AdMoolah News and Views

AdSense Smart Pricing has gotten a lot of buzz in the past few days. It all started when a thread on WebMasterworld was started by kurtpdx. In it he says Google called him and during that conversation it was revealed that:

1. Smart Pricing can affect multiple sites across an account. That is, if one site in your account get reduced payouts per click because of smart pricing, other sites in your account will also get reduced payouts.
2. Smart pricing is re-evaluated weekly
3. There is a 30-day cookie that Google uses to track conversions.

The reason I called this post Smart Pricing “Rumors” is that none of this has been confirmed. This is second hand information provided by an anonymous poster. And the information he gives is based on a phone call from a single customer service representative at AdSense. It is possible the rep got things wrong, that the poster misunderstood, or that its just a plain fabrication.

One thing that is true is that publishers know very little about smart pricing. This can lead to some wild speculation and lots of frustration. Google is very close lipped about exactly what goes into smart pricing, making it very difficult for publishers to know how to counteract the effects of smart pricing. One of the reasons I started AdMoolah was because Google supplied so little information to the publishers, and this is yet another example of that.

Many people are suggesting trying to remove AdSense ads from poorly performing pages to avoid the effects of smart pricing. I think this is a nearly impossible task for a few reasons:

1. It is impossible to know which pages on a site don’t perform well. Publishers have no visibilty into which clicks on their own sites actually convert to actions on the advertisers site.
2. If Google does use a 30 day cookie to track conversions and it takes up to 7 days to re-evaluate smart pricing on a site, it could take 37 days for any changes to take effect. Given this huge time lag it would be very difficult to ascertain if any changes are actually working. So many other things can happen in such a large time frame it would be nearly impossible to separate the signal from the noise.

Something to remember is that Google doesn’t do this simply to punish bad publishers while lining their own coffers. If smart pricing is applied to a site, Google also gets less money. Smart pricing is there to give the advertisers a better return on advertising dollars.

I think Google should try to do some damage control. The level of frustration from what people perceive to be smart pricing is getting dangerous. People are leaving AdSense to try Chitika and Yahoo Publisher Network, and many are finding success with these other programs.

Additional commentary about this can be found at JenSense and ProBlogger.