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!

Related posts:

1. AdWords competition update

What’s your blog or website worth? The short answer is: it depends who you ask. And of course, no matter what anyone says, it’s only really worth what someone is prepared to pay for it. Nevertheless, it’s an interesting question in these days of the Credit Crunch.

Believe it or not, there are plenty of blog value calculators out there, offering to give you the crucial figure. So, just for fun, I plugged in my url to see what they have to say about the old hippo:

Hippo Web Solutions valuations

Hmm, some interesting numbers there, quite a wide variation, but at least they’re more or less all the same order of magnitude. I should probably disclose that I discounted one that valued it at just $103 though! Interestingly it valued several other sites I plugged in at exactly the same value, so I guess it isn’t working properly.

Now, obviously this isn’t anything to get too excited about; after all if you really are planning on selling your blog, any potential buyer is going to want a bit more to go on, I’m sure! Still, it’s a bit of fun.

Share your own numbers in the comments below…if you dare!

No related posts.

Just time for a quick tip today. If you’re using PerformancingAds, it’s essential that you remember to tick the No Follow checkbox in your region settings:

It’s not ticked by default, so it’s up to you to do it for each of your regions. Why?

Why nofollow?

Well, if you don’t, you may find your site is more attractive to advertisers, as they get a bit of link juice from your site in addition to any traffic you send them. That’s not a bad thing, and you’ll probably be able to charge a bit more for your ad space as a result.

But. (and it’s a big but).

Google does not like paid links, and will penalize your site in their rankings if they catch you. So you may well find any short-term financial gains wiped out as your traffic dries up.

So, if you get much traffic from search, remember to tick that box!

Related posts:

1. PerformancingAds Pecking Order
2. Does Google penalize paid links?

There’s recently been a small debate about Google’s stance on paid links in the comments section of one of my posts, and whether or not you run the risk of being penalized if you buy or sell links. Mitch helpfully pointed us to an article by Matt Cutts on the subject. In case you don’t know, Matt is a Google policy maker who had a big hand in drafting the original quality guidelines.

I spent an enjoyable afternoon reading that and a few other related articles (and their comments) on Matt’s site and the official Google guidelines to try and clarify exactly what Google’s position is. Needless to say some of the comment exchanges are fairly heated, with a lot of emotion on both sides. This is my understanding of the issues:

Google’s point of view

• Google’s stated aim is to provide users with the most relevent results possible, with content represented in the SERPs on merit alone
• paid links muddy the water
• taken to the extreme, allowing paid links essentially opens the way for sites with the biggest budgets to dominate the SERPs

The Webmaster point of view

• Google is not the web and has no right to dictate other sites’ policies
• Google itself makes billions of dollars via sponsored links, so it would seem hypocritical of them to restrict other sites from doing so.

Read the comments on these two articles if you want more information, but be warned there are currently in excess of 585 (sometimes lengthy) responses between the two posts!

Google’s stance on paid links

Without taking sides, I want to summarise Google’s stance as I understand it.

Sites that sell links can lose their trust in search engines.
(from Matt Cutts’s blog)

Buying or selling links that pass PageRank is in violation of Google’s webmaster guidelines and can negatively impact a site’s ranking in search results.
(from Google’s Webmaster site)

In order to stay within Google’s quality guidelines, paid links should be disclosed through a rel=”nofollow” or other techniques…
(from the official Google Webmaster blog).

So it would appear that you’re free to buy and selll links without fear of falling out of favour with Google, as long as these links are marked with the nofollow attribute.

Penalties for paid links

Don’t participate in link schemes designed to increase your site’s ranking or PageRank … as your own ranking may be affected adversely by those links…
(from the Google quality guidelines).

Matt Cutts says on his blog that

link-selling sites can lose their ability to give reputation (e.g. PageRank and anchortext).

But in the same sentence he also says

Reputable sites that sell links won’t have their search engine rankings or PageRank penalized

Presumably this last bit is referring to sites that use the nofollow attribute for their paid links.

Case studies

There are plenty of examples of sites that have been penalized, for example check out:

• John Chow – John’s been in trouble with Google numerous times (a good reason why his site’s currently only PR3), but is big enough with enough diverse traffic sources to have survived, or even thrived in spite of it.
• David Airey has posted in detail about why he got penalized, and what he did to rectify the situation.
• GoCompare, a car insurance comparison site, also recently got penalized and reportedly lost almost 90% of their traffic as a result.

Conclusion

As I mentioned earlier, there’s a lot of resentment around the web about what appears to be Google’s arrogance in dictating how website owners should run their sites. Well, of course each one of us needs to choose how to respond to this: either give Google the finger (and face the consequences), or toe the line. Which option you choose probably depends a lot on how much you rely on organic search traffic. Most sites, I suspect (including this one), would be hard-hit by losing favour with Google, so it’s in our best interest to stick to their guidelines, whether you agree with them or not.

Related posts:

1. Don’t forget to Nofollow your PerformancingAds
2. All backlinks are created equal…not!

Have you ever wondered how to take online payments via your website for your own products and services? Well, there’s an easy way: PayPal. Yes, you can accept donations, payments for products and services, even set up recurring payments and subscriptions. And the good thing is you’re not restricted to buyers who have a PayPal account, because this mechanism allows your customers to pay via debit or credit card if they choose.

There are a number of benefits to using this service:

• Simplicity – PayPal handles all the technical details for you.
• Security – no secure connection required by you – PayPal handles this too.
• Trusted brand – because PayPal is one of the most popular payment methods on eBay, it is a very well-known and trusted service – and trust is vital when payment details are being exchanged online.
• Cost-effective – setting up your own merchant account is expensive and simply not worthwhile unless you have significant turnover. PayPal doesn’t cost you anything until someone buys something, and even then you won’t be paying much more than 3.4%.

So, before this starts to sound any more like an advertorial, I want to show you how easy it is to set up a Donation button to allow your adoring public to shower you with gratuities.

First things first

If you don’t yet have a PayPal account, now’s the time to get one. Head on over to the PayPal site and complete the sign-up process. Note that I’m basing this tutorial on the UK site, but I’m sure it’s the same for any of the other regional sites. From now on, I’ll assume you’ve successfully completed the sign-up.

Generate your button code

Log in to your PayPal account, select the Merchant Services tab, then click the Donations link under the Useful Links section. You should see the following wizard:

The form comes pre-populated with default options which you can simply accept, or you can tweak any settings you wish, then press the Create Button button to generate the html code that you can use to embed the donation button in your site.

Paste the button code into your site

Copy and paste the generated html into your site where you wish the button to appear – it’ll look something like this:

Go ahead and click it – you’ll be taken to the PayPal site to securely process your payment (feel free to give that a try too if you like ).

And that’s literally how easy it is. Generating buttons to allow your customers to buy specific products and services is a very similar process.

WordPress PayPal plugins

If you’re running a WordPress site, there are a number of plugins available to help you manage your buttons (a quick disclaimer: I haven’t tried all of these or even most of them, so can’t guarantee that they work with the latest version of WordPress – you’ll need to liaise with the plugin authors or support forums if you encounter any issues).

• EasyDonation – enables you to insert donation buttons into your posts using a tag, rather than cluttering them up with all that html and run the risk that you trample on it accidentally when editing.
• PayPal Donate Plugin for WordPress. This one allows you to display a small donation form in your sidebar, and it looks like you can configure it from within your WordPress dashboard, perhaps without even having to go into your PayPal account?
• Buy Me a Beer – similar to the previous one, except instead of asking your visitors to donate, you ask them to “buy you a beer” (or a cup of coffee).
• EasyPayPal – this allows you to manage subscription-based access to your site.
• ArtPal – helps you to sell one-of-a-kind items, by disabling the button once the item has been purchased.

More information

What I’ve told you so far is only the tip of the iceberg. Using standalone buttons is fine if you only have one or two items to sell, but more than that and you’ll want some sort of shopping cart facility. The good news is that PayPal integrates with many third-party shopping carts, and even has their own cart which you can use if you don’t already have one. For more information on these and other aspects of using PayPal to take online payments, visit their Website Payments page.

Related posts:

1. 10 Essential resources for Blogging
2. WordPress Translation plugin
3. How to widen the sidebar in WordPress K2

Internet Marketing, unsurprisingly enough, is the

…marketing of products and services over the internet

according to Wikipedia. But while it’s a relatively new phenomenon by this definition, limited by the amount of time the internet has been in existance, in fact its roots go back a lot further than that. Internet marketing is really just an evolution of Mail Order / Direct Marketing, which has been around for well over a hundred years.

Image courtesy of Heart for Japan

Overview of the Direct Marketing strategy

Yaro Starak recently wrote a very good overview of the elements of an internet business founded on these principles, in which he outlines three steps:

1. Get as much exposure for your business as possible
2. Make the first sale
3. Target these existing customers with higher-value products

The first sale is not where the money is made – its purpose is to convert members of the general public from step 1 into customers, the theory being that once someone has bought something from you once, they are far more likely to buy other stuff further down the line, which is where the real money is made.

I’ve often seen the exact same strategy being used for charity fundraising. The general appeal is usually pretty innocuous, something like

…by giving only £2 a week, you can help save an abandoned puppy / feed a starving child / etc

What they don’t tell you up front is that once you “sign up”, you’ll go on their mailing list and face a never-ending series of much higher-value appeals. Now don’t get me wrong – most charities do a great job, and I in fact support several myself. But this approach does tend to make you a bit cynical once you’ve been exposed to it a few times because it’s somewhat misleading: you, the “customer”, do the right thing, only to find yourself the target of a campaign of heart-rending appeals, and ignoring them is tantamount to saying I don’t care if another child in Africa starves today.

It’s all a bit distasteful

Yes, I’m afraid I do find it distasteful. It’s one thing being on the consumer side of the equation, but I ask myself – is this the way I want to earn a living? Sorry, but no. It’s a bit like the film Glengarry Glen Ross in which an estate agent goes to increasingly desperate lengths to try and sell real estate to prospective customers (great film, by the way, with a great cast).

Apparently I’m not the only one who feels this way – Caroline Middlebrook is also uncomfortable with direct selling. She prefers to employ less direct methods to generate an income: affiliate marketing and displaying advertising on her site. And in fact, I estimate that this is a far more common approach than the one Yaro outlines, not necessarily always due to a conscious decision, but simply because it’s less strategic and easier to adopt.

Incidentally, it’s also the approach that I prefer. So while you can see I have a few ads around and about, and include the odd affiliate link in my posts, I have no intention of implementing a full-on sales funnel on this site. Note that I don’t claim this is a better approach – in fact I believe you can make more money by employing a more direct strategy – I’m just not prepared to do it.

What’s your strategy?

These are not the only ways to make money online of course, but I think they’re two of the most common methods. Do you know of or employ a different strategy? Please share your thoughts in the comments section below.

Related posts:

1. The truth about article marketing
2. Duplicate content in article marketing
3. PerformancingAds Pecking Order