on my site, the benefits have been an increase in site income, junk ads disappearing off the site (removing the need to block them), and an improvement in site stickiness.

There is no guarantee that the strategy works for you, but I lay it out here so that, if you have the time and inclination, you can give it a try. The strategy also has some other spin-off benefits, such as better quality clicks for advertisers, increased income for Google, less income for purveyors of junk ads, and if lots more people did it, a better reputation for the Adsense scheme.

The EPC-based strategy
The first step is to collect relevant information. You need to know:

1. the EPC over the last month for the most popular pages on which you have Adsense (I monitor the top 200). You can do this by setting up URL channels (specific custom channels can provide more accurate data, but it’s a lot more work and the URL channel information is good enough for this purpose). It is important to collect this information for a month, because that is the period over which smartprice operates. Any period less than that yields increasingly unreliable information.
   
2. the current Adwords rates for your niche, or for the various niches covered by your popular pages. You can get this information by setting up an Adwords account and using the traffic estimator.
   
3. which pages are being hit hard by smart price. You can work this out by identifying which pages have a very low average EPC by comparison with the Adwords rates (this can be made easier by downloading the CSV file of your URL channels into a spreadsheet, creating a column to calculate EPC, and sorting the list into ascending order of EPC).
   

The second step is to try to improve EPC on the worst-performing pages. You can do this by following other advice in this forum, eg: moving ads to above the fold, reducing the number of ads on the page, ensuring that the most visible ad block loads first, etc..

The third step is to monitor your changes at least until a couple of days after your next account-wide smartprice update (I’ve described how to work out when that takes place in my Golden Gate post [webmasterworld.com]).

The fourth and final step is to remove ads altogether from low-EPC pages. Replace the ads with links to other pages on your site, promoting higher EPC pages. Don’t try to dupe users into going to pages to click on ads, try to maximise the chances that they will find a page relevant to them.

Final comments
This strategy depends on you having a content-rich site, with easy site navigation, and your willingness to spend time optimising your most popular pages. Although it requires an investment of time, it is mostly a one-off investment and will repay your efforts.

[Juan_G]

About the link unit question, in my testing adding a link unit -for example one horizontal under a leaderboard- does not seem to bring a bad smart pricing effect, it just adds some income. When I say "some income" it can be sometimes moderate and sometimes great, just like when I wrote about "some revenue increase" after removing non-performing, very low eCPM ads (in that other case, often a good increase some days later, or maybe one or two weeks after the removal, as said possibly due to an EPC effect similar to the one explained by 21_blue).

Link units seem normally OK (excepting in the case that the increase in earnings is very low, which can happen), but things are different when adding a second "normal" ad unit. When testing it on my sites there is a clear bad smart pricing effect, but for other webmasters multiple ad units seem to work well, especially on long pages (however, users seem to prefer short pages). Perhaps they work well for them because those webmasters are, most probably, in popular niches with lots of good ads. We can see that the Google serps show a different number of ads depending on the topic of the query, surely the optimum number of ads that they calculate for the search network.

[A_gnes]

Hi

I'm new in Adsense BUT when I read all "optimisation" tips I cleary see that ALL "optimisation" is only to increase number of clicks and "purge" Adv. from money.

A few examples:

1. When You remove border from ads many user thinks it's not adv. but text on Your site and clicks

2. The same aplies when add. colour is the same as text on Your site - You cheat again users

3...(all others "optimisation" tricks)

Of course I do the same and don't hide my adv. on bottom of my pages but anyway it's cheat for sure :-) and we all make profit from this cheats (esp. Google)

Regards

[hunderdown]

A_gnes, I think you misunderstand the effect of many of the optimization "tricks." Users are so used to ignoring ads that we need to get them to LOOK at them. Using the site's color scheme is one way to get them to do that.

On my site, at least, if I put the ads at the bottoms of my pages, and gave them a contrasting color, thereby reducing clickthrough rate to a small fraction of what it is now, I would NOT make the advertisers happy!

[21_blue]

A_gnes wrote:

ALL "optimisation" is only to increase number of clicks and "purge" Adv. from money

Welcome to WW world, A_gnes.

Actually, this thread is about reducing the number of clicks. But the particular methodology used, using EPC as a customer feedback mechanism, reduces poor quality clicks, leaving mostly qualified traffic which thereby improves the conversion rate for advertisers.

This is a win-win(-win) because advertisers get much better quality traffic, publishers get more income, and google get more income as well.

[Juan_G]

hunderdown wrote:

Users are so used to ignoring ads that we need to get them to LOOK at them.

21_blue wrote:

using EPC as a customer feedback mechanism, reduces poor quality clicks

Yes, we need a balanced good middle point, minimizing ad blindness without confusing users. For example, if we flood our sites with low quality, non-performing ads, we are punished by our users with ad blindness and a low CTR. If we cheat or confuse users, therefore reducing conversions for advertisers, we are punished by smart pricing with a low EPC.

Google seems to think that blending is correct up to some degree (see the ads on the Google search results, for instance). And if a particular methodology, like 21_blue's, results in a healthy EPC for the medium and long term, probably you are doing the things right.