Google has said very little publicly about Smart Pricing secret sauce which results in some publishers earning more money for a click while others earn less (and yes, the advertiser will also pay less accordingly).
Here is the basis of how smart pricing works:
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.
And this often used example explains how this works more precisely.
As an example of smart pricing, consider two websites, each related to digital photography. The first page features digital camera reviews, while the second offers photography tips. Clicks from the page of photography tips might be charged less, because they are expected to convert into sales less frequently, resulting in lower value for advertisers. Google data determines that clicks from the digital camera reviews convert better, so clicks from this page are not discounted.
And since very little is publicly disclosed to publishers about how smart pricing specifically works, there are many questions surrounding it. However, while AdSense was attempting to get a publisher back from YPN, one support team member disclosed more details than perhaps he or she should have.
Here is what that team member disclosed, as well as other tidbits already known 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
This raises the question about whether publishers should be removing AdSense from sites they suspect are converting poorly, in order to increase their smart pricing percentage. The loss of revenue could be more than made up with higher smart pricing across the rest of the account. But publishers do not have access to any of the data that would be used to determine which sites (if any) are converting better than others.
It would also be hard to tell this from AdSense stats – even using channels to differentiate sites because one site with a low CPM could actually be converting the highest, but is simply in a lower earning niche. But a publisher could mistaken a low CPM for also being poorly converting and remove those ads… which could result in even smart pricing reducing overall per click earnings even more.
Other things can also affect day to day earnings that have absolutely nothing to do with smart pricing. This means it is extremely hard to track without information AdSense is unwilling to disclose about each account.
This kind of unknown situation makes it very tempting for publishers to want a second AdSense account, especially for publishers that have quality sites as well as “less than quality” sites. While second accounts are hard to get, I bet there are publishers who will be working on getting a new company name for this purpose.
How do you plan on using this information? Removing AdSense – or swapping it for YPN instead – and wait a week or two and see if there seems to be an increase in CPM? Wait and see what others do?