Forum Moderators: martinibuster
I have this friend, who has a site of same niche. He, to, has relevant visitors, steady volume, and good payouts (indicating probably decent conversion rates for Google advertisers).
We meet and get to thinking... what if, on a lark, he were to place a link to my site's comparable page, and I a link to his? What if we did this in an alternating fashion... first he sends me traffic, and then I send him some, and we see what happens to AdSense payouts. Of course we do it in a way that induces click thru to the other's page, sans an AdSense opportunity on the refering page. Of course we stagger it randomly throughout the day, over several days, on both sides.
So my N clicks per M impressions historically paying $X average per click goes to roughly 2N clicks per roughly 2M impressions, and pays what? And his N clicks goes to roughly 2N, while his M clicks go to 2M (roughly)... what do we see with his payout?
I bet you can guess. And when we revert back to normal, without any cross links? I bet you can guess that as well. Stood up to a time test as well.
How can this be fair? How can this be "smart pricing" for anyone but Google?
As a general rule, i would not advise crosslinking between domains. This has lead to google penalties in the past, and maybe your adsense account may be OK, but your SERP standings may fall, or you may totally be removed from the index.
How are you getting double clicks and double impressions if you are simply placing links back and forth? Your traffic would remain the same without another link, so you would be sending away a portion of your traffic to the other site. I do not see how this would be increasing traffic and clicks for both parties unless someone is giving away more traffic than they are getting.
Please explain more. Be careful!
Smart pricing is just a friendlier way of saying Pay Per Aquisition.
There is only one problem with Pay Per Aquisition and that is you might be able to figure out how someone is converting and game that .. but that's pretty rare and would probably get noticed pretty fast so I wouldn't bother.
When it started a year ago it was a simple PPC model: the advertisers paid Google for every click, Google took a cut and paid the rest to the publisher.
Presumably, since the introduction of Smart Pricing, the advertisers still pay Google for every click? So is the amount they pay per click now influenced by the conversion rate (ie. high converting adverts cost more) with the same percentage payout to publishers?
Or is there now a basic PPC payout rate (lower than before) and a PPA bonus for publishers which Google holds on to if the publisher's conversion rate is too low?
It seems like the latter possibility would enable Google to charge the same rates to advertisers as it used to (ie. not have to increase them) while increasing its overall revenue, because it no longer has to pay out as much to publishers whose AdSense panels do not convert.
Is this right? Can somebody who uses both AdWords and AdSense shed some light on this?
Working from a small sample here {only a few hundred content clicks since April 1st}.
Each site was turned off except to pass traffic, so while numbers didn't exactly double they did approximately increase by the expected traffic amounts. As a test, it was good enough to convince all involved that the traffic was indeed transfering sufficient for the test.
As for conversions, sure - another escape route to deny any concerns of bias. These reasonable people do not accept that these two sites, when handling each other's traffic during this test (plus the before and after experiences) would have an impact on conversion rate of any considerbale magnitude.
Both sites saw expected higher impressions, expected higher clicks in proportion to the traffic and prior history of CTR, and *lower* pay per AdSense click on both sides. This was practically uniform through the randomized testing periods as well as afterwards. Both sites are back to normal and back up to the higher pay outs they enjoyed before this little diversion (one is up a bit).
I did the test for a reason. Now I have validated my suspicians that there is a programmed bias that steals from the publishers. I have no interest in figuring out exactly how it works, but I will now work with that understanding. It also clarifies for me why the big media publishers have negotiated payouts (and don't allow "smart pricing"). Who inhis right mind would agree to a deal where the more successful the publisher, the smaller the profit sharing?
While Google may have implemented smart pricing in a buggy way at this precise moment, it's still a moving target and it's not hard to see that they are converging on pay per aquisition..
The forces that be are pushing them down that path, and even if they haven't arrived at their destination yet, they will eventually have to end up there. Especially when CJ Evolution comes out.
However, I agree and it has been stated before that the fuzziness of the system allows for Google to pick the pocket of the small publisher.
But this isn't a problem with the idea of smart pricing, this is a problem with the implementation. Your comments are interesting, but at the end of the day .. how are they relevant? Different programs pay different in different circumstances. Compare against affiliate links , Ad Sonar, etc etc and whoever pays more plays more.
If your point is that that Google and their compeitition moves towards a pure play per aquisition as soon as possible, then I agree. If your point is that Google has implemented their system to give them lots of room for revenue error .. well, given the lack of competition in this space, would you seriously expect anything else?
Did the total number of conversions increase? If so why?
My read gave me the impression that you were just recycling total traffic.
If you were you can't expect total revenue to increase.
I did the test for a reason. Now I have validated my suspicians that there is a programmed bias that steals from the publishers.
So what does this show?
More visitors = more impressions = more clicks on ads = incrementally less revenue.
Hypothetically/figuratively:
before 5000 imp 1000 clicks $1000 revenue (average)
during test 10000 imp 2000 clicks $1200 revenue
after 5000 imp 1000 clicks $1050 revenue (average)
So what does this show?
When you combine two identical sites you will get more repeated clicks due to the same visitors visting both sites. Repeated clicks will be counted as clicks but no revenue.
Did I answer your question.
Each site was turned off except to pass traffic,
Yer not making sense dude. It sounds like you are recycling visitors, so your total visitors shouldn't increase .. and therefore your revenue should not increase.
I think he forwarded the url from one domain to the other.
paybacksa,
How long did you forward the url for? There are many posts that talk about how revenue fluctuates as much as 35-40% from one day to the next with the same impressions and ctr.
Too many AdWords publishers fail to:
a) use Google's conversion tracking scheme
b) use a landing page that encourages conversion
This practice should bear close scrutiny from entities such as the FTC and SEC.
before 5000 imp 1000 clicks $1000 revenue (average)
during test 10000 imp 2000 clicks $1200 revenue
after 5000 imp 1000 clicks $1050 revenue (average)
Jomaxx, did you mean no correlation in this example, or did you mean on your own site? In this one example, CPC is negatively correlated with total clicks.
Frankly there are so many variables that have to be accounted for that I probably wouldn't accept any such test as proof unless I designed the test and analyzed raw the numbers myself. But I just don't see the point in it. Google's algorithm is a black box, and you can either stay in the program if the numbers are good enough, or quit the program if you can find something better to replace it.
While it's understood that EPC varies with time, I expected either zero correlation or a small but slightly positive correlation between total Adsense clicks and EPC for any given site, all else constant. Call it the default hypothesis (H0). It is pretty much taken for granted.
Now, suppose I want to invest money to increase traffic. Also, suppose Adsense is the main revenue generator on the site.
If H0 were true, then I could increase my marketing budget to generate incrementally more traffic for the site without fear of decreasing ROI.
If the alternate hypothesis were true (it is possible that there is a negative correlation between total Adsense clicks and EPC), then I would consider NOT increasing my marketing budget for this site -- or at least do so conservatively.
I was surprised by paybacksa's report, but it suggests the possibility of a negative correlation under certain (unknown) circumstances. Of course it does not prove it.
It's about visitors and conversions. Getting 100 visitors to click 10,000 times versus 100 times should not necessarily change your revenue.
With this channel, I can see my results roughly coinciding w/ Paybacksa's test. Over the last month or so, I have been able to triple unique visitor traffic to this channel. Impressions are up ~3x, clicks are up ~3x, CTR has remained pretty constant. Revenues are up about 12% since the beginning of the month, despite the ~3x increase in unique traffic and clicks.
I have seen this anecdotally on other channels as well, and am now watching it more carefully to see if the pattern continues.
[edited by: Powdork at 8:10 am (utc) on June 13, 2004]
But why bother when you have such accomodating WebmasterWorlders... ;)
There are well known generic experimental designs used by researchers and academics, and guess what.... In most controlled experiments, some form of bias is present.
Paybacksa's method reduced some biases by alternating the experimental treatment between the two websites. It would have been more convincing if instead of "switching off" one of the sites, one could have one site run with its normal amount of traffic as a control. (Perhaps a third website would have been useful here).
- Maybe the traffic from the two sites isn't identical, and people who get funneled from one site don't tend to click on the other site's most expensive ads. Frankly I'm surprised two sites could be so interchangeable that you could seamlessly redirect traffic from one to another without consequences.
- Maybe the matching algorithm somehow tends to show broader, or at least different, ads as the number of impressions goes up. I doubt one site is blowing any advertiser's entire budget, but maybe AdSense portions out clicks so that not too much of an advertiser's content traffic comes from a single site.
- Maybe when there is a sudden spike in traffic, the extra clicks are charged to advertisers at the lower rate. Then if traffic stays at a high level and the "quality" of the higher level of traffic is established, rates would go up.
CPA, bah. Google makes a mockery of conversion as a reason to reduce publisher's revenues.
Too many AdWords publishers fail to:a) use Google's conversion tracking scheme
b) use a landing page that encourages conversion
I agree on (a) and I've written about this since the first days I joined Adsense as a publisher.
"Smart pricing" can't be very smart without some measure of effectiveness in place at the advertiser's pages.
Currently, in absense of conversion data, Google's "smart pricing" seems to give the benefit of the doubt to the advertiser.
So, looking at my logs, a visitor from United Arab Emirates on a page about oil refinery, clicks on an ad of Shell on improving refinery plant performace and on another ad on oil pipe hangers and supports. And those clicks earn a few cents.
I think that for advertisers who don't use conversion tracking, the benefit of the doubt should be given to publishers.
