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From the Inside AdSense:
Tip 2: Don't believe the myth about blocking 'low-paying advertisers'
Our auction system automatically selects the best performing ads for each page to help you earn the most possible money. This is especially true with our new expanded text ads. By filtering ads you think are low paying, you could actually be cutting out the most optimized ads and decreasing your revenue potential. Each ad that is filtered is one less bid in the auction, lowering the price for the winning ad on your site. You benefit most when there is a larger pool of advertisers competing for a place on your site. Additionally, when we calculate the auction, we take ad clickthrough rates (CTR) into account - an ad with a $0.25 cost-per-click (CPC) with a 5% CTR is more valuable than an ad with a $1.00 CPC but a 0.1% CTR.
From the AdWords Help "How are ads ranked": [adwords.google.com]
Keyword-targeted ads are ranked on search results and content pages based on their maximum cost-per-click (CPC) and Quality Score. (For the top positions above Google search results, we use the actual CPC.) The Quality Score is determined by the keyword's clickthrough rate (CTR), relevance of ad text, historical keyword performance, and other relevancy factors.
Ad Rank = CPC X Quality Score
Having relevant keywords and ad text, a high CPC, and a strong CTR will result in a higher position for your ad. Because this ranking system rewards well-targeted, relevant ads, you cannot be locked out of the top position as you would be in a ranking system based solely on price.
Do the people who write this stuff live in the real world?
Google *should* be aware that blocking in fact DOES increase income for many of us, hence the official blurb is misleading, and innacurate.
It's interesting that they are admitting that they don't target ads based on bid price - something that has been said in this forum repeatedly. Many people believe that Google targets the highest bidding ads. Google don't seem in too much of a hurry to correct this misunderstanding.
The other point is that the data they use on ad performance is how the ads perform ON THE NETWORK AS A WHOLE and NOT how they perform on your site - a massive difference IMHO.
The difficulty that Google's targetting algorythm causes is that it often removes ads it thinks are low paying, and replaces them with ads it thinks are high paying. These decisions are based on performance on OTHER WEBSITES - not yours! If your website is about bright orange widgets with stripes, then logically ads trying to sell bright orange widgets with stripes would be the obvious choice. However, as they don't perform well elsewhere on the network the chances of you seeing them are lessened - despite the fact that they may perform very well on your site! And if you DO see them, the chances of them being removed and replaced by something irrelevant are high!
Many of us here have highly focussed websites, and many of us here are experienced webmasters that know where our traffic comes from, why they come and what ads might or might not appeal to our visitors.
We know that having ads that are highly irrelevant will not work for either advertisers or us. However, the target bot gets it spectacularly wrong quite often. For example, my website is aimed at middle aged family men, and Goole has been targetting acne cream adverts. Therefore we block wrongly targetted ads.
So what ads do Google replace the good payers that work on YOUR site with? Yup, you guessed it - scrapers mostly.
Scrapers do have a higher CTR than genuine advertisers selling goods and services, therefore they do well in the quality score. However, they are of no use to anyone because they don't pay well. They can't! What they are trying to achieve is siphon traffic off cheaply, and get visitors to click on more expensive ads on their site. Ever noticed that scrapers very often block other scrapers from appearing on their sites? Google's algorythm allows them to do this by placing their higher ctr ads instead of real advertisers selling goods and services.
They did it to me again yesterday. One of my regulars was removed and replaced with a site having an adsense block, an adwords block and another adsense block just to make sure! In addition, it had a big ebay ad offering new and used vasectomy reversals. Content? Scraped. These ads DO NOT pay well - remove them.
What Google aren't saying is what the long term effect of allowing their chosen placements of scrapers does. EPC will slide, and smartpricing will downgrade your site for the good payers too. Therefore, an advertiser that is willing to pay well for a quality lead THAT YOUR SITE IS PROVIDING THEM WITH only pays marginally above minimum.
By keeping scrapers off, my EPC has risen sixfold over the last two months since I have been blocking some of the stupid placements and all made for adsense sites. Bottom line income is up by 30% plus and rising. I'm seeing genuine advertisers, and although they don't have such a high CTR as the scrapers, they pay WAY more, and smartpricing now thinks my site is worth a lot more than it did when it was carrying the scrapers and junk adsense chose to place.
[edited by: Jenstar at 1:23 pm (utc) on Sep. 26, 2005]
I really should start experimenting with this.
If you do decide to do this, be careful to add sites slowly - not all at once. I added a load at once, and smartpricing hit me and sunk my epc even further for a couple of weeks. Smartpricing hates change! Things recovered quite quickly, and have been improving steadily since. It *is* a bit dis-spiriting to see epc take a dive when you have blocked a load of ads that can't possibly pay well. I think adding to the filter slowly is probably going to result in smoothing out smartpricing's behavioral problems.
The other thing to do is to go through the list occasionally and delete sites that have ceased serving ads, or have gone to the wall to keep the list manageable.
Well actually they do. It's just not the only factor, but price is important. I just can't say how important. Is the Quality factor the average of its components, or the addition? Who knows, but if it is close for different ads then it comes down to price.
I believe sites with higher CTR's suffer the most from CPM ads. Low CTR sites may actually do quite well.
Google could not possibly understand how this all works Google search, adwords, adsense, all appear to be doing their own thing, and of course so will the publishers! With 4 entities making simultaneous changes how will anyone know whether an experiment is legitimate or not.
Unfortunately I think Adsense may be detecting the blocking of CPM advertisers and perhaps penalizing the blocker with earnings reductions. Perhaps not, even more CPM ads are sneaking in that I can't even identify. I believe cookies are being used to block CPM ads, perhaps after one showing, and if cookies are disabled CPM ads are also not displayed, making it hard to see the CPM ads. But you can see ECPM with no clicks in your Adsense reports.
The other point is that the data they use on ad performance is how the ads perform ON THE NETWORK AS A WHOLE and NOT how they perform on your site
worth to emphasize this statement. this is exactly what also bothers me.
look at how google names the removal tool alone: "competitive ad filter".
the ads i filter out have usually nothing to do with competition. moreover they are mostly senseless irrelevant ads that can't really pay a lot.
seems like google wants to keep us from doing our own experiments.
not only the performance measurement on network basis and the ad selection on keyword basis is inadequate.
there is also no quality measurement of how does a site appeal to a user. when i offer high quality products or content, i don't want the cheap ads. i want customized ads.
G have created a very fluid marketplace and I would guess that they want as little 'inertia', 'friction', imbalance' - call it what you will - as possible so that the whole shebang is as automated and 'pure' as possible with 'bad' sites automatically falling out of the running and sites that perform well rising to the top.
If crappy ads pay a lot to initially get high in the rankings then their poor performance should automatically wipe them out, without people having to filter them.
I don't agree with G (if this is the case) as I think algos can only go so far - especially when you have thousands of people trying to game them all the time. But I can kind of see why they might toe this line.
Perhaps because I don't see scraper or ebay ads or the like showing up on my site, I've never found that using the block list has helped earnings. It has only hurt them (and I've experimented with this several times.)
I think it's possible your experience is valid for those like you, who work carefully on developing the block list, and put some time into it. And that the Google advice is actually valid for many, if not most sites.
My site is about male widgets with orange stripes, and blocking ads for female widgets with orange stripes pushed it too far, and income started dropping again. So you can focus the ads too tightly. There is a balance somewhere along the line.
My technique now is to only block ebay, made for adsense sites, and totally mistargetted ads. If I can see *some* relevance between the site topic and advertisers, they stay. I wouldn't normally see their ads appearing that often in any case. That's the balance I find works best.
How's about this for a hypothesis/proposition.
A little assumption mixed in here also I'm afraid.
For ebay ads, badly targetted, irrelevant ads etc lets say that the advertiser is either getting something wrong or they are just plain playing burn and churn - get their ads on as many sites as possible - some will click - the ads will eventually burn out and they move onto the next idea...
Their ads roll out accross the network - how does G measure how productive they are - by displaying them on websites and measuring the performance.
i.e. in order to measure their performance then they must be displaying and performing poorly.
In order to perform poorly they must take up space on some poor publisher's adblock and maybe give the odd click, but very possibly lowering the eCPM of that ad block by preventing more productive ads from showing.
That is until G has enough statistical data to penalise the non-performing ad.
However, you (or I) are able to short the system because we don't necessarily need the statitical data to tell us that the ad is rubbish.
Basically we are making sure that the non-performing ads will non-perform on other people's sites rather than our own - people who never check their ads or don't use the filter etc.
It would not surprise me if G don't bring in some kind of counter-measure to this (or maybe they already have).
a) we limit the presence of these ads, therefore longer time to get valid data for google.
b) because these ads are then not seen on the whole network, they become temporarily more interesting for users to click.
maybe therefore google doesn't exactly welcome publisher intervention in this process.
As those testing YPN have seen, relevancy of the ads makes a huge difference in CTR. By any contextual program taking CTR data into account will result in better targeted ads that will make publishers more money.
Having an ad that pays $50 a click is useless if no one ever clicks on it... And that is why eCPM is more important than EPC.
Cost per 1000 impressions. From a publisher's perspective, CPM is a useful way to compare revenue across different channels and advertising programs. It is calculated by dividing total earnings by the number of impressions in thousands. For example, if a publisher earned $180 from 45,000 impressions, the CPM would equal $180/45, or $4.00.
I think somebody is a little over confidant in the AdSense delivery algo
The main thread is about blocking "low paying ads". Everyone will see irrelevant ads or ads that while targeted to the topic are just not suited to the site's audience, something which the AdSense bot would have a harder time determining. Or want to block ads because they don't agree with a specific ad or advertiser. That use of the filter is completely different than the use that AdSense is saying should be avoided.
The Inside AdSense blog entry was referring specifically to the use of filtering ads because they are low paying.
But I can't count the number of times publishers have told me about blocking all their "low paying" advertisers. It would be extremely difficult to know what ads are low paying, and to know that the same advertiser isn't also targeting higher earning ads to your site as well. Many people find that when they remove URLs from the filter list that they have filtered specifically for being "low paying" that the ad revenue goes up or back up, since revenue can often drop when publishers do a mass "low paying ad filter run".
I wrote this last year - kind of a more in-depth look at why filtering "low paying advertisers" doesn't really work. Also has quite a few publishers here who tested it out by removing those they have filtered, with good results.
I've tried adsense arbitrage as an experiement and it doesn't work well.
I know those who do extremely well with this - and not all are simply paying the lowest price possible. It does require careful watching in the beginning and the right market area. So while it may be beneficial for some to filter them, don't assume that all pay the minimum amount.
Also to think of, it could be the publisher account that has been greatly impacted via smart pricing for problems with supposed low paying ads. If smart priced heavily, all ads will seem to fall in the low paying category. So identical ads on two publisher accounts could result in one publisher earning several times the amount of the other, due to smart pricing.
I would imagine google should get 30 cents too, which would make the bid 60 cents-ish. Can a made for adsense site in the same niche afford to pay 60 cents per click and expect to make MORE per click from adsense visitors? Not to mention that they'd need 100% ctr. If it's a lower ctr then they'd need to earn even more than that. That means they'd be making well over 100% of what I make on the same topic just to break even.
I'm just speaking generalities to give you an idea, these aren't exact figures, but close enough. (I'm not up to date on what you can and can't divulge according to TOS)
But after the Adwords changes in mid August I blocked some higher paying (for my site) ads because the CTR on the pages went way down, something like 80%.
The result was that the old group of ads reappeared, and CTR went back up.
The blocked urls led to adsense/affiliate sites. The old group of ads leads diectly to specialty merchant sites.
I'd rather get 5 clicks @ $.10 than 1 click @ $.20.
I don't want the highest eCPM, I want the highest eCPM that is compatable with my longterm goals of continued growth.