Adsense smart pricing – Tall tale

I have to admit, I tested on you a very interesting thing in the past few weeks. I don’t feel sorry because if I wouldn’t, I would have no reason to write this post and I wouldn’t know more about an AdSense myth.

The subject is quite interesting: AdSense Smart Pricing.

So I’ve read an article just before I started the AdSense Smart Pricing test. It’s basically about, if your AdSense performance is low, you get low earnings per clicks. Now as a SEO would say: the theory says, if you have low CTR, your earning per click will be also lower than if you’d have high CTR.

The first step is to determine what is an average CTR, to have a reference. One of my articles is about average CTR, what I wrote there is that the average CTR is about, let’s say 6%. That means that from 100 visitors on pages where you display adsense ads, 6 clicked an ad. I consider 6% to be a good CTR, it’s not too high, nor too low. High is not good because if you have a two figure number as CTR, that rises the flag at Google, you know: “Oops, this account performs too well, let’s see why”. And that’s not good. Too low on the other hand is not good for you, obviously.

So, how can one increase the CTR, there are dozens of options: blending, placement, borders, images above the ads… many tricks. But one of the most effective is to show ads *only* to the visitors which come from search engines. A good coder can do it in less than 30 minutes, if anyone is interested I explain how can it be achieved, but this article is not about this subject. It’s proven, that the users sent by a search engine click ads much more often than the ones who were referred by other sites. Don’t ask me why, they just do.
So, as the CTR is practically the per cent of the users who clicked ads on your site, it’s logical that if you show ads only to those who you know that will click ad, your CTR will be boosted.

Again: the myth says that if you have a low CTR, you will get only small earnings per click.

I applied to Devoracles and 2 other blogs I manage the above explained targeting, I showed ads only to the search engine referred visitors. And I think I only lost.

The earnings per click remained the same low as they were before, absolutely nothing has changed only the CTR has been increased and number of clicks dropped a bit since I didn’t show ads to everybody: thus I lost money.

So, let’s debug: what did I do wrong?

Absolutely nothing. OK, I only wasn’t as documented as I should have been. Smart Pricing means something completely different thing and is in absolutely NO relation with CTR!
Smart pricing is a tool to protect the AdWords advertisers. They don’t just want to show ads for you (sometimes they do, but that’s something else), they usually want to either sell a product, sign up for their newsletter, create an account, they want conversion to increase their ROI as they spent money on advertisement. Since the conversion rate on the content network –which is formed by billions of webpages where AdSense ads are displayed– is extremely low, Google protects its advertisers by lowering the earning per click for the AdSense publishers.
I explain: The AdWords advertiser wish to pay $1 per click. If somebody on the content network clicks on the advertiser’s ad, then immediately when the advertiser’s page loaded, the user closes the window, the advertiser lost. To compensate the advertiser, Google won’t charge the advertiser with $1 as the advertiser wished, but with, let’s say only one cent. So the AdSense publisher on whom site the ad was clicked, will earn only 1 dam cent.

Can Smart Pricing be avoided by the AdSense publishers? I guess the answer is no. We can’t instruct our users to remain and interact with the advertisers’ sites when they clicked on an ad. Its against the AdSense TOS. So our only relief is to calm down and be happy with that one cent we earned, it’s still better than nothing.

Another myth busted.