Forum Moderators: martinibuster
While I am earning more overall, I am earning less per click, and I can only attribute this to "smart pricing", of which we know little.
My supposition is that adwords advertisers report to Google that ads from my site, don't convert well, so the price for those ads goes down. To me, this is not rational. I am driving more custoemrs to sites, yet receiving less per customer for my effort. The fact that people do not buy is NOT my problem, but that of the web site owner (advertiser).
Publishers have no way of knowing which ads are being clicked on, nor do we know whether the people clicking on those ads actually buy anything from the site to which they are sent. But we do see our earnings per click decreasing.
Basically, this creates a tremendous disincentive to create more content. It's like a race to the bottom, in which the race is won by the site that generates the most clicks for the least amount of money.
My situation is simple. while my earnings have doubled in recent weeks because of added pages and good placement of adsense ads, my earnings per click are down by 30-40%.
My suggestion to Google is this: Stop penalizing publishers for creating good content. Keep our EPC steady by scrapping smart pricing (actually, publishers who deliver more clicks should earn MORE per click). Eliminate the scraper sites that proliferate over the internet. And, finally, RAISE YOUR PRICES. Five cents per click is too low in today's environment. 10 cents as a minimum bid is more reasonable. You'll get rid of lowball adwords users and make many publishers happy.
Call me crazy, but I think that I should be able to earn a decent living (at least earn a living, period) if I am devoting 80% of my time to improving and promoting my site. Earning less per unit for increased effort is backwards.
I do hope somebody at Google reads this and takes my advice seriously.
Some % of the users have the Google toolbar. Google can track every movement of this users. So Google knows also without conversion tracking how long this users remain on the site of the advertiser.
If somebody with Google toolbar thinks the ads are a tip jar, Google sees them only very short time on the page of the advertiser and....
.... smart pricing strikes
I am averaging under a dime per click right now.
Smart pricing is really hurting me too. My goals, business plan, future projects and plans have all been affected.
I am in the process of rebuilding some of the affiliate programs I once had and finding more.
Also, I will be replacing some of my AdSense ads with banner ads for direct advertisers.
I wish they would kill the Smart Pricing program.
The idea is to get rid of Adsense alltogether. Its a strategic decision.
The idea is to get rid of Adsense alltogether. Its a strategic decision.
Understood - free money bad :)
Bill (and you are truly incredible, in the good way)- I'm ready to look at other advertising solutions also- do you us AdBrite? Would that fall under the rubric of 'direct advertising'? How to you fill that space, and how have you determined what it's worth?
(Of course, if you can point me to a resource to save yourself time, that would be great too)
Thanks,
B
I was ups club Q1, then took a 30-40% hit with "smart pricing" on EPC across all channels on my site (with a lot of different topics). Traffic on the site has gone up 10% since 1/05 and clicks have gone up 35%, but eCPM and net income have dropped.
When I first started reading about "smart pricing" I thought G might have a rational reason to reduce EPC - I didn't know what the reason was, but maybe it was rational. Since then though, advertisers have been approaching me directly. They love the conversion rates they're seeing, and I'm seeing great results with direct advertising. It turns out there wasn't a good reason to cut EPC on my site - I now see that the traffic converts very well into sales.
Maybe there is a problem with Adwords/Adsense. Advertisers see which publishers are converting for them, then go direct with those publishers. Scraper sites (and a middleman whose name starts with a G and ends $) raise the net cost for the advertisers, so advertisers circumvent the whole system. That puts downward pressure on adsense CPC.
I like Adsense. It's easy and there's a lot of money, but I can't take 40% overnight cuts without warning. I'm reducing my dependence on Adsense and finding other ways to earn the money.
Smart pricing is really hurting me too. My goals, business plan, future projects and plans have all been affected.I am in the process of rebuilding some of the affiliate programs I once had and finding more.
Buzliteyear
This describes exactly what I've been doing.
As EPC continued to decline, more of my new pages are being designed with affiliate program ads instead of AdSense.
Advantages:
Diversification of income. Not as dependent on the future of AdSense.
Past mistakes with affiliate programs have taught me valuable lessons. The EPC for my affiliate programs is increasing.
Ability to use AdSense to find the most successful affiliate programs.
Thanks Google.
You can have your cake and eat it too.
Overall, I can't complain, though I look forward to the day that there is more than one network.
I couldn't agree more. I'm ready to see what Y has in store for us. I would love to see a stated fixed percentage.
Therefore, since January, I am replacing Google Ads on my website with direct advertisers.
Smart pricing has actually increased my income by ecouraging me to transition a couple of my best sites to more profitable advertising methods. Google's loss is my gain.
Is anyone using a PPC model here? I've thought about going direct to advertisers and offering cpc rates lower than they'll find on Y and G. I've proven through adsense that my sites can produce effective results to advertisers in my niche. Why give G a piece of the pie when i can cut out the middle man and save my advertisers money while at the same time increasing my EPC? Its a win - win - lose situation. My advertisers win, i win, G loses.
.
To implement smart pricing, Google in the past only "reduced the cost of a click to the least amount possible to stay above your competitor's ad." The word "your" here refers to the advertiser.
Now, Google has 'improved' smart pricing, which in addition to the automatic lowering of the ad price to just above that of the lower bidder, Google also further decreases the price of *click* on the ad based on a guess on the probability of this click converting or not.
The method Google uses to determine whether or not a click converts, is trying to automatically figure out what type of site the ad appeared on. From its wide data analysis, Google discovers that certin types of sties convert better than others. That's how it guesses about the probability of the click on your page converting or not.
Sure the technology is not perfect, hopefully would imporove with time. Yet my point is to clarify the misconceptions or unclear thoughts about what "smart pricing" means. Smart pricing has always been there, what we are talking about now is what Google terms as "improved smart pricing."
The link to Google again:
[adwords.google.com...]
When I first started reading about "smart pricing" I thought G might have a rational reason to reduce EPC - I didn't know what the reason was, but maybe it was rational. Since then though, advertisers have been approaching me directly. They love the conversion rates they're seeing, and I'm seeing great results with direct advertising. It turns out there wasn't a good reason to cut EPC on my site - I now see that the traffic converts very well into sales.
Exactly. The advertisers know which pages convert (or are likely to), not a Google alorithm.
The method Google uses to determine whether or not a click converts, is trying to automatically figure out what type of site the ad appeared on. From its wide data analysis, Google discovers that certin types of sties convert better than others. That's how it guesses about the probability of the click on your page converting or not.
The problem with this approach is the vast amount of differences between sites (even those in the same "category" or "type") makes it impossible to accurately extrapolate a guess based upon one site's stats (or even 1,000s) onto another "similar" site.
Example: 2 pages on 2 different sites both offer a digital camera review of model XYX-21. The first page provides detailed controlled testing results and in-depth performance stats followed by a realistic opinon of the value of the camera.
The 2nd page simply says "The XYX-21 is a great digital camera. It really fits nice in my hand."
That's all. That's the entire "review". Now how can conversion stats from site 2 accurately reflect the liklihood that an ad on page 1 will convert? It can't. Not even close. And these are actual pages that I have found while browsing the web doing research for a new camera purchase. Combine this reality with the fact that relatively few advertisers use conversion tracking in the first place and you can easily see the problem.
True, these example pages represent the extremes, but the quality of sites varies widely. Google is performing statistical analyses on woefully incomplete data and extrapolating the results to other sites. It simply cannot and does not work and they're losing good publishers and great sites from the network because of it. It might appease the advertisers and shareholders for a time but they'll lose out big in the end.
Exactimundo! Another way to phrase this is: quality publishers getting screwed by someone else's (who shall remain nameless and only identified by the letter G) low standards for inclusion in the content network.
Adwords is built to benefit google, and by extension Adsense publishers. Because G can bring in 1000 bidders, the price goes to the peak the market can bear. I can do well with many advertisers, but I can't get them to the peak because there's me, them and maybe one or two other advertisers competing for my ads. Plus, I don't have huge traffic, so they can always work on another publisher.
Ultimately Adsense helps the publisher because they can leverage a huge number of advertisers and a huge number of publishers to get the best price on ads. It also gives me a bargaining chip - I don't have to accept low advertiser bids because I can always fall back on Adsense.
It's just a problem when they make seemingly arbitrary and unanounced cuts to the payout. I don't mind the seemingly arbitrary and unanounced increases so much.
Thats what ive thought as suggested by others over the last few months and carried on optimistic it would improve but looking back at the years monthly cpm it really does seem abnormal and compared to last march cpm it is way down with a hint of higher cpms in april but still below previous levels. I was on the other side of the fence, convinced the other factors at play were as much or more the cause, but I am getting more and more convinced that smart pricing ( possibly smart pricing abuse )is the cause for the 3 month slump ive seen.
I'm ready to look at other advertising solutions also- do you us AdBrite?
I do use adbrite but not for this purpose.
I have a merchant account that supports automatic recurring billing (so I don't need adbrite for that) and I have arbitrarily allocated 5 sponsorship spots per section (category) with a grand total of 200+ major advertising page locations with 5 spaces to fill per page which gives me easily 1,000+ ad spots. I could have a LOT more ad spots, but I'm starting small and currently have about 20 advertisers.
I basically bill the space based on the page traffic and charge a reasonable rate of $1 CPM so the ad page rates run from $25 to $50 per sponsored link/month based on actual page traffic. Some sites get so much traffic via my sponsored links it's costing them only $0.01 per click or less while others average about $0.05 per click.
One of my sponsored link customers keeps buying my traffic month after month as I'm delivering 99% of all his web traffic, I've seen his web stats, it's real scary. Google, Yahoo and MSN are statistically insignigicant on his log analyzer compared to his share of my 400K visitors.
For a niche market it's one of the better deals around, and I don't share 25% with adbrite and get paid 3 days after the credit card clears instead of 60. I'm pretty sure you can do the same thing with PayPal billing but I don't know how much they take off the top for this service, if it's less than 25% it's a better deal.
I have arbitrarily allocated 5 sponsorship spots per section (category) with a grand total of 200+ major advertising page locations with 5 spaces to fill per page
I think this is an excellent approach and I do something similar, although I've been charging a fixed rate. I like your way of charging CPM, and also letting advertisers see their actual CPC cost.
Are your sponsorship spots a brief link (3 - 4 words), or is it a link with a 15 word description, or something like that? Is doing this allowed in conjunction with Adsense ads on the same page, or on the same site?
I think this is an excellent approach and I do something similar, although I've been charging a fixed rate. I like your way of charging CPM, and also letting advertisers see their actual CPC cost.
I was giving bbcarter the CPM number as an example of how I set the rates.
I don't actually tell customers the CPM rate although they could figure it out without too much trouble based on their performance stats.
I do charge a fixed rate, but it depends on the traffic per page what the rate is sold on a monthly basis so I don't have to deal with "I'd like 10,000 impressions" kind of nonsense from cheapskates. Customers just know some spots are $50, others $35 and some are $25 based on the total impressions per page per month.
2. We receive 15,000 visitors a day, and are top listed in so many queries with a PR of 6, and 128,000 other sites link to us around the web. Our prospective college kids care about student loans -- student loans and student loan consolidation bid is $15-30 on google. But google's "smart" pricing has decided that we are only worth 10cents of that. sometimes 5 cents. usually 7 cents. huh? what? you've got to be kidding me. case and point. Google blows.
wp
They click on it because they are interested! The content of the page (review or otherwise) has almost nothing to do with that.
Sure it does, because the nature of the content often dictates the nature of the audience (and the audience's mindset).
Google blows.
Then why not blow them off?
I figure on adbrite there'll be more free market competition, favorable to me. More work, but...
after you adjust for traffic changes, my adsense income is now 1/15 of what it was just 1 month ago.
whatever made it worth it to open my site to google's ads is no longer worth it.
also, this is an interesting stat- on relatively stable impressions (still only half my actual pageviews), my CTR has been declining steadily- it's now just 1/3 of what it was 3 wks ago- 1/4 of what it was a month ago.
not sure what would explain that on google's end.
but... my Page eCPM is down by half?
wouldn't this be evidence that smart pricing has clicked in if...
Maybe, but as I’ve posted before, there are any number of reasons Adsense earning will vary (both up and down) on a specific site that have nothing to do with Smart Pricing, including, but not limit to, the following:
* Existing Adword advertiser meeting budget for the month and dropping out until next month.
* Existing Adword advertiser adjusting their CPC (up or down).
* Existing Adword advertiser dropping “content” sites from their campaigns.
* Appropriate targeted ad inventory become depleted triggering more PSAs.
* New advertiser joins Adword program.
* Your users profile and demographics change.
* Your website topic is of seasonal interest.
* You add or delete content.
* You change the Adsense ad format, color, etc.
* Your page views increase or decrease due to good/bad promotion, PR, linking, search engine position, etc.
* Google changes the programs payout formula.
* Google changes the targeting algorithm.
* Ad apathy sets in with your site users.
* Adsense ads are rotating, they are not static
It may well be Smart Pricing, but to many poster are quick to blame it for everything.
