Adsense Smart Pricing is Bad but How to Avoid It?

The first thing you should know before blogging for money is the Adsense smart-pricing. It's a technique to improve value to advertisers by reducing the price they pay per adclick, ultimately reducing the pay publishers get per adclick. If you are in the categories whose blogs are smart-priced, then you'll be earning much less than what you were supposed to if you're not smart-priced. This article explains what smart-pricing is, what factors affect blogs to be smart-priced, and how to avoid being smart-priced. This guide is a summary based on Google facts and best tips on smart-pricing from top blogs.

What is Smart Pricing from Google standpoint?
Smart pricing was intoduced in April 2004 to improve advertisers Return On Investment (ROI) by adjusting the price of certain clicks. Here are some facts and implications on smart pricing based on the Goggle AdWords announcement:

Prices per click for advertisers are adjusted based on Google network's data of click conversion to advertisers' business actions (e.g. sales, registration, etc).

Cost-per-click (CPC) is reduced if that action improves value to advertisers.

Ad price estimation is affected by many factors such as keywords and types of blogs. For example, an adclick on videocam placed on a general photography tips blog may cost less than a click on the same ad placed next to specs and reviews on videocam.

The estimation of click values is done continuously and on an ongoing basis that ultimately saves advertisers time and money.

Advertisers get greater value and performance as the ad costs are appropriately set based on the quality and relevancy of information provided by sites/blogs to their customers.

Google explained further in its official Adsense blog about the facts on smart pricing as there are some misconceptions to how it's being implemented:

Ad prices are determined based on many factors: advertisers bid, quality of ad, other competing ads, ad campaign time period, and advertisers' conversion rate.

Click-through-rate (CTR) doesn't affect advertisers' ROI. Smart pricing is introduced to benefit advertisers, and the only thing that matters is the percentage of click conversion to ROI. Publishers' CTR has nothing to do with advertisers' ROI. What matters is clicks that bring in highly relevant customers that result in business actions.

Advertisers gain more from sites that bring in quality clicks (due to readers interest in their quality and relevant content). Generic clicks do not convert much to value for the advertisers. To gain most from Adsense, publishers should improve content quality, bring in targeted traffic, and improves the relevancy of content to ads.

The system of determining ad prices is updated regularly to improve the value to advertisers.

How Smart Pricing Affects Bloggers/Publishers?
Many bloggers have had some experiences on Adsense smart-pricing that affect the type of niche they choose and how they blog. Some of these experiences weren't highlighted by Google's guides. In essence, bloggers need to be aware of smart pricing and careful when first finding a niche to blog about if they want to gain the most from Adsense. I have compiled the most important 'facts' about Adsense smart-pricing based on these experiences around the blogosphere:

Reduced earning - Smart price means that the earning per click is reduced if your blog is being smart-priced. For example, you might earn $0.05 per click on an ad that could actually bring you $0.50 if you're not smart-priced. It also means that the advertisers pay less per click on ads these ads than the actual bidding price.

Affects entire account - Smart-pricing affects the entire Adsense account. If you have multiple blogs and only one of them is actually being smart-priced because it brings in low conversion rate to advertisers, then all the other blogs under the same Adsense account will be affected also eventhough these other ones converts well.

Won't know if you're being smart priced - You won't know which sites are being smart-priced and which are not, and you don't have any data to make any correct guess. What you can do to know whether your blog is being smart priced is by observing its performance or make educated guesses based on your earning per click or CTR.

Smart-pricing can be reversed - If your account is affected, remove Adsense ads from sites that you think are actually being smart-priced to avoid being smart-priced on sites that convert well.

Updated on weekly basis - Smart pricing is evaluated on a weekly basis. Changes are likely to occur the week after you've made any changes that affect smart-pricing.

Setup additional account - Some bloggers have set up additional Adsense account to serve different sites so that well-converting sites are not affected by smart pricing. But this requires approval from Google and actually difficult to get. Publishers need to provide additional company details or have different names for different accounts.

Does CTR Affect Smart Pricing?
Some bloggers say that blogs with low CTR will be smart-priced. This is contradictory to Google's statement. But many have experienced that the earnings per click is less when they have lower CTR, which then forced them to delete Adsense from these accounts so that it won't affects other blogs that do well on CTR. Courtney gave a tip that blogs with CTR less than 3% should not put Adsense to avoid getting smart-priced on the entire accounts.

Although Google says that CTR doesn't affect smart pricing, it can affect smart pricing indirectly. Blogs that have low CTR most likely are serving ads poorly targeted to the content. Some readers that do click on these ads tend to not be interested by the services/products offered on the advertiser sites as they're not targeted to the readers interest. So, in a way, low CTR blogs do seem to be smart-priced because of their poorly targeted ads. Accidental clicks on poorly targeted ads also convert to low CTR.

Traffic from social networks are well known to convert to low CTR compared to traffic from search engines. Visitors from social networks come across blogs/posts because of their reputation or popularity, not entirely because they are searching for them. They are not likely to click on ads. On the other hand, visitors from search engines come across blogs/posts because they are searching for those targeted contents and are likely to click on targeted ads to know more about those products/services that interest them.

Blogs about blogging (e.g. making money using blogs, blog tips) typically also convert to low CTR as bloggers are more familiar with the concept of contextual advertising and aren't likely to click on ads (hint: think about your tendency of clicking ads on blogs about blogging). This is not to say that these blogs will automatically be smart-priced, but many bloggers blogging on these topics do experience a huge drop on CTR and earnings per click compared to blogs on other niche topics. The key is about bringing quality customers that convert to advertisers business. If your blogs do provide high quality content and do bring in quality customers that improve advertisers' ROI, then there's no good reason for your blog to be smart-priced.

Tips To Avoid Being Smart-Priced
These are tips that have been compiled from many top blogs on the topics of smart pricing:

Create highly targeted content to search engine traffic.

Improves blog with highly targeted content and high quality articles that draw more interest to visitors on products/services being discussed or reviewed.

Improves Adsense design and placement to improves CTR.

Avoid blogging about blogs to avoid audience that don't tend to click ads (i.e. don't target us!).

Avoid building contents with the intention of targeting only social networks.

Delete Adsense on blogs that are being smart-priced, have low CTR (less than 3%), or generate low earnings per click (around $0.10 or less).

If possible (but extremely difficult), ask permission to create multiple Adsense accounts - one for blogs that convert well, and another for blogs that you suspect are being smart-priced.

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This post is a summary based on Google announcement and tips on smart pricing from top blogs. The post length is 1342 words.

Making Money Efficiently from Blogs

The chance is that you know about Adsense and how to make money from it using your blog. If you haven't heard about it, well, you can generate money from your blog and the most popular way of doing that is using the Google Adsense Program. In fact, successful bloggers earn more than $100,000 per year from their blogs.


In this blog I've posted some articles to guide you generate money from blogs. Most of the tips come from extremely long articles of successful bloggers that I've compressed to make the readings much much shorter for you. Trust me, if you have no idea about monetizing blogs, learning to do it from the basics can take a really long time. Having short articles that compresses all the important points can help you a lot, because you don't want to spend too much time on learning how to do it. There are 3 basic questions you should be asking yourself when learning to build a monetizing blog:

How to get more visitors to your blog?

What's the best programs to monetize your blog?

How to optimize your blog and ad designs to maximize your earning?

If you're a first timer on this, I'll give you some quick pointers on what are some of the major things you should know if you want to successfully monetize your blog. It can hurt you a lot if you don't know these things (hurt = cost you time and energy with little in return). This list isn't the most comprehensive ones on the subject, but will give you the big picture on what to learn.

Adsense - Know Adsense and learn how to optimize its use in your blog. Using Adsense isn't just about putting the codes in your blog. There are tips on how to maximize your earnings by optimizing you Adsense placement, colors, and overall design.

SEO - Learn Search Engine Optimization (SEO). This is needed to help you get your blog to rank high on search engines, e.g. Google. In other words, you'd want your blog to be in the first page of Google search result when somebody googles keywords related to your blog.

Keyword Research and Niche - Think carefully on what niche area you want to blog about and what keywords are the best for your blog URL, titles, descriptions, and post titles. Simply using www.yourname.com as a URL will put you at a huge disadvantage at getting rank well, unless your name is Paris Hilton, which gets search the most (to learn from what she has to say about life, I guess).

Blog Promotion - Money only comes in when there are visitors to your blog, thousands of them. How to get them to your blog isn't easy. You have to learn how to promote your blog.

Monetizing Programs - Bloggers out there don't just use Adsense. There are tons of other programs, affiliates, and sponsorships. The trick is to know which is the best for you and how to optimize their use in your blog.

Quality Blog Content - Anybody can write anything on their blogs. But what articles attract the most readers? Blogging isn't just about posting articles. You have to learn the tips and tricks to get others read what you write.

What NOT to do - There are things that if you do will hurt your monetizing effort. For example, if you have Adsense put in blogs that are 'smart-priced' by Adsense, you'll earn very little. Read also the Adsense Terms and Conditions so that you don't do anything that'll get you banned from the program. 'Smart-pricing' is explained below.

Social Media - One way of promoting your blog is through networking inside social media networks, such as Digg.com, StumbleUpon.com, etc. There are tricks to get the most out of them.

Getting Visitor Traffic - How to bring visitors to your blog? And how to get more and more of them, over time? There are many ways to get people to your blog - social media, search engines, word-of-mouth, recommendations. The more you know about this the better.

RSS Subscribers - People will subscribe to your blog if you have good contents, which means you'll get more readers, more visitors, and most importantly more exposure. Are there tips out there how to increase the number of subscribers? Yes, there are (read some of the articles below).

Bloggers Tribe

The idea behind Bloggers-Tribe is to describe a relatively computer ileterate's journey and effort to try and make money from blogging.

I will try and share each step of my journey towards making money from nothing.

If I can do it you can too. I will try and read as many of the experts blogs as possible, put into practice what they advise and then share what I find works here on Blog Addick.

The questions I am asking myself are:

Can you make money blogging online?
What are the different ways to make money through a blog?
How do you generate traffic through the blog?
I will update and add to these questions as I come face-to-face with more.