Forum Moderators: martinibuster
Adsense, on the other hand, most likely smart-prices by the most granular level with statistically significant data available. So, I imagine they have a base rate for an entire Adsense account, then by domain, then by individual ad placement or page / size. All this would be split by geographical regions as well. So, if you change your ad placements and you see increased clicks and earnings for a few days (or longer / shorter depending on volume) and then see click remain consistent but earnings drop (a PPC drop), you are most likely being smart priced.
First thing to understand is that traffic from different sources (publishers, websites, etc) converts for advertisers at different levels. (Conversion Rate or CVR).
So, to solve this problem, ad network "smart-price" which is a way of leveling out the amount an advertisers pays for clicks of varying quality.
[...]
Why do they do this? Simple. If they didn't smart price traffic sources that covert at a rate less than average, the advertiser would lower their bid to compensate. In the above example, assuming that both publishers had the same volume, the advertiser would lower their bid to $.75 to maintain their eCPA at $20. This would cause publisher A's earning to decrease even through their traffic converts better and publisher A would then be better off going to another ad network that didn't have Publisher B in it, causing lower bids.
So, all traffic is "smart priced" to either the network average or the "best of network". This keeps upward price-pressure in the market and helps the network maintain high ppcs and high converting traffic sources.
