High clicks lower earnings finally explained

[Hobbs]

In a recent post in the AdSense blog [adsense.blogspot.com], Google finally is debunking the myth that SmartPricing is the cause of lower or same earnings when a publisher get more clicks (higher CTR)

According to the post, some ads typically attract higher rates of clicks, those ads are most likely generating lower earnings per clicks (EPC), also other ads that attract less clicks (lower CTR) typically make a higher earnings per click than the ones that get less clicks..

Finally Google came out and said that they're "always working hard to maximize revenue for our publishers"

[edited by: martinibuster at 4:40 am (utc) on Sep. 26, 2006]
[edit reason] Added URL. [/edit]

[bobothecat]

"always working hard to maximize revenue for our publishers"

... and themselves naturally :)

[Hobbs]

naturally for themselves too, but the fresh part is their statement in favor of publishers, previously most positive PR statement were primarily targeting Advertisers..

As for the high CTR same earnings, this is a repeated question here in WebMasterWorld, I would extrapolate their statement to cover increase in traffic with no increase in earnings questions too.

You see, with a fixed amount of advertisers, the allotted advertiser ad impressions get diluted with the increase in traffic, so sudden burst are likely to be compensated for by lower paying ads, hence the no proportional increase in earnings.

Good to have SmartPricing excluded from this formula.

[loganz]

i guess that does make sense. whenever i get high click / low cpc, its usually just the normal ads. when i get less clicks / high cpc, its usually ads i never seen before, or ads that take up the whole ad block.

thanks google for clearing that up

[humblebeginnings]

always working hard to maximize revenue for our publishers

So that's why my earnings have dropped over 50% this month.
It all makes sense to me now...

[Hobbs]

Sorry to hear it HB, 50% is a lot!
I take it you did all the checks, MFA, low earning channels, checked for CPM, checked for consistency in advertisers compared to previous months, looked at advertisers on competing sites ...
Or just save your time and let it run for a while and see it grow back to normal levels.

[david_uk]

I'm not exactly sure what they think they have explained. Are they admitting that the crummy ads they show don't pay well, and we'd all do better if they showed the real ads?

I believe they wittered on about ecpm for a while. The problem I have with ecpm is that it can often be perfectly meaningless. In another thread I reported an ecpm today on one of my channels in excess of $1000. It's a completely meaningless figure from one click, and not representative of any value the website has to an advertiser in any way, shape or form!

Sorry - not convinced by this explanation.

[edited by: david_uk at 9:55 pm (utc) on Sep. 25, 2006]

[WallyWorld]

G's explanation my answer the question of lower EPC when CTR is higher but doesn't address the issue of a stable CTR with higher page views (traffic)and lower EPC and overall earnings.

[Hobbs]

>what they think they have explained

I think the news here David is that SmartPricing has nothing to do with CTR (and probably traffic) surges earnings behavior.

[Content_ed]

I think the news here David is that SmartPricing has nothing to do with CTR

I'm not convinced. We still only run Adsense on a fraction of our page views because every time we have added Adsense ads (couldn't resist) to some of the busy sections of our sites, overall earnings have dropped after a week or so. If SmartPricing was only affecting what advertisers paid, why would the ad quality on the stable of stable earning pages drop, along with CTR?

Now don't make me go back and check if that's really true or I'll go wonky and lose my job:-)

[ken_b]

The explanation makes sense to me. But it won't satisfy everyone, as we already see in this thread.

[andrewshim]

"always working hard to maximize revenue for our publishers"

Believe it or not, I do think so too... except they probably left out the part about double-maximizing their profit first before ours.

But hey, if YOU owned Google, wouldn't you think about YOUR pocket first?

[JinxBoy]

I'd be more concerned about my Aston Martin, quite frankly.

[greedy player]

Smart pricing in my experience has reduced income by 80-95%.

Reason:
more traffic + clicks = great money for 12 days or so. then smartprice uses these stats and kills the moment forever.

Smartpricing needs to be canned!

[sandyweb]

i got 98% down in earnings due to smartpricing and i removed g ads completely. what google writes in its recent post in inside adsence is totally weird. in my case local advertisers are spoiling my site with unrelated cheap ads (ads that spreadout) and i am earning cents. i still got the same or more traffic but my revenue went rock bottom. i think g doesnt care about publishers. i am going to try other advertising. i am just fed up.

[Green_Grass]

There seems to be an 'optimum' traffic level which can attract High Earning Clicks. I guess the trick is to find that optimum level and maintain it. A new challenge for SEO maybe? AdSense is not ideal for huge traffic, limited advertiser niche? Gotta think this over.

I guess if traffic explodes, MFA 's pay better? for Google and for us. After all, they are the ones that have a higher CTR but pay much less per click.

or have I got it all wrong.....or is this why G needs MFA's....

[david_uk]

I'm not saying it doesn't make sense, but it sounds more like some lightweight fobbing off.

My problem with the explanation is that whilst I can see what they are saying, smartpricing is a LOT more complex than implied. I've experienced spikes in traffic due to higher ctr, higher traffic due to search engine changes, and higher clicks/ctr due to chenges I've made.

On each occasion I've had a sharp spike, epc has always been reduced very quickly. I suspect a major part of the smart pricing algo is to maximise Google's profit by limiting payouts to webmasters for no other reason than they can see somebody being profitable and an opportunity to rake in additional bucks for themselves. We know that the discount offered to advertisers is minimal compared to how it hits us.

So whilst there may be something in the published article, I rather suspect that's the cosy vision Google would like to have of the algo, rather than the reality. I think part of the reality is that it's been patched so many times and twiddled with so many times now that Google themselves don't really know how it is going to react given any set of circumstances.

I'm currently running adsense on a couple of trial pages only having removed the code from my site. Interestingly, looking at the graphs as ctr has risen, epc has declined. This pattern has always been visible, but no more so than now, as I have just a very limited number of pages.