How to get rid of Smart Pricing?

[theresandy]

Hi,
as many people here, I've been hit by smart pricing.
I used to make $100 to $200 a day with adsense, my highest CPC was around $0.08 (good days, eCPM around $0.90).

Nowadays I've been around $40, my CPC is as low as $0.01, my eCPM is $0.30 max.

I tried raising my CTR (I get from 0.8% to 1.2%) and CPC did raise a bit, but not that much, so I'm pretty much stuck.

I was wondering if any publishers ever got rid of Smart Pricing? How?

What comes to my mind is raising my CTR a lot (by reducing ad views on some pages), but would that be enough?

What do you think? Anyone ever tried that? I've seen several people being hit by smart pricing, did they ever get over it?

Thanks

[birdstuff]

This is not a quote from Google, but an opinion.

I don't remember anyone saying it was a quote from Google. The 2nd quote is the quote from Google.

[21_blue]

David_UK wrote:
>I believe that Google DO take conversions on your site into account. Of course we will never know,
>but I can't think why they wouldnt look at conversions on a particular site / page when
>determining pricing.

I want to make a slightly different case: Google don't take conversions into account, but conversion tracking does affect the CPC.

The reason I suggest that Google don't take it into account is that there is nowhere in the Adwords process (that I've seen) where this is even hinted at to the Advertiser. Conversion tracking is pitched simply as a way of the advertiser getting better information to support their keyword-investment decisions. If conversion tracking were to affect pricing, then the advertiser jolly ought to know otherwise they may inadvertently be affecting pricing.

However, I suggest conversion tracking does affect the CPC because, from a systems perspective (and including the advertiser within the overall system) it was designed to: conversion information enables the advertiser to decide which particular keyword combinations result in most conversions, and thereby adjust their pricing and concentrate their spend on the better converting keywords. Advertisers are told to do this in the conversion tracking demo. So conversion tracking affects the CPC, indirectly through advertisers' decisions.

Ostensibly, this is only on a keyword basis and not by specific page. But if you have a generic page about "widgets", you may find you lose out as a result of conversion tracking, because advertisers discover that the best converting keyword combinations are things like "pretty-looking widgets" or "value-for-money widgets" or "widgets compared". They invest their funds in these keywords that are not triggered by your generic page, and you are left with less competition between lower-paying ads - so your income drops through the floor.

On the other hand, if you have a page comparing pretty-looking, value-for-money widgets then you will end up being a conversion-tracking winner. Your page is still relevant to the lower paying ads, but you also have the serious players competing for top slot on fewer pages (of which yours is one) and they are paying higher prices to boot.

[Buzliteyear]

Maybe ASA will chime in with some words of wisdom to guide us?

From my experience, usually when ASA doesn't appear on an important thread like this, it is because he can't.

Google has told us exactly what they want us to know about Smart Pricing. I suspect that they believe that any more information could compromise the integrity of the program and leave it open to manipulation.

ASA is a wealth of information, and this is the only place on the Net where we can information directly from AdSense. With that said, he is probably permitted to participate here with some very strongly spelled out restrictions.

He reads a lot here. If he hasn't appeared, it is because he can't.

Oh, ASA, if you are reading, please remember me for those Christmas Gift Mood light AM/FM radios.

It is spelled B U Z L I T E Y E A R. :)

[europeforvisitors]

There is no mention of conversion tracking in this passage.

Google Search doesn't list the "100 factors" in its ranking algorithm, either.

Fact is, the quoted passage was written a year and a half ago, before "smart pricing" was introduced. We have no idea what Google has done with the conversion-tracking data that it's gathered over the last 18 months (or longer), but common sense would suggest that such data has been analyzed by the engineers who are responsible for developing, monitoring, and refining the "smart pricing" algorithm.

Bottom line: Google isn't telling us exactly how it calculates "smart pricing" discounts, and for good reason.

[roycerus]

Well let's say you are Google and you want to introduce something called "Smart Pricing" - in order to give advertisers discounts on the CPC - what factors would contribute:

I think there are four key players in the smart pricing algo and all of them are taken into consideration in different levels :-

1) The adsense publisher
2) The adwords advertiser
3) Google
4) The user who clicked the ad

1) The adsense publisher

* Overall conversion data available on the adsense account [who's ad was clicked] will also be a factor [we saw in another thred that different accounts can give different earnings for the same website]

* Possibility: Ad placement - the lower the placement - the lower the earnings - it could be that Google has a way to figure where the ads are placed by decyphering the page code.

* Possibility: Domain registered in which country - according to some index which they may have created for each country conversions / web quality.

* Number of times that particullar ad was shown [impressions] / and the click through rate.

2) The adwords advertiser

* If there is any conversion data available about the website - I'll include that as a factor. A better conversion means we can charge the full amount of the CPC bid.

* The clickthrough rate - if it's high and the conversion is not that good - discounted click. On the other hand if the clickthrough rate is low and conversion is good - no discount.

3) Google

* Google's income from the ad is also a factor - where it decides that a discount on a particullar click will propel the ad itself on other websites where it can earn better numbers - it will discount the click. Google wants the adwords client to get better conversions out of the maximum set daily budget - encourages the client to set higher daily budgets.

4) The user who clicked the ad

* User's country [the person who clicked the ad] - compare that with the collective subject/country conversion data from all the websites in the network.

* If back button was clicked to go back to the original website.

I am sure you guys will be able to figure more factors for each key player.

[europeforvisitors]

Great post, roycerus. And very thought-provoking.

[birdstuff]

We have no idea what Google has done with the conversion-tracking data that it's gathered over the last 18 months (or longer), but common sense would suggest that such data has been analyzed by the engineers who are responsible for developing, monitoring, and refining the "smart pricing" algorithm.

It really doesn't matter what Google does with conversion-tracking data - whatever it is it isn't working worth a flip - GIBO.