The last few weeks I’ve been coming across this “Smart Pricing” term quite a lot – people tend to casually toss it into conversations without seeming to feel the need for any further explanation, other than that it’s a Very Bad Thing. I’m not sure if this is:
- to give the impression they know more than they actually do, or
- because it’s so obvious that everyone knows exactly what it’s all about!
Well, I don’t mind admitting that I don’t (or didn’t) have a clue what they were talking about, so I decided to find out.
Is Smart Pricing still relevent?
The first thing that struck me when I did a search for adsense smart pricing is that a lot of the top results seem to date back to 2005, which led me to wonder if this is even relevent anymore! After all, three to four years is a long time in cyberspace.
However, there are plenty of references to it in Google’s AdWords documentation, so one must assume it’s alive and well.
Smart Pricing explained
So what is it exactly? Here’s a nice concise explanation from the AdWords Learning Centre:
Google uses “smart pricing” technology for clicks made in the content network. Ads in the content network sometimes return lower conversion numbers than ads in the search network. To make up the difference, smart pricing automatically lowers the cost of these content clicks.
Elsewhere we read:
If Google determines that your ads are not likely to perform as well on the Google Network page as on Google web search, the AdWords system may reduce the maximum CPC bid for that site.
Now, although this reference specifically says “for that site”, it seems generally accepted that in actual fact smart pricing affects an entire AdSense account. So if, for example, you display AdSense on several sites, and one of those sites gets smart priced, it affects the value of clicks across all your sites! Here are a couple of examples of others discussing this issue.
How to prevent Smart Pricing
A simple solution to this might be to have multiple AdSense accounts, one per site, in order to isolate them from each other’s harmful effects. But unfortunately this is against Google’s terms and conditions.
Courtney and others advise removing AdSense from poorly performing sites, to see if this leads to a net gain from your better performing ones. Fortunately smart pricing is quite dynamic, and results are generally seen in a few days to a week.
Now, I don’t know if my account has been smart priced or not, but I think I’m going to give this a try for a few weeks, and see what happens. Of course I’ll be sure to let you know what I find out!
Have you experienced this issue? Please share your experiences in the comments section!
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I’ve read about this as well. I think people usually point to it as the culprit when they’re not getting as much per ad click as they feel they should, when taking other information into consideration. Good luck with the test.
Just like you I read about Smart Pricing but didn’t really understand it so I had to look into it as well and I came to the same conclusion that you have.
Since then (about one month ago) I’ve been testing this and have removed Adsense from sites with 1-5 cent clicks + removing any translation plugins that I had on WordPress blogs as my statistics has shown that once I installed these plugins my CPC has dropped significantly.
I can conclude with 100% certainty that these changes has caused what I have experienced but the prices on clicks have more than doubled on most sites so I’m happy
You know, this is something I have actually been thinking about for a while, but I hadn’t ever heard of “Smart Pricing.”
I have one site that is just not preforming and I had considered removing the adsense, just to see if it would have any effect on my other sites. Now that I know about smart pricing, I am definitely going to pull them off of that site for awhile and see what it does. It will be an interesting experiment…
Hi,
I will give you my two cents for what it is worth.
Smart pricing has nothing to do with CTR (click through rate) and is not indicated by the CPC (cost per click) you recieve.
You can get 10 cents per click and not be smart priced or get $2 dollar clicks and be smart priced. In this case a 10 cent click might be the top paying cost per click, and yet in the case of the $2 the avarage cost per click you should recieve might be $20.
If you do not optimize your posts to generate the right ads and to bring in the right traffic, you run the risk of being smart priced. For example if your site is called “Blue Widgets” and your post title is “Cheap Blue Widgets” you will bring in traffic for “cheap blue widgets”, great, yes?
Well maybe not! If in your post you go on to mention 10 times how “expensive green widgets” are not worth the money, you will generate adsense ads for “expensive green widgets” – Welcome to smart pricing… The wrong traffic being shown (and maybe clicking) the wrong ads.
Take care
Red Rock
Thanks for the tips Mikael. In my case it’s too early to tell, but I’m keeping a close eye on things.
Dover: well, be sure to let us know how it turns out!
Adsense smart pricing is just a measure in Google’s algorithm that takes care of click fraud and their precious advertisers. If your traffic is not extremely targeted (read organic) don’t expect to get much for those click. The CPC is going to drop drastically. There are some other issues related to smart pricing as keyword focus and having adsense on several sites (if one got priced that whole network is going the same way) etc. The internet is full of good information on smart pricing. Search for “griz smart pricing” on google and read Griz’s blogspot blog if you want to find more relevant and quality information. It’s not my blog by any means, just a few tips for those that want to improve their adsense knowledge.
While my post maybe a bit offtopic I always wonder why people just do adsense instead of affiliate programs and offers ? Waaay more money can be made. Without so much fear of getting smartpriced, banned, etc. Well, you can be banned, but you have choice!!!
Alex, that is a valid question and one that I have thought of many times. For me personally it is a choice of being good at creating content sites and get them ranked fairly high for great phrases.
If I were to change my ways to do affiliate deals I would need a lot of new skills that I do not currently have.
I’m talking things like Copywriting skills, doing Adwords, email marketing, creating Personas and a lot of other stuff that you don’t need to know when doing content sites.
From what I’ve been able to read around the web most internet marketers started with either Ebay or Adsense because it was easy to jump into when you’re new. All of them have however evolved to doing affiliate marketing -> creating their own products -> creating membership sites -> public speaking.
So when the time is right I might jump to affiliate marketing. At least at that point I already have the traffic from the organic ranking
@John, I agree that Grizzly has the best information on Smart Pricing (that’s where I read it first) but what other great sources have you found? Besides Grizzly’s blogs I can’t find much good content on the subject.
I heard a rumor that having an about page, a contact page, and a privacy policy helps to improve your site “quality” in the eyes of Google, thus giving you a chance at higher earnings.
Till then,
Jean
Mikael: Thanks for that excellent reply – I’m pretty much in the same boat as you, although having removed AdSense from this blog I’m going to have to rethink my strategy a bit. Grizzly is certainly pretty inspiring with the use of AdSense, from the little of his that I’ve read so far. Although he freely admits that it doesn’t work on every site. Basically you have to find what works for a particular site, then optimise.
I have also heard that if you have a privacy policy and sitemap and about page and contact form, google will smile upon your site. So I will be adding those to all my sites.
This is actually very good for both sides! I have heard the term before, but I didnt bother looking up what it meant.
I came across the term once or twice but to be honest, I didn’t even have the slightest clue what it was. Not even today though.
Now that you brought up the subject again, I guess I really need to find out what it is. Let me first start from Griz’s site.
Yan
Generally speaking, content network ads in Google are a waste of time and money, thus the reason for the Smart Pricing in the first place. I have never had any profitable results in the content network. However, the ability to now track and monitor individual site performance and placement for your content ads at least makes the possibility of profitable cont network advertising a possibility.
Yan: yes, it is quite a confusing issue. But Griz seems to have it all figured out, and I must say it’s starting to make sense to me as well. It doesn’t sound like there’s an easy solution though for what he terms “social” blogs like ours.
Rodney, I believe the “easy” solution is to go for quantity and not quality. I remember Griz referring to people like Joel Comm (who it famous for making a killer Adsense income) that is, according to Griz, winning the game on volumen instead of high click prices.
I don’t think you can say that there is a right or a wrong way to do it. I started in the quantity game but have moved towards the quality game but I have no good explanation of why
I haven’t heard of smart pricing until I read your post. that give me the idea! Thank you for sharing this to us.
It´s just a way of trying to keep its advertisers happy by lowering the cost of junk traffic. Unfortunately, they do this at your expense. Having poor advertisers on your site, will lead to you users clicking the adverts, then leaving the horrible site they land on almost instantly. When people do this, Google will think you’re sending out junky traffic, when actually it’s the advertiser’s site that is at fault. This will lead to the money you get per click, going down.
I had wondered for awhile if this was happening to my sites…my one site gets a lot of traffic and a lot of clicks…but the clicks don’t pay as much. Another site I have gets just a fraction of clicks and traffic, but its often outperformed the high traffic ones.
I tried leaving it off a few of my potential “culprit” sites but didn’t see any difference after a week…
So i can say I am as clueless about this as the next guy!
Chelle: I don’t belive CTR to be a reliable indicator of whether you’re Smart Priced or not – that’s got more to do with ad placement and your target audience, I think. How much you get per click is the thing – lots of low-value clicks could be an indication of smart pricing. Unfortunately there doesn’t seem to be a definitive way of checking, or of solving the problem other than what you’re already doing: removing ads from suspects and waiting a few days to see the effect. Tip: rather than physically removing the ads you can simply remove sites from the Adsense Setup > Allowed Sites tab in your Google account – this’ll stop clicks from those sites being counted.
A low CTR definitely hasn’t got anything to do with being smart priced. A low CTR is rather showing you that:
a) you have poorly targeted content
b) you’re in a niche where people don’t click ads (like “make money” niche) or
c) you ad placement needs serious improvement
As for finding out whether you’re hit by smart pricing (which most sites aren’t) you will need a lot of testing and some seriously focused sites.
I believe that one of the main reasons that people are not seeing high click prices (in markets where they ought to see high prices) is that their sites simple aren’t as target as they would want them to be and in combination might not have that much authority (PR, age, incoming links etc.).
I can’t prove that authority plays a part in it but I am confident that it does.
Mike: interesting perspective – thanks for commenting.
I have for sure experienced smart pricing with my Adsense account. I have followed Court’s and Grizzly’s advice when it happens and delete the adsense code on poorly performing sites and my numbers increase.
Phil
I used to use adsense on all of my sites but I’ve begun to use it only on a few niche specific sites and I’ve noticed my per click earnings have gone up. Not sure if it was because of smart pricing or not, but I have noticed a difference.
Snakes: thanks for sharing. You know, when I first heard about this Smart Pricing malarky I was quite dubious that it really exists. But since taking adsense off my worst-performing sites a couple of weeks ago, I have also noticed a definite improvement in my CPC. It’s still a bit soon to say for sure, but it’s looking increasingly like my account has been smart priced all along!
Well I believe I am having a case of extreme smart pricing because as of late all of my clicks are earning me extremely low amounts of money, which is frustrating.
I might try taking the adsense off some of my smaller sites and see if that works
At this point I’m entirely convinced “smart pricing” exists. Even, as you’re article points out, Google has acknowledged it exists. Don’t know what purpose they would have in lying to publishers about it. After all they want to make money too and they do that by advertising revenue.
Snakes: I wasn’t suggesting Google was lying about it, just that it seemed like one of those urban legends you hear about all over the internet. I must say though that I’m also pretty convinced at this stage – since taking adsense off a couple of poorly performing sites, I’ve seen a dramatic increase in CPC.
Upon reading your post, I am quiet intrigued about this Adsense. So, I checked it out and it seems interesting. I have a question though, does Adsense only work if your site has many traffic?
Sheena: it works with any amount of traffic, but obviously your earnings are proportional to traffic – the more traffic, the more revenue. Note however that it doesn’t perform equally well in all niches – it really depends on your audience and where the traffic is coming from…but that’s another topic altogether!
I think that smart pricing is counted for only one specific website and relies on your:
1) content
2) phrase searched on google
3) site names
4) minor factors – tags, site name and so on.
Other sites on google adsense have no influence.
I’m afraid I disagree – my experience and that of many others I’ve read about says that it’s on a per-account basis. So if you have 10 sites all sharing the same Adsense account, all 10 sites will be affected if one is smart priced.
I didn’t believe it at first either, but my average CPC has definitely gone up significantly since removing ads from my poorer-performing sites.
People tend to get paranoid when talking about smart pricing. You can’t get an Adsense account for every website, because you can only have one Adsense account.
You will know when you get smart price when you start getting only 1 cent or 2 cents clicks.
So you’re telling me that there’s no way of checking if the website has been smart priced? Don’t the inform the user about that? This seems a bit unfair…
Dieta: Nope, they don’t – it’s up to you to figure it out yourself.
Google has far too much power over us website-owners, that’s for sure.
Google verdient veel te veel geld met adwords waardebepalingen dat is een feit. Het lijkt wel alsof ze kunstmatig hooggehouden worden door ze.
Google earns far too much money with adwords valuations that is a fact. It seems that they are kept artificially high by them.
I currently have one website with adsense, and I’m planning on rolling out 5 or 6 new websites later this year. I planned on putting adsense on them right away, but after reading this I may let the sites sit for awhile, then roll out adsense month by month on each site to verify I do not get smart priced, or to tell which site is causing the problem.
Tyler: I think that’s wise. It’s a pity we’re not allowed to have multiple adsense accounts cos that would make things a lot easier. Still, you could always find a friend to sign up for a seperate account…
Google doesn’t make money from ‘smart pricing’ … The best way to ensure you benefit from AdSense is to create compelling content for interested users… Google basically decides in the interest of the advertiser if the traffic you have just provided to their site is likely to convert into a sale and decides to credit you the publisher accordingly….
I hate adsense smart pricing from google. That sucks smart pricing make my earning cut 50% to $xx per day.