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Smart Priced AdSense Google

Updated on July 18, 2010

Smart Pricing and Google AdSense

For all of the mystique surrounding Google the entire well being of the company comes down to one thing, selling ads. While Google's search engine dominates the market with millions of searches every day, the fact is that there are just not enough search results served each day to generate the amount of income that Google is used to. In order to really make money, Google needs to sell ads on the Google Content Network.

The Google Content Network is the official name for the millions of websites tha,t while completely unaffiliated with Google, show ads for the company by way of inserting a piece of code on their websites. In other words, all of the websites around the world that try and make income by showing Google Ads through the AdSense program make up Google's content network.

However, since these sites are not affiliated or controlled by Google, the quality of these sites and they desirability to advertisers varies greatly. In order to help assuage the fears of advertisers that they will end up paying for ads placed on sites that are not good ones for their business, Google offers a discount to advertisers whose ad clicks do not result in a reasonable number of "conversions." 

Google calls this discount Smart Pricing.

Website Owners and Smart Pricing

The owners of websites are referred to as publishers by Google. Publishers generate the content that creates traffic that advertisers want to harness. However, not all content is created equal and the dirty secret of Google's business is that its search engine is not as infallible as everyone likes to pretend and many publishers choose to exploit this fact to drive traffic to websites that are filled with bogus or otherwise unsuitable content all for the purpose of displaying the very advertising that Google sells.

When this happens, advertisers might get plenty of "clicks" on their ads, but those clicks are worthless because the traffic the advertisers receive is not only not likely to buy or otherwise engage the advertiser after clicking, but may actually be hostile after feeling that they have been tricked or misled.

The natural response from advertisers would be to not buy any advertisements on non-Google controlled sites, or to insist on manually approving each and every site and placement their site receives. This would obviously be bad news for Google's revenues.

Instead, Google smart-prices these websites by lowering the amount paid per click for ads shown on the publisher's websites. Smart pricing affects all of a publishers websites, not just the one generating the less than optimal clicks. This means that the publisher gets paid less per click and therefore has their income from their sites reduced as well.

Obviously, this causes concern among publishers. However, Google offers publishers no information about Smart Pricing nor will it inform website owners that they have been smart priced. In fact, the entire AdSense informational area on Google's website is devoid of any mention of smart pricing. In order to see any information about it, one must view information from the advertiser's program known as AdWords.

Unfortunately, even good publishers can be smart priced if they are not careful. Unscrupulous advertisers are just as common as unscrupulous publishers. An ad placed on the Google content network might lead to a badly designed landing page or may even be redirected to another page altogether. This can lead to a very low number of conversions which can cause all of the publisher's sites to be penalized by smart pricing.

Publishers must be vigilant in monitoring the amount of earnings generated and what rate their Cost Per Click or CPC typically brings from their sites. Banning low performing advertisers with Competitive Ad Filter is most webmaster's only protection against spammy or otherwise undesirable Google Ads places on their website.

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    • Rudra profile image

      Rudra 7 years ago

      Smart pricing is killing adsense.

    • catherine74 profile image

      catherine74 7 years ago from London

      Interesting take on the whole smart pricing thing. Thanks

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