Wednesday, September 19, 2007

What is Smart Pricing on Adsense?

Google's smart pricing feature automatically adjusts the cost of a keyword-targeted content click. So if our data shows that a click from a content page is less likely to turn into actionable business results - such as online sales, registrations, phone calls, or newsletter signups - we reduce the price you pay for that click.

Some info about smart pricing,

  • Smart pricing affects an entire account. It is not on a per page or per site basis.
    One poorly converting site can result in smart pricing impacting an entire account, even sites completely unrelated to the poorly converting one.
  • Smart pricing is evaluated each week. So removing ads from sites you suspect are converting poorly could result in seeing an adjustment to a higher smart pricing percent in as little as a week.
  • Smart pricing is tracked with a 30 day cookie, so you could be rewarded for new conversions that saw the initial click from your site up to 29 days earlier.
  • Image ads are also affected by smart pricing.
  • With smart pricing, an advertiser could end up paying less than their minimum bid, which would theoretically include the minimum bid price available, meaning publishers earn less for even the minimum valued clicks.
  • Conversions for smart pricing publisher accounts are tracked by those advertisers who have opted into "AdWords Conversion Tracking"
And, here is what Google says,

1. Many factors determine the price of an ad
2. Clickthrough rate doesn't affect advertiser return on investment (ROI)
3. Google doesn't make money from 'smart pricing'
4. Remember the old chestnut: "Content is King"
This is found on Adsense blog here

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