Smart Pricing In Adsense CPC Is Hurting Publishers, How To Turn It To Your Favor And Make More Money With Your Blog.

What is Smart Pricing
From the perspective of an advertiser, Smart Pricing is
a feature designed to make sites more appealing.
Advertisers bid on ad positions in auction. The price
they bid depends on a number of factors, including
traffic quality rating, volume and conversion rates for
the site in question. When more than one advertiser is
interested, they can one-up each other on bids, which
results in the site earning more money on each click.
The way smart pricing works is familiar to any auction
shopper. An advertiser decides on the maximum they
want to bid. Google then makes the absolute minimum
bid for the ad space, based on the business metrics it
measures. If another business bids, Google compares
the maximum bids and goes with the lowest possible
bid with no competition.
For publishers, unfortunately, this often results in
lower bids than were previously made. Smart pricing
changes from month to month, and if a site performs
poorly, the bids drop. This leads to many marketers,
particularly those with middle or low quality sites, to
find their revenues drop sharply.
Smart Pricing isn’t new. It was introduced by Google all
the way back in 2004, and it’d been a thorn in the side
of marketers everywhere ever since.
How Smart Pricing Hurts Publishers
Smart pricing can be very detrimental to some
marketers. For example:
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Smart pricing tends to reduce the price of your
ads, which means advertisers pay less, which means
you earn less. The idea is that over time the
advertiser will bid more because your traffic is
proving itself worthy, but in practice this rarely
happens.
Smart pricing covers your whole AdSense account,
not just the one individual site that’s smart-priced. If
you have ten blogs, and one of them falls under the
threshold to need smart pricing, it will it hurt all of
your sites.
Smart pricing is not flagged as a status you can
monitor. You can’t log in and see “Site X has entered
Smart Pricing mode.” You simply have to guess based
on nebulous and hidden criteria.
Additionally, Smart Pricing is reviewed on a weekly
basis. If your site is smart priced on Monday, and you
fix it on Tuesday, you won’t see any change until the
following Monday. It can, at least, be reversed, and it
can also be worked around in the case of multiple sites.
Just remove AdSense from the offending site to protect
your other sites. You can put it back when you’ve
improved the quality of that site.
Avoiding or Fixing Smart Pricing
Upon reading the above, most people would have one
initial thought; just make another AdSense account.
You can put the smart priced site on that secondary
account and work on it, while you maintain your non-
smart-priced sites on your primary account.
Don’t do this! The problem here is that you need
special approval from Google to have more than one
AdSense account, and such approval is incredibly
difficult to get. You basically have to have multiple
businesses under multiple names with multiple sets of
contact information. It’s a difficult situation to maintain
and tends to have negative effects on tax preparation,
for minimal benefits from AdSense.
The first choice you need to make is whether or not to
keep the smart priced site on AdSense. If it’s bringing
down the earnings of several other sites, it’s probably a
good idea to segment it out. You can run ads for
another network until you improve your metrics
enough to get back in.
At this point, it’s time to figure out how to fix the
issues that led to being smart priced.
There’s a common misconception about smart pricing
that it’s dependent on CTR. Your click through rate is
important for commerce, but it’s not the be-all and
end-all decision making factor. Google even says as
much in their overview of smart pricing; CTR doesn’t
matter for it.
What does matter, however, is advertiser conversion
rate. You don’t just want to send a lot of clicks to the
advertiser, you want to send users who will actually
convert. The reason this exists is to combat bots and
low quality clickfarm traffic. You get paid per click, but
the advertiser is only paying on the assumption that the
traffic they receive is going to earn them more money
than they spend on advertising. Those clicks need to
convert, or your site isn’t worth spending money on.
Therefore, to fix the problem, you need to figure out
how to increase the conversion rate for your
advertisers.
Refine either your content or your advertising.
One of the primary reasons ads don’t see conversions
is the lack of consistency between topics. If you have
camera manufacturers advertising on your site, you
would do well to write about cameras.
Consider removing some of your ads. One of the
common causes of a low conversion rate is just
having too many ads on your page. In particular, text
link units aren’t very effective for converting users
these days. Banners and native ads are much better,
particularly when positioned properly.
If you’ve been buying traffic, take a look at the
source and quality of that traffic. It’s possible that
you’ve been buying low quality bot traffic, which will
earn you money from clicks but will decrease your
earnings due to a lack of conversions.
Be patient with your changes. As I mentioned, it
takes a week for Google to review changes you have
made and reconsider your smart pricing status. You
need better results, you need them to be consistent,
and you need patience to let them circulate to the
point that they benefit you.
Thankfully, many of the changes you’re making will also
benefit your SEO and user experience, so you can
expect overall traffic – and thus revenue – to rise on
top of getting your old ad pricing back.

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