Blend Your Ads for Higher Click Thru Rates

A recent study by MarketingExperiments.com, "How Matching Ad Design to Context Improved Conversion by 127%" (available as an online Web Clinic in Windows Media and Real Player formats) has established what AdSense users have generally believed to be true, that blended ads generally perform better than ads that stand out from the site's content.

"Blended ads" are ads that use the same font, color scheme, etc. to the site's main native content. The study showed that blended ads "performed significantly better" than non-blended ads in both CTR and conversion rates.

The authors also suggested that the main reason for the increased performance is the effect of "ad blindness" when non-blended ads are used. As well as matching fonts and colors, the authors also suggested that, for maximum performance, any logos etc. used in the ads should be "small enough not to shout 'advertisement' so loudly as to be blocked by the subconscious 'ad filters' of content site visitors."

This study isn't exactly breaking new ground since blending ads has been recommended by Google and authors such as Joel Comm for a long time now. However, it's good to see some empirical data to support this. It's also important not just for AdSense (etc.) publishers but for advertisers who place their ads on handpicked sites - including advertisers using image ads. Thus, if you are advertising on site www.somesite.com, make sure that your ad is designed in such a way that it blends into the site's native content for maximum performance.

Tags: adsense

How to Tell If You Are Getting CPM AdSense Ads

Confusion still reigns regarding CPM AdSense ads, as I've discussed in my previous "AdSense Nonsense" post and elsewhere. I'm also still reading advice that if you place large AdSense ad units on your site, you're more likely to get CPM ads. So, how do you get CPM ads, indeed, what are CPM ads, and how can you tell if you are getting any on your site?

What are CPM Ads?
CPM ads are advertisements that are part of Google's AdWords program for which the advertiser pays per 1,000 impressions rather than per click. Thus, they are the only type of AdSense ad that pay you for impressions rather than clicks. However, even though your AdSense reports are showing relevant impressions, you may not get any associated earnings because an advertiser may be paying as little as 50 cents per 1,000 impressions, which is the equivalent of only $0.0005 per impression!

How Do You Get CPM Ads?
This is really very simple-you get CPM ads on your site if an AdWords advertiser, choosing to advertise with CPM ads, handpicks your site to advertise on. As AdSense help states:

Advertisers running CPM ads . . . select the specific sites on which to show their ads, and pay each time their ad appears.

Source: What are CPM ads? AdSense Help Center.

In the world of Google AdWords, the flip-side of AdSense, these ads are known as "site-targeted ads."

How Can You Tell If You Are Getting Any CPM Ads on Your Site?
You can very easily verify whether you are getting any CPM ads on your web site by using functionality built into AdSense's advanced reporting mechanism. Simply follow these instructions:

1. Log into your AdSense account
2. Click on the "Advanced Reports" link under the "Reports" tab
3. For the "Choose product" drop-down, make sure "AdSense for content" is selected
4. For the "Show data by" drop-down, mak sure you select "Individual Ad"
5. Check the box immediately below the "Show data by" drop-down, labeled "Show data by targeting type - contextual or site"
6. Select the Date Range you want to check for
   
7. Click the "Display Report" button
8. In the report results, you should see a column labeled "Targeting." If you are getting CPM ads, for some (or all) days you will see the word "Site" in this column, with a value in the "Ad Impressions" column. Any days that do not have a "Site" value as well as a "Contextual" value in the "Targeting" column did not get any CPM ads. (Note: "Contextual" in the "Targeting" column refers to the standard cost-per-click ads.)
   

Using this report, I can see that I had some CPM ads on March 3, 4, 5 but none on March 2 or 6.

Technorati Tags: adsense

How Google Targets AdSense Ads

There is a lot of speculation about how Google actually targets AdSense ads. Does it read the keywords meta tag? Should you put keywords in b(old) tags? What about em, strong, or i(talic) tags? Does font-size matter? What about the title tag? And so on.

To make matters worse, I regularly read messages from supposed AdSense experts stating with apparent authority that most of the above really do make a difference, particularly the meta keywords and b tags. So, do these things really make a difference?

Well, the answer to that question was recently supplied by a Google employee and I have kindly been given permission to share that information with you, courtesy of the direct recipient, Jon of Cobnut Web Services.

However, before we take a closer look, we need to examine what we already know from official sources about how Google targets AdSense ads.

What Google Says About Ad Targeting

In AdSense's help pages you will find the following in answer to the question, "How does Google target ads to my website?"

We go beyond simple keyword matching to understand the context and content of web pages. Based on a sophisticated algorithm that includes such factors as keyword analysis, word frequency, font size, and the overall link structure of the web, we know what a page is about, and can precisely match Google ads to each page.

In addition, according to AdSense help, the only method of emphasizing some text over others, and having other text ignored, is by the use of Section Targeting.

Thus, we can conclude from official sources that the factors affecting ad targeting include:

1. Keyword analysis
2. Word frequency
3. Font size
4. Link structure (overall, web-wide)
5. Section targeting

However, many of those terms are pretty vague. Do "keyword analysis" and "word frequency" include the keywords meta tag, for example?

One point that is of great interest though is that font size is listed as a factor. I can only assume that this is true whether the font size is declared using font tags or CSS's font-size. Thus, it appears that words in a larger font may be given more emphasis than those in a smaller font. It is also my opinion that this applies mostly to headings and sub-headings that incorporate a larger font, not simply using a large font size for keywords that appear in the middle of sentences (if you see what I mean!).

What Has Been Shared With Me About Ad Targeting

Much of the information I received simply repeats the information above but it also contains a few hidden gems:

Our technology takes into account factors such as linguistics, keyword analysis, word frequency, font size, and the overall link structure of the web. AdSense only targets ads based on overall site content, not keywords within the meta tag or categories . . .

[i]f you'd like to display ads related to specific topics on your website, we recommend including more text-based content about these topics on your site to assist our crawlers in gathering information about your pages and determining relevant ads to display. Complete sentences and paragraphs are helpful to our crawlers in determining the content of a page. (Emphasis not in original.)

So lets, take a closer look at those gems.

Google Does Not Target Ads Based on the Keywords Meta Tag

AdSense only targets ads based on overall site content, not keywords within the meta tag

So, it is the overall site content that counts and not meta tag keywords. This is a very important point because it implies that you should be able to get ads that are relevant to your site even on pages that have low textual content provided there is sufficient text on the site as a whole.

Google Needs Text-Based Content

Now, this piece of information isn't exactly a surprise or new, but it's good to have it re-emphasized by Google that AdSense is contextual advertising with an emphasis on the text! If you don't have text, you won't get targeted ads.

Google Needs "Complete Sentences and Paragraphs"

Thus, if you want well-targeted ads on your site, you don't just need text, you need text that is comprised of complete sentences and paragraphs. That doesn't mean that Google cannot ascertain context from "telegram-style" bullet points or any other text but it does mean that the more keywords you have in complete sentences and paragraphs, the more accurately targeted your ads will be.

Summary

So, if you want highly targeted ads on your site, make sure your follow the following guidelines:

1. Put keywords in larger font-sizes (probably headings/sub-headings, etc.)
2. Try to ensure that pages linking to your site incorporate your keywords inside the hyperlinks
3. Use keywords inside internal hyperlinks (i.e. hyperlinks between pages of your own site)
4. Employ section targeting
5. Ensure there is sufficient "keyword-rich" text across your site as a whole
6. Make sure that your keywords are contained in complete sentences and paragraphs

Technorati Tags: adsense

AdSense Myths: A Quick Follow-Up

Yesterday I posted a short article about common AdSense myths, offering my opinion as to whether each myth was untrue or simply unsubstantiated. In response to a comment to this post, that has since been deleted by the author, I realize that I missed out some pretty important information. For the myths that I marked as unsubstantiated (unsub), I missed out my personal opinion as to whether those unsubstantiated myths are true or false. For those marked as untrue, I didn't give my reasons. So here goes (with the myths numbered as per the previous post).

1. Google gives more weight to words in bold (<b>) tags when allocating the ads to display (unsub)

I personally don't believe this is true at all. For what it's worth, I also don't believe it's true for regular search engine optimization ("SEO") purposes either. I do think that some people have thought to themselves "maybe if I put my keywords in bold the AdSense bot will take more notice of them" and that thought has somehow developed a life of it's own until it's been promoted as a valid means of emphasizing keywords for AdSense.

Now, as far as I am aware the only way for regular AdSense publishers to emphasize some words over others is to use Section Targeting, as described in AdSense Help.

Note, I think exactly the same thing is true of the <strong>, <em> and <i> tags.

2. Google gives more weight to words in H1 tags when allocating the ads to display (unsub)

My thoughts on this exactly echo my thoughts on the <b> tag, with the single exception that I do think H1 possibly has some benefit for regular SEO.

3. Google uses the keywords meta tag to determine the ads to display (unsub)

This is possibly the myth that I am most on the fence over. I think the AdSense bot may read the keywords meta tag but I've never read anything authoritative indicating that it does. The only way to find out would be to create a page with no other textual content and see what happens! For the moment, my opinion is a "definite maybe!"

4. The higher your Google Pagerank, the better paying ads you get (untrue)

I think this myth is a complete load of hogwash. Pagerank is an element of ranking search results, not which ads get displayed on your site. I also don't think Google has any mechanism in place whereby it gives better paying ads to one site as compared to another site that has equivalent content. I personally believe the only differences that occur are a result of Smart Pricing.

5. You are more likely to get CPM ads if you select the "image ads only" option (untrue)

As discussed in my earlier AdSense Nonsense post, there are both image and textual pay-per-click (PPC) ads. Furthermore, you only get CPM ads if an AdWords advertiser handpicks your site to advertise on. Thus, all selecting "image ads only" does is to limit the type of PPC ads you'll get.

6. The main source of differences in earnings per click is Google's "smart pricing" (untrue)

As I discussed in my article AdSense: Making It Work for You, on AdWords-for-Profit.com, the amount you earn is affected by the number of ad units displayed on the page because Google always puts the best paying ads in the first ad unit (as determined by the position of the ad code in your raw HTML). Thus, the more ads and ad units you have, the more lower-paying ads there will be for the visitor to click on. I personally believe this probably has a greater effect than smart pricing in many cases. Having said that, smart pricing is certainly not something to be taken lightly.

7. You may not display any other ads on the same page as AdSense ads (untrue)
8. You may not display any other ads that are related to the content of the page on the same page as AdSense ads (untrue)

I'll tackle these two together. You may display any other ads on the same page as AdSense ads provided three conditions are met:

a) That the ads are not "contextual." By this, Google means that the ads mustn't be automatically displayed as the result of some algorithm that determines the type of ads to display based on the page's content.

b) That the ads do not "mimic" AdSense ads. By this, Google means that the ads mustn't look like AdSense ads.

c) That the site as a whole does not contain "excessive advertising."

[Update: As of the January 2007 AdSense Program Policies update, the Site Content restrictions no longer expressly mention "excessive advertising." Google's policy on Competitive Ads and Services has also been updated, as I discuss in my more recent posts, "New AdSense Program Policies" and "AdSense Now Allows Other Contextual Ads?!"]

9. It is forbidden to edit the color codes of your ads directly in the Javascript code, you must do it via the AdSense setup interface (untrue)

I'm sure I'll get hung, drawn and quatered by many people for this but editing the color codes in your AdSense Javascript code is permitted. There is absolutely no difference whatsoever between using the AdSense Setup interface of the AdSense web site to edit the colors and simply editing the colors yourself. You are not permitted to alter the code but editing the colors isn't altering the code at all.

10. Google will close your AdSense account if your CTR is too high (untrue/unsure!)

As indicated, I am a tad unsure about this particular topic. However, I tend to believe that having a consistently and unusually high CTR may trigger some pretty severe monitoring by Google to ensure that those clicks really are valid but I can't imagine Google closing an account just because of a high CTR with no other causes for concern . . . but then again, I'm generally less than impressed with the way many AdSense accounts have been closed down without warning!

Technorati Tags: adsense

AdSense Myths: What's True and What Isn't

If you read AdSense help forums enough, you will soon discover a ton of common myths about AdSense, how it works, how ads are assigned, and so on. In this post I shall list several of the most common AdSense myths. Some of these myths are just plain wrong, others are often stated as fact but with no authoritative evidence to corroborate or discount them, so they may be true.

After each "myth" I am indicating in parentheses my opinion as to whether the myth is untrue or just unsubstantiated ("unsub"). Where applicable, I am also hyperlinking my opinion to other blog posts or articles of mine that express the background for my belief.

1. Google gives more weight to words in bold (<b>) tags when allocating the ads to display (unsub)
   
2. Google gives more weight to words in H1 tags when allocating the ads to display (unsub)
   
3. Google uses the keywords meta tag to determine the ads to display (unsub)
   
4. The higher your Google Pagerank, the better paying ads you get (untrue)
   
5. You are more likely to get CPM ads if you select the "image ads only" option (untrue)
   
6. The main source of differences in earnings per click is Google's "smart pricing" (untrue)
7. You may not display any other ads on the same page as AdSense ads (untrue)
8. You may not display any other ads that are related to the content of the page on the same page as AdSense ads (untrue)
9. It is forbidden to edit the color codes of your ads directly in the Javascript code, you must do it via the AdSense setup interface (untrue)
10. Google will close your AdSense account if your CTR is too high (untrue/unsure!)
    

Disclaimer: As stated, I am merely expressing my opinion as to whether these myths are true or false. Act on my opinion at your own risk!

Technorati Tags: adsense

AdSense Optimization: Tricks that Harm AdSense Publishers?

For a while now I've felt slightly uncomfortable with the term "optimization" when it comes to AdSense ads. However, this feeling of discomfort was irrevocably increased today when I finally read an AdSense publisher, and one who writes frequently in the official AdSense Help forum, refer to blending ad colors and "tricks" in the same sentence. This got me thinking about two key concepts that I want to explore further in this post. First, that AdSense optimization is, at least partly, about tricking the user into clicking on ads. Second, that this form of optimization may ultimately harm the AdSense publisher.

Optimization as "Tricking"

Whenever anyone asks about ad optimization, there is one piece of advice that is almost certainly given above and beyond any other, that of "blending" the ads. Blending means to make sure that the ads have the same background, foreground, and hyperlink colors as the rest of the text on the web site.

In addition, many dedicated AdSense publishers try to place their ads in such positions that the site visitors could easily be mistaken into thinking that the ads are not ads at all but are just regular links on the site; or make the "normal" hyperlinks less prominent, so that the ads are the things most likely to be clicked on. This is where I really start to have a problem. Is it right to earn money from hard working AdWords advertisers by tricking people into clicking on your ads? Even the simple act of blending the colors, as this blog does, is verging on tricking the user because it's a way of camouflaging the ads against the rest of the page in order to reduce "ad blindness."

If it is tricking users, then why do AdSense publishers do it? Obviously, because they're desperate for those clicks in order to earn money. However, by tricking visitors into clicking on their ads, are they really shooting themselves in the foot?

Optimization as a Harmful Practice

So, if I'm "tricking" my visitors into clicking on my ads, or even just being a tad "crafty" in the way my users perceive my ads (i.e., that they're not necessarily entirely aware they are clicking on an ad), how can that be harming me? I'm getting a click, which earns me money, so surely that's a good thing, isn't it? Here's why I think it may be a harmful practice.

The source of the potential harm is Google's mysterious Smart Pricing, which I discussed in an earlier post and I recommend a read of it.

The principle underpinning Smart Pricing is that "Google's smart pricing feature automatically adjusts the cost of a keyword-targeted content click based on its effectiveness compared to a search click." Also, Google determines "effectiveness" by the likelihood a click will result in a conversion, whether that be a product sale, newsletter signup, site registration, etc.

So, if Google thinks a click on a content ad, i.e. and AdSense ad, is less likely to result in a conversion, it will reduce the amount the advertiser has to pay and, therefore, the amount the Adsense publisher earns.

This is where the harm of tricking is really seen. If users click on AdWords ads that appear on the right hand side of Google's search results, on Google.com, for example, the users are almost certainly aware that they are clicking on an advertisement. However, if they are clicking on an ad on an "optimized" web page, they may not even realize it is an ad and they are almost certainly less consciously aware that it's an ad they're clicking on and, what's more, an ad that is there to produce a particular result (a "conversion") for the advertiser.

In which scenario is the ad click more likely to end up in a conversion, one where the "clicker" is aware it's an ad or one where they're unware? In my opinion, a user who clicks on an ad, fully aware that it is an ad, is far more likely to end up buying from the advertiser, signing up for their newsletter, or whatever the advertiser is seeking.

Therefore, by "tricking" a user into clicking on the ad, the click is less likely to lead to a conversion, which will then result in a greater discount being given to the advertiser as a result of smart pricing, which will then result in a lower income per click for the publisher! So, if you are tricking your users into clicking on those ads, you may well be earning significantly less per click (CPC), even if your click-thru rate (CTR) increases. That decrease in CPC may even outweigh the money earned from the higher CTR. In this case, your "optimization" would actually result in less income, not more!

I've always believed that you need integrity in business and, with Smart Pricing in place, it applies equally to AdSense publishing.

Worth thinking about.

Technorati Tags: adsense, adsense optimization, smart pricing

eCPM, the Evil Twins of AdWords and AdSense

The concept of eCPM continues to confuse both new and experienced AdSense publishers. As I explained in a previous post, for AdSense publishers, eCPM is merely a calcuation based on past performance that indicates how much you are earning per 1,000 page impressions and is calculated using the formula (earnings/impressions) * 1000.

However, to add to the confusion, the abbreviation "eCPM" is also used in the world of AdWords advertising but has both a different formula and a totally different purpose. As the AdWords Help Glossary states:

Effective CPM, or eCPM, is the effective cost per 1000 impressions generated by a cost-per-click ad. eCPM is determined by multiplying a number of factors, including the ad's cost per click (CPC) and its clickthrough rate (CTR). The resulting eCPM can be used to rank CPC ad campaigns against CPM campaigns.

Thus, in the world of AdWords, eCPM is a tool that effectively converts CPC (cost per click) figures into CPM equivalents for the purpose of determining the rank of regular CPC ads as compared to CPM AdWords ads. On the other hand, in the world of AdSense, eCPM is merely a reporting figure whose calculation converts CPC figures into their "effective" CPM equivalents but has no "active" purpose . . . for AdSense, nothing is determined by the value of eCPM but, on the contrary, AdSense's eCPM is determined by other data.

Thus, to summarize, Google uses the abbreviation eCPM in both AdWords and AdSense but in each instance the formula and the purpose is different. They are completely separate from each other and must not be confused one with the other. For AdWords, eCPM converts CPC figures into CPM equivalents, which determine the ranking of AdWords ads. In AdSense, eCPM is merely a passive reporting figure that results from converting historic CPC data into CPM equivalents.

References

AdWords

• eCPM, AdWords Glossary
• How do site-targeted and keyword-targeted ads compete?, AdWords Help Center

AdSense

• Effective CPM, AdSense Help Center
• eCPM -- what exactly is that?, Inside AdSense Blog

Technorati Tags: ecpm, adsense, adwords

Smart Pricing: What It Is and How It Affects AdSense Publishers

I have read so much garbage online, particularly in the official AdSense Help forum, regarding Google's Smart Pricing that I thought it was time to present the real facts about it and how it affects you, as an AdSense publisher.

Before I begin, however, I need to emphasize that I have no special insider information on the topic, and Google haven't exactly been forthcoming with how Smart Pricing really works, so I am basing this post on the information that is available on the Web from official authoritative, and reliable sources.

So, let's begin by listing some of the factors that have been stated as affecting your CPC as a result of Smart Pricing:

• Publisher's location
• Visitor's location
• Web site page rank (i.e. Google pagerank) (high pagerank = move revenue, low pagerank = less revenue)
• Whether the ad is "in 'theme'" with the page it's displayed on
• AdWords advertisers using "untargeted" keywords for their ads
• And so on ... the list is endless.

There also seems to be quite a bit of confusion about what Smart Pricing even is and that it is unfair to AdSense publishers. This latter point illustrates another pet issue of mine, that many AdSense publishers seem to think they have a right to be earning from AdSense and they forget that the money they earn isn't ultimately paid by Google but by regular people like you and me . . . but I've griped about that particular issue elsewhere!

So, what can we learn about Smart Pricing? I shall begin by examining official (i.e. Google) sources.

What Google Says About Smart Pricing

AdSense Help

The first thing to note about Smart Pricing is that you will find no mention of it in AdSense's help pages. This silence, in and of itself, tells you a lot about Smart Pricing, namely, that it isn't really an AdSense issue at all, it just affects AdSense publishers. If you want to find out about it in any Google help pages, you need to look in AdWords help.

AdWords Help

There are two very important pages in AdWords help on this topic that contain key information about Smart Pricing.

First, the page entitled "Can I be charged less than my minimum bid?" states:

With Google's smart pricing, we will automatically adjust the price of a content click. If we find that an ad on a content site is less likely to produce results, we may reduce the cost of your ad below the minimum bid assigned to it.

Second, the page "Do you offer separate pricing for content clicks?" states

Google's smart pricing feature automatically adjusts the cost of a keyword-targeted content click based on its effectiveness compared to a search 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.

So, there are a couple of vitally important gems of information in these paragraphs.

1. The fundamental principle underpinning Smart Pricing is the effectiveness of a "content click" (i.e. a click on an AdSense ad) as compared to a click on the same ad in search results (i.e. a click on Google.com or another site in the Google network).

2. Effectiveness is determined in terms of the advertiser's goals ("conversions").

Note also that Smart Pricing is also based on a fundamental fact/belief that "content clicks" are always less effective than "search clicks."

Thus, Smart Pricing is a means of ensuring that the people who are actually paying the money really get what they're paying for: effective clicks. This also has the effect of encouraging advertisers to use the content network (i.e. AdSense) so, without it, there would be less advertisements for AdSense publishers to display. Thus, even though it may not seem like it, Smart Pricing actually benefits AdSense publishers as a whole too!

Official AdWords Blog ("Inside AdWords")

The Inside AdWords blog reiterates the above points from AdWords Help in various posts.

For example, in the post "A fireside chat on content targeting" the author stated "Smart Pricing automatically discounts the amount you pay for the clicks received from content sites based on the likelihood that the click will convert."

Official AdSense Blog ("Inside AdSense")

Towards the end of October, 2006 Google published a pretty informative post on this blog with the intent of clearing up some common misconceptions regarding Smart Pricing. The post contained two key sections:

First,

Many factors determine the price of an ad . . . [m]ore than conversion rate goes into determining the price of an ad: the advertiser's bid, the quality of the ad, the other ads competing for the space, the start or end of an ad campaign, and other advertiser fluctuations.

Second,

our system for calculating advertiser pricing gets updated regularly.

I find it interesting that all of the factors that Google lists, with the exception of CTR, are advertiser related: bids, ad quality, etc. In fact, the only factor listed that is still vague enough to be open to wide interpretation is the last one, "other advertiser fluctuations." It's also important to note that the Smart Pricing algorithm "gets updated regularly" so what isn't a factor today, may be a factor tomorrow, and vice versa.

Google AdWords News Archive

In the April 2004 issue, in a section entitled "How Smart Pricing Works," you can read the following:

We take into account many factors such as what keywords or concepts triggered the ad, as well as the type of site on which the ad was served. For example, a click on an ad for digital cameras on a web page about photography tips may be worth less than a click on the same ad appearing next to a review of digital cameras. (Emphasis not in original).

Thus, we can add a couple of additional factors to our official list:

• The keywords or concepts that triggered the ad
• The type of site on which the ad was served

Other Authoritative and Reliable Sources of Information on Smart Pricing

JenSense Blog

In my opinion, the single most authoritative source of information regarding Smart Pricing outside of official Google sources is the post "One poorly converting site can 'smart price' an entire AdSense account" by Jennifer Clegg in her well-known JenSense blog.

In this post, Jennifer shares some information received by a former AdSense publisher that was, probably inadvertently, supplied by an AdSense Support staff member. The key points that Jennifer listed that are not mentioned in official sources are:

• Smart pricing affects your entire AdSense account—it doesn't operate 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 on a weekly basis.
• Smart pricing is tracked with a 30 day cookie.
• Conversions for smart pricing publisher accounts are tracked by those advertisers who have opted into AdWords Conversion Tracking

By far the most significant thing here is the fact that Smart Pricing operates on your entire account. Thus, as Jennifer stated, if you have one low-performing site in your account, it can affect the return from well-performing sites. That certainly warrants some serious evaluation of your sites, if you operate more than one.

I also think the fact that Smart Pricing is evaluated weekly is significant in terms of debunking a common misconception about Smart Pricing. Smart Pricing is often cited as the reason that AdSense earnings, per click, sometimes vary significantly from day-to-day. However, if Smart Pricing is evaluated weekly, it cannot possibly affect daily fluctuations, except for the days before and after the weekly evaluation!

Finally, the fact Smart Pricing is tracked using a 30 day cookie means that your current Smart Pricing may be determined by events that happened up to 29 days ago, even though Smart Pricing itself is evaluated weekly.

Conclusion

1. Develop a site that is both valuable and whose content is well-targeted to your audience. This is more likely to lead to meaninful clicks that will result in conversions.

2. Continue to build traffic to your site—if you are going to receive less income per click, you will need to make up the difference by getting more clicks.

3. If you have multiple sites, you may be better off removing AdSense entirely from poor-performing sites. However, as Jennifer Clegg pointed out, Google doesn't really provide you with the necessary information to make such a determination.

4. Smart Pricing is a fair system for the advertiser and also ultimately benefits the AdSense publisher because, without it, more advertisers would opt out of the content network (i.e. AdSense) entirely and then where would you be?

It is my hope that this post will help dispel some of the myths and superstitions surrounding Smart Pricing and will generally provide you with a deeper understanding of both its purpose and how it works. Official Google sources have listed several factors that determine how Smart Pricing will affect you but the key principle is that of conversions for the advertiser.

Technorati Tags: adsense, smart pricing