Forum Moderators: martinibuster
If I modify my page and the CTR goes up to 10%, that's 1000 clicks instead of 500. If that slashes my conversion rate in half to 0.5%, that's still 5 sales for the advertiser.
If smart pricing is bringing my earnings down because my CTR went up and brought my conversion rate down, why is it that people are seeing their earnings drop BELOW what they were before? Shouldn't the earnings just get cut in half to bring the EPC to $0.05 instead of $0.10 and equalize the conversions?
This makes me believe that there is much more than just conversion rates involved in how much a publisher gets paid per click.
<edit>This has not happened to me--ever--but I read it a lot here. I personally don't think rising CTR has nearly as much to do with the EPC as people here think it does.</edit>
I personally don't think rising CTR has nearly as much to do with the EPC as people here think it does.
One of my sites pays a lot more per click than my other sites. Early this year I worked on improving the CTR on that site and after it started working, EPC actually went up with the higher CTR. That's just one site and less than 100 clicks per day, so take it with a big grain of salt. But it's one example of what you're talking about. I've not seen a correlation, even though many others here swear by it.
One theory of mine is this: let's say you have a skyscraper on the right side of the page at first. That's not even close to the place to put the ads for a high CTR. If somebody who is really interested in the product lands on the page and reads a review, he might look around the page to find out if there's anywhere he can go to get to the product itself. Only people searching for the ads will be clicking on them.
Then you change the ad location and format for a much greater CTR. Now you'll just be getting clicks out of passing interest. Lots more clicks, sure, but a lot fewer people who are ready to buy. Conversion rate for the advertiser drops, your EPC drops. Pretty simple.
That probably happens in a lot of the cases where people are saying that their CTR going up drove EPC down. But in the case of people who have a lot of ready-to-buy traffic, CTR increasing only drove earnings up, not down.
Adsense Revenue = Declining
Google Retainer (PCT) = Climbing
Adsense Revenue = DecliningGoogle Retainer (PCT) = Climbing
Unfortunately for your theory, AdSense revenue is increasing, according to Google's filings with the SEC. Or do you think that Google is filing fraudulent data with the SEC?
Secondly, if Google were increasing their profits by taking out a bigger share, why isn't everyone seeing a decline in EPC? Mine has stayed more or less stable in the two years that I've been in the program, and actually is up a good bit from Sept. '04 (graph my EPC and you get a shallow valley).
The problem is that the workings of AdSense are very complicated, involving multiple factors working in complex ways. We don't understand how it works. And frankly, we wouldn't understand it even if they revealed the algorithm--the math would be beyond most people here, and I'm certainly including myself in that.
Due to that complexity, it's easy to latch onto the ONE reason that something's happening, be it Google greed, the malfunctioning of Smart Pricing, or whatever your favorite explanation is. I don't think that helps. I try to avoid reaching simple conclusions, and instead I try out different things and see what works. Same with this. If increasing your CTR doesn't work for you, try something else.
