Is Smart Pricing killing your AdSense earnings?
August 21, 2006
When Google first started, you basically just earned a certain percentage of whatever the AdWords advertiser was paying per click.
It was pretty simple. If the advertiser paid $1.00 per click and if you as a publisher were earnings 50% of that, you made $0.50. Easy.
Google started to realize, though, that all clicks were not created equal. Clicks from some sites were more valuable than others, at least that's what they figured.
So they came up with an alogorithm, a mathmatical equation for determining how valuable your AdSense account, sites and pages are, and use that equation to determine what percentage
you get per click.
Speculation Galore
Smart Pricing has triggered a HUGE amount of speculation on the part of AdSense publishers. Google is notorious for having very little to say about the way its algorithms work. Their thinking is that the less people know about it, the less chance they are going to be able to cheat the system.
This lack of communication has caused all kinds of speculation about how Smart Pricing works, what it looks for, etc. Nobody knows exactly how it works, but I've got hundreds of
websites, and track everything. I've learned a few things about what Smart Pricing seems to like and what it seems to not like.
What We Know For Sure
The one piece of information that Google has given out about Smart Pricing is that it takes into account how well the visitors from your site who click on the ads convert into customers for the advertiser.
In a perfect system this would be all of the information that Google used. If your clicks converted well, you would be well paid. If they converted badly, you would be paid less per click.
However, AdWords advertisers are not required to reveal their conversion data to Google. Google gives them that ability, but a lot of advertisers do not use it, so Google has to try and "guess" at whether or not your clicks are converting for those advertisers.
What Smart Pricing Seems to Like
Smart pricing definitely loves themed websites. If your websites is devoted to Widgets, and only Widgets, Smart Pricing tends to reward your clicks better. The more narrow your targetting, the better.
However, Smart Pricing does not seem to penalize sites that have a group of related topics. So, for example, if your site is themed around Widgets but has content related to Red Widgets, Blue Widgets, Green Widgets, Building Widgets and Used Widgets, Smart Pricing seems to favor that.
If you have themed topics, it's appears to be best to seperate them into subdomains or subdirectories. So don't put your articles on Red and Green widgets where they can be found like so:
http://www.mywidgets.com/redwidgets.html
http://www.mywidgets.com/greenwidgets.html
Put them like this:
http://www.mywidgets.com/redwidgets/
http://www.mywidgets.com/greenwidgets/
Or better still:
http://redwidgets.mywidgets.com/
http://greenwidgets.mywidgets.com/
In line with theming, having a domain name with your keywords in it also appears to be favored by Smart Pricing. So the "mywidgets.com" example used above is a good one. Having a domain like "www.someunrelatedsite.com" seems to draw penalties from Smart Pricing.
So make your domain name match your theme, and split up your content into related topics in different subdirectories or subdomains.
What Smart Pricing Seems To Hate
The opposite of what Smart Pricing likes, it hates. Having too many topics on the same site really seems to draw penalties.
Having a domain name that has nothing to do with the topic of your site seems to draw penalties.
And, as discussed before, if your site does not convert well, you'll get hit with Smart Pricing penalties. You can avoid a bad conversion rate by only focusing on quality traffic to
your site.
Get traffic from Search Engines and links from sites about topics related to yours. Avoid cheap traffic brokers like the plague! They send lousy traffic (most of which is fake "bot-generated" traffic anyway and won't earn you a dime).
You might be tempted to try it out, but beware: Smart Pricing appears to calculate your "value" once a week or so. That means that if you goof, for the next week you'll get lousy paying clicks. It's best to get it right from the get-go and avoid those mistakes.
Is Smart Pricing Fair To Publishers?
That's an interesting question that I've read debated a lot. Some say that it shouldn't be up to the publisher to convert the traffic, it should be up to the vendor. And if the vendor's site converts badly in general, the publisher will get penalized. Whether that's true or not I don't know–only Google knows.
Other's say Smart Pricing was needed to help advertisers maintain a good ROI (return on investment). They say that "bad" traffic that doesn't convert well should not cost as
much as "good" traffic that does.
Regardless of what anybody thinks about it, or whether it works or not, Google has implemented Smart Pricing. So you've got to know how to work with it to maximize your earnings.
Following the advice outlined above from the start will help you to keep your click values high.
Comments
13 Responses to “Is Smart Pricing killing your AdSense earnings?”
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Jonathan Leger has been earning his living online full-time since the fall of 2004. He regularly posts advice about search engine optimization (his current passion), AdSense and Internet Marketing. 
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Thanks Jonathan, for the tip of providing the people who come my site an opt-in list so that i can tell them when i have a new article. I have quite a few constent site, but i couldn't figure what to do with the names i collected for the different sites.
rudys
My traffic has dropped since last October, but my earnings have increased! and even more so lately, not sure of the dates, but i THINK it was since the recent algorithm change on AdWords that everyone is complaining about.
Good stuff, Jonathan! Thank you for sharing your ideas with us. It's much appreciated.
Is AdSense cognizant acronyms in domain names?
For example, the domain name of my site is eTIP.ca. The TIP part stands for The Insurance Professional, as its content is directed at life insurance brokers.
In short, there's no obvious connection between the domain name and the site content, unless the reader is human. A robot reader wouldn't make the connection at all.
So, can AdSense make the connection between an acronym in a domain name, (such as eTIP.ca), and the site niche, The Insurance Professional?
If not, what should I do to make AS aware of the connection?
I'm looking forward to your thoughts, Jonathan.
Don Pooley
It helps to have your domain name contain the keywords of your subject, but if it doesn't Google will pick up on the subject from the page title and content.
Unless you're using an acronym that would have meaning to an advertiser and they are bidding on the acronym as well as the keywords, in which case it might just help to have the acronym in the domain.
Another great post,acctually i'm suffer that smart pricing thing..
Do you think there are penalties applied because one site in a portfolio is doing poor even though another may be doing well?
From what I've read, Google doesn't want us to create multiple AdSense accounts and so it would seem unfair (not that life is fair) if the performance of all sites was lumped together when it came to smart pricing.
Marios:
It really doesn't seem "fair", but that's what the evidence indicates is happening. Perhaps it has to do with the complexity of calculating SmartPricing on individual domains or pages and storing all of that data. There could be performance implications.
I'm afraid the final answer lies hidden in the Googleplex, and as of now they aren't talking.
Hi Jon, a coupla questions.
1. If you were to have a domain name for each topic, then point all those domain names to the one IP, would that work?
2. You recommend putting them into subdomains or subdirectories like this:
http://www.mywidgets.com/redwidgets/
http://www.mywidgets.com/greenwidgets/
Or better still:
http://redwidgets.mywidgets.com/
http://greenwidgets.mywidgets.com/
Is there any special script or technoque required to do that, expecially the second option?
For example, I have a static IP, http://64.192.220.59/ to which I have pointed my domain, www.better-n-chocolate.com. If I had a section on, shall we say, Belgian chocolate, is it easy for me to have the sub domain (or is that a sub-directory) http://belgianchocolate.better-n-chocolate.com/?
As I am just starting with my Adsense campaign, original content in several categories, I'd like to start out right.
Leslie
Hey Jon,
Thanks for the info - interesting.
I recently have found that my adsense income has done the opposite and increased in one particular niche.
The websites in that particular mininet are all have hand built and added to frequently with articles by me. One of the sites has a PR6 and is in a No.1 spot out of around 26,000,000 on Google.
All I can say is that handbuilt sites seem to work better with adsense, I recently put Amazon on the sites, and have a a bit of income from those sales.
All the sites I have are all on sepearate domain ie no sub-domains and the domain names themselves all relate to the subject, are highly optimized with correct titles etc. I am always amazed by the amount of sites with incorrect titles, it was impressed on me by my tutor in the last century (1996) the importance of .
Anyway eneogh rambling from me…
Cheers
Mike
I was hoping you had some advice on my problem.
Since the change in adsense my sites pay me nothing. I have since changes my sites to unique articles written by me.. Even the sites that are not duplicate content seem to still pay nothing in my current adsense account.
Becuase of this I gave my brother a site from my account, so we could test google and see if it would pay different in his adsense account. Sure enough they paid 4 times as much continually per click in his account. Same campains, same site etc.
Does google keep grudges or will they eventually pay me OK again?
Can i open a new adsense account for new sites under my same name but seperate account or do they catch on?
I have been told they do not like this.
Can you help?
thanks
Sean
In your article you said to only focus on quality traffic to
your site.
Get traffic from Search Engines and links from sites about topics related to yours. Avoid cheap traffic brokers like the plague! They send lousy traffic (most of which is fake "bot-generated" traffic anyway and won't earn you a dime).
Does this mean not to use adwords campains? Does it mean to try and get backlinks from sites? Can you please specify a little more.
Thanks Alot,
Sean
Interesting. Jonathon you should visit my blog. Bring your friends like Cheney,Comm,Glazer, etc.
Found a good article on Smart Pricing with Google Adwords. A good article with lot's of other links related to Smart Pricing. I have put the link on my blog. Check it out.