Forum Moderators: martinibuster
Thanks,
Tami
search the forum theres plenty of info on it
in a nutshell, its when you've been making a good amount, just when you thought its all good "smart pricing" kicks in and you get upset.
even shorter version, more traffic = lower eCPM and lower earnings, the more traffic bit is usually when "smart pricing" kicks in
[adwords.google.com...]
In a nutshell:
- When an advertiser bids on a keyword, the full bid is charged for clicks from Google's SERPs.
- Bids from the "content network" (AdSense, gmail, etc.) are discounted. The discount varies according to how likely Google thinks a click will convert to a sale or other advertiser-defined "business action."
- The purpose of smart pricing is to ensure that clicks aren't overpriced (and that advertisers don't abandon the content network because of a poor return on investment).
- Some publishers (but not all) are unhappy with smart pricing because their clicks are heavily discounted and they don't feel they're earning enough money.
- Some of us believe that smart pricing is probably a good thing because it makes the content network (including AdSense) more attractive to advertisers who otherwise would limit their ads to AdWords for search.
I'm one of the publishers that agrees with the general principle of smartpricing. I can see it's necessary to enable advertisers to participate in the content area.
Although I support the principle, I have reservations about the implementation.
Firstly, it's unstable. Make any changes to your website, and it knocks it's value of your site badly. EG I recently moved the banner and the ctr changed moderately. Smartpricing immediately kicked in and the cpc dropped dramatically. Moved the banner back, and the ctr came back. Smartpricing knocked me AGAIN! Emailed Google whining, and got a response back saying that smartpricing couldn't possibly be faulty. cpc immediately returned to normal just after they sent the email. It's not the first time this has happened, and on other previous occasions it's returned to normal just after a whiney email. Hmm......
The difficulty here is that I'm now afraid to make any changes to the page that accounts for 80% of my Google earnings for fear of an unstable algorythm penalising me for it.
Secondly, how can advertisters or publishers trust it? The target bot removes well paying ads and replaces them with scrapers on the grounds that the ads they target get a good ctr elsewhere on the network. They don't look at historical data on what ads have worked well on your site before they remove them. This is a major problem with the target bot that Google have failed to deal with. The only way round it is to block MFA sites yourself as and when they appear. Who is to say that the smartpricing algo works any better than the targetting one does? The reality of it is that it probably doesn't work any better.
It's not the fact that publishers earn less money that's the problem. It's the feeling that they earn less money because of an algorythm that is pre-beta -1 version technically, but has been rolled out across the content network anyway.
Smartpricing is rightly here to stay (IMHO). Hopefully in the future it will become more stable, might actually work and hopefully advertisers and publishers will then start to have some faith in the thing.
I'm one of the publishers that agrees with the general principle of smartpricing.
Add me to this list as well and I agree with your reservations about the implementation.
The problem that many publishers don't understand is that their sites couldn't compete for top bids against their competitors in the market in the first place. Some of them would be lucky to get $1 CPM let alone $0.25 CPC so they're probably doing much better with AdSense than they would on their own.
However, with that said, there are probably some medium-large publishers that don't qualify as a premium publisher that are getting kicked in the ass by smart pricing (based on discussions in this forum) that would do better selling directly.
I recently moved the banner and the ctr changed moderately. Smartpricing immediately kicked in and the cpc dropped dramatically. Moved the banner back, and the ctr came back. Smartpricing knocked me AGAIN! Emailed Google whining, and got a response back saying that smartpricing couldn't possibly be faulty.
Is it possible that moving the ads changed how well the ads were targeted?
The difficulty here is that I'm now afraid to make any changes to the page that accounts for 80% of my Google earnings for fear of an unstable algorythm penalising me for it.
This isn't directly related to smart pricing, but it seems to me that having one page responsible for 80% of your AdSense earnings is a high-risk strategy. What happens if the page loses traffic, or if Google updates the Mediapartnerbot in a way that screws up ad targeting on that particular page?
Secondly, how can advertisters or publishers trust it? .... Who is to say that the smartpricing algo works any better than the targetting one does? The reality of it is that it probably doesn't work any better.
Ultimately, what matters is whether you're earning enough money from the ad space that you've set aside for AdSense, a banner network, affiliate links, or whatever. So the real issue isn't how well smart pricing works, but how well AdSense works as a source of revenue.
My complaint is that Google bases smart pricing on conversion data as well as onsite factors (and little bit of eye-of-newt I'm sure!), which is great in theory, but the collection of this data is faulty. Many advertisers in my field don't track conversions (advertisers that I know anyway). Some aren't even selling anything right now as they just want site exposure. And in the end, it is the advertisers who know what a click is worth. Google is just second guessing. Even if Google knows that one site converts better than another it still doesn't know the worth of the click.
Say I have ads running on two sites. For every 10 cents of advertising on site A, I get enough conversions for 30 cents worth of profit, but on site B I only get enough conversions for 20 cents worth of profit. Should site B be discounted?
Worth can also come in the form of longterm gains through exposure that is not immediately monetized. I may try advertising at an immediate loss for the hope of gains spread out over time.
However, since the introduction of site targeted ads, I think smart pricing has the potential to work better than it has in the past. When advertisers begin selectively chosing sites, they are signalling that this site is worth more than the others. To me that is one of the strongest signals an advertiser can send (ranking even higher than conversion data). It is no longer the take-it-all-or-leave-it-all bid of the content based network.
So I have my doubts about smart pricing, but I am for anything that will maintain the stability of the system.
Is it possible that moving the ads changed how well the ads were targeted?
I agree that it could be a possibility. I'd say that although it most certainly could affect targetting, in actual fact the targetting was unaffected. The same bunch of regular advertisers - just paying less per click.
it seems to me that having one page responsible for 80% of your AdSense earnings is a high-risk strategy. What happens if the page loses traffic, or if Google updates the Mediapartnerbot in a way that screws up ad targeting on that particular page?
It's not a strategy - just the way adsense seems to work on my site. I have banners spaced out throughout the site, and they work reasonably well. However, for some reason one banner on one page does spectacularly well. I've been trying for a long time to replicate the same success elsewhere, and the other banners don't come close whatever I do.
Ultimately, what matters is whether you're earning enough money from the ad space that you've set aside for AdSense, a banner network, affiliate links, or whatever.
Yes, I would say that Adsense works well on my site. I'm not complaining about that.
So the real issue isn't how well smart pricing works, but how well AdSense works as a source of revenue.
I don't think you can mix up the arguments about smartpricing and income in this way. It's brushing under the carpet the fact that smartpricing at present doesn't work very well.
Many people here (including me) are satisfied with adsense in many ways. Many of us also get extremely frustrated with Google's habit of rolling out changes to the system that are largely untested and to be honest don't work very well. Smartpricing is such an example. Both advertisers and publishers need *some* stability in order to work out how any changes we make to our sites affect our earnings, but it seems unlikely this will ever happen.
I absolutely agree that it's necessary to have smartpricing and other changes in order to get more advertisers into the content area. I've been hit by smartpricing like everybody else has, but I consider it necessary in order to maintain and grow the income from Adsense in the long term. I've done a lot of work on my site, and spent a lot of time looking into how adsense can work best for me, and my income levels are nearly up to the days just before smartpricing was introduced.
I'm not saying smartpricing is a bad idea - only that the implementation is not as good as Google would like to think it is for both advertisers and publishers. Let's not kid oureslves that it is.
Many of us also get extremely frustrated with Google's habit of rolling out changes to the system that are largely untested and to be honest don't work very well. Smartpricing is such an example.
I'm not defending the inner workings or accuracy of smart pricing (since I don't have any supporting data), but I will point out that smart pricing isn't new. Google introduced it a year and a half ago--in April of 2004--so it certainly has had plenty of time to test smart pricing in a real-world environment.
If we had to the tools to make it all worth more to the advertiser it would be a win-win-win for publisher, advertiser AND Google.
As it is, we're in a black hole speculating with little tidbits thrown at us here and there but never enough to actually let us control our own destiny with AdSense.
If Google truly wanted to improve the content network, and their bottom line as well, it seems that it would be appropriate at some level to let us know how much we COULD'VE made before smart pricing. Give us some hints about what things on our site make it worth less, what could we improve to improve the advertiser ROI.
I don't think Google wants to get into the business of dictating or even suggesting content, which is what you seem to be suggesting.
Respect others opinions on this but my theory is as good as any:):)
Smart pricing is nothing more than a discounting scheme by google to attract advertisers to the non search adwords portion of their program.
Exactly. And it seems to have worked. :-)
I don't think Google wants to get into the business of dictating or even suggesting content, which is what you seem to be suggesting.
That's not what I'm suggesting at all.
Suggesting higher paying alternatives isn't dictating content at all, it's putting your OPTIONS in black and white, whether you change course or not is up to you.
I'm suggesting they disclose criteria for smart pricing and if that criteria were known people COULD (dont have to) adapt accordingly to upgrade their lot which would be a win-win if they did.
If they didn't, it's the status quo.
When advertisers begin selectively chosing sites, they are signalling that this site is worth more than the others. To me that is one of the strongest signals an advertiser can send (ranking even higher than conversion data). It is no longer the take-it-all-or-leave-it-all bid of the content based network.
I'm not sure that this isn't happening. I can't state that it is (nor will Google), but I'd like to believe it is!
I always see three particular advertisers on my site. My niche is a tight one, and my site is in the top 3 for my main keyword search on Google. That search doesn't always show up these advertisers. The advertisers in question are absolutely on topic for the site, and I can see that it would logically make a good place for them to advertise.
Yes, it could be that Google's targetting is working. But we do know that an advertiser wanting to sell green widgets with stripes on is not necessarily going to get placed on the #1 information site for green widgets with stripes on. The target bot takes into consideration data from ctr elsewhere on the network and NOT historical data of how ads perform on YOUR site, and will often place a scraper instead of a genuine advertiser that is bidding more! Therefore I suspect that as these ads seem immovable there is some site targetting going on.
To get back to the original point, I'd like to believe that my current high cpc (and earnings) are as a result of the site targetting.
I know I can't prove any of this, but given the usual behaviour of the target bot, and the smartpricing algo's behaviour it is entirely plausible!
