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Thread: Adsense Smart Pricing

  1. #1
    SonnyCooL's Avatar
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    Adsense Smart Pricing

    Any one can explain to me what is Adsense Smart pricing ...
    from last few month, i make around 20-30 daily from 3 site (5k UV make 8-15, 1.5kuv make 6-10, 1kuv make 5-10 daily). March avr CPM is 1.25

    But today something change, ALL my site making good profit, min payout per click around 0.50 .... is just 7 hour pass i make 60 dollar today and no fraud click (click behavior normal) ....
    Today CPM is 8.00..

    Can some one explain to me, i want to keep this payout


    My site niche :
    Humor Site.
    Property Site.
    Automotive site.
    Financial Site.
    Thanks

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    Will.Spencer's Avatar
    Will.Spencer is offline Retired
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    Smart Pricing is one of those elfin magic things that Google does [i]and refuses to disclose the details of to their customers, their partners, and the public.

    Here's what we think we know:

    • It's based upon the RoI received by the advertisers (How in the heck is that calculated?)
    • It's recalibrated once a week

    Two weeks ago I was seeing eCPM's higher than I had seen in years. This last week was the exact opposite. I saw a 40% eCPM drop overnight with no change in CTR. Sometimes I think Google does it on purpose. I feel like Pavlov's dog, salivating over a treat that I am only 50% likely to get.
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    Quote Originally Posted by Will.Spencer View Post
    It's based upon the RoI received by the advertisers (How in the heck is that calculated?)
    I've read a lot of theories about Smart Pricing, but it remains one of those mysterious 'black box" issues with Google.

    The only way that they could come close to calculating ROI is with conversion tracking, but that only really works if an advertiser has a sign-up form or a shopping cart and no other method (such as a phone number) for a user to contact them.

    I don't know what percentage of advertisers use conversion tracking, but based on my experience running campaigns for 50+ advertisers, there are very few advertisers for which conversion tracking tells them anything meaningful. I've used conversion tracking successfully on a dating site, a few e-commerce sites, and a couple of lead generation sites, but that is it. Even with those sites, more often than not conversion tracking just confirms that AdWords advertising is not cost effective unless there is a lot of profit margin built into the product or service.

    Conversion tracking tells an advertiser (and Google) the cost per acquisition, but Google would actually have to know an advertiser's profit on a product or service in order to calculate an actual ROI.

    Perhaps they alter eCPM weekly to influence their own ROI.

    Based upon the following 2004 article, it looks like Smart Pricing is adjusted to reflect the odds that a user who clicks on an ad will turn into a customer.

    http://www.google.com/adwords/select/news/sa_mar04.html

    That would mean that the countries of origin of the users who clicked on the ads could influence eCPM. In other words, if the majority of your users who click on ads are in the USA and Europe, eCPM and Smart pricing goes up. If the majority of users are from China, Russia, etc., then eCPM goes down.

    If this is true, then one could logically conclude that blocking traffic from all countries where users are not likely to make a purchase would raise eCPM.
    Last edited by TopDogger; 5 April, 2010 at 21:05 PM.
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    javanx3d (5 April, 2010), tmongy (6 April, 2010), Will.Spencer (6 April, 2010)

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    thesyndicate is offline Newbie Net Builder
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    Right i get loads of spam from Russian people and i am sure they never buy anything of the products i am sure. I also have 3 image ads on my 3 ads on the page maybe i should block this company because it is kind of boring.

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    Quote Originally Posted by Will.Spencer View Post
    Two weeks ago I was seeing eCPM's higher than I had seen in years. This last week was the exact opposite. I saw a 40% eCPM drop overnight with no change in CTR. Sometimes I think Google does it on purpose. I feel like Pavlov's dog, salivating over a treat that I am only 50% likely to get.
    At least I'm not alone in here...

    I've noticed some recovery yesterday though.

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    bogart's Avatar
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    Quote Originally Posted by TopDogger View Post
    I don't know what percentage of advertisers use conversion tracking, but based on my experience running campaigns for 50+ advertisers, there are very few advertisers for which conversion tracking tells them anything meaningful. I've used conversion tracking successfully on a dating site, a few e-commerce sites, and a couple of lead generation sites, but that is it. Even with those sites, more often than not conversion tracking just confirms that AdWords advertising is not cost effective unless there is a lot of profit margin built into the product or service.

    Conversion tracking tells an advertiser (and Google) the cost per acquisition, but Google would actually have to know an advertiser's profit on a product or service in order to calculate an actual ROI.
    Conversion tracking also doesn't track repeat business or the value of gaining a client.

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