Show Me the Money

Smartpricing Effects

[ElvisFan]

Do we ever know if we are being "smartpriced"?

I'm having the worsed July ever... despite the fact that my traffic is at an all time high. My eCPM and CTR on par this time last year... yet the bottom line is down by half

Any cure for this ailment or not?

[purplecape]

I don't understand how your eCPM could be holding up, with traffic up, and yet earnings are down. eCPM is how much you earn per thousand impressions. If it's holding steady, more traffic should equal more earnings.

But if your earnings are down, then I assume your average click is earning you less than it used to be, yes? That could be smart-pricing, it could be the economy, it could be changes in what advertisers in your niche are doing.

[incrediBILL]

Do we ever know if we are being "smartpriced"?

If you're running AdSense, yes, you're being "smartpriced".

The issue is how smart (as in low) has your pricing gone.

The only cure I've found in this economy is look for other ways to monetize your site.

[purplecape]

If you're running AdSense, yes, you're being "smartpriced".

Well said. Yes, the real question is: "To what degree am I being smartpriced?" and the answer is, there's no way to tell for certain.

[incrediBILL]

there's no way to tell for certain

Sure there is.

Set up an ad campaign in AdWords that uses a term that will show up in your site and then using a proxy IP address, not your own, click on your own ad and then cancel the ad campaign.

Now wait and see how much you were charged for that click in AdWords :)

It's a lot of work just for a clue and still doesn't give you all the answers you need because different keywords driving traffic to your site, even to the same page, will pay different prices.

Too many variables to figure out, but you can get a basic idea.

[purplecape]

Bill, sorry, but I don't get it. Whatever you earn from that click will be 70% of what you as advertiser paid for it. According to Google, they pass on 70% of what they charge the advertiser. What does that tell you about smartpricing?

Are you thinking it will tell you how much less than your max. bid you had to pay? But that could be for other reasons.

Or am I thinking along the wrong lines? Please explain in more detail. For example, how would that method enable you to distinguish between a site that was being smartpriced at 50% and another that was being smartpriced at 90%?

[incrediBILL]

Are you thinking it will tell you how much less than your max. bid you had to pay?

Exactly.

I've run AdWords campaigns before on the AdSense network and a $0.25 bid may only cost me $0.05 on some sites, so you know you're being smart priced to the extreme when a click is only worth $0.05 on your site.

[Jane_Doe]

I'm having the worsed July ever... despite the fact that my traffic is at an all time high.

Sometimes higher traffic levels can bring in less focused users. I know it sounds counter-intuitive, but sometimes with Adsense it is best to let rankings slide on very generic one or two word terms that may be bringing in lots of tire kickers but not actual customers for your advertisers.

With affiliate programs and banner ads more traffic is usually better and seldom hurts, but Adsense works a bit different.

[wyweb]

Sometimes higher traffic levels can bring in less focused users.

Yes it can. And this is exactly what I've seen with spikes in traffic to my network over the last several years.

I think there's also a "what's up with this" algo that factors into this. Increases in traffic, especially when they're sudden, raising red flags.

[purplecape]

Bill, thanks, that makes sense--you have to compare to other sites...

[true_INFP]

I've run AdWords campaigns before on the AdSense network and a $0.25 bid may only cost me $0.05 on some sites, so you know you're being smart priced to the extreme when a click is only worth $0.05 on your site.

That could have been caused by different levels of competition on the sites. Your maximum bid is reached only if there are other advertisers in the auction outbidding you for the ad unit spot.

I don't see any way to conclude with your level of certainty that one of the sites was being Smart Priced.

[netmeg]

I've always thought every click was "smartpriced" to some degree, even if it's at the highest possible payout. As much as anyone is ever going to be able to understand smartpricing, I understand it to be the process by which Google decides what to pay (and what to charge advertisers) for a click.

Are we assuming that all clicks are smartpriced at the same rate? Don't you suppose there could be degrees?

And what do you do with the information once you have it? You don't really know *why* it occurs. As long as your bottom line is okay, you just keep running AdSense, and if your bottom line isn't okay,you have to make some decisions, but the smartpricing doesn't really give you anything to work with.

Using AdWords info is also somewhat problematic; there are all kinds of things at the advertiser level as well - quality score, competition, ad rank, match type.

I dunno. Still a black box to me. I think you have to stick to the bottom line,otherwise you'll drive yourself crazy.

[Edge]

If you're running AdSense, yes, you're being "smartpriced".

With all due respect, nobody really knows if, when, or how they have been smart priced.

[jimbeetle]

Are we assuming that all clicks are smartpriced at the same rate? Don't you suppose there could be degrees?

As far as I've always understood it (that is before folks on this board started to use it only the negative sense) sites that perform well -- convert -- get paid more than sites that don't. Whether that's starting at some sort of baseline and some sites are on the plus side and some on the minus, well, who knows.

I assume that with all the data Google has on each factor (advertiser, the individual ad, the publisher, the user, the time of day, sunspot activity), it can probably come up with a basketfull of indicators to set a price.

And us mere mortals will never figure it out.

I think you have to stick to the bottom line

Yep, just bank the money and say thank you.

[ElvisFan]

Thanks for your educated imput... however, after some extensive investigation I found that some of my pages are being served Public Service ads... this has not been the case in the past...

As mine is niche site with several pages that include keywords such as death, funeral and autopsy... which are the most hit pages... and no avoiding these keywords... I am at the mercy of powers that be at adsense...

I have tweaked some pages... and changed the ad spot to the "heat map" position... fingers crossed... this will impove my bottom line...

[netmeg]

If you have stop words on your page, I doubt any amount of tweaking is going to help.