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Use AdSense Sparingly to Avoid Smart Pricing

October 10, 2008 Posted under: Making Money Online by Caroline Middlebrook

AdSense is perhaps one of the easiest ways to monetize a website but that doesn’t mean that you should just use it willy-nilly. Judging by the number of emails I get telling me that I should be using it on my blogs, or in my RSS feeds or whatever, it seems clear that most people feel that you should just slap AdSense ads up everywhere.

Every Little Helps Doesn’t It?

The general theory seems to be that every little helps and therefore even if the ads aren’t clicked on all that much, surely every click is worth having? If AdSense can bring in a few extra bucks a month then you’d be stupid not to use it right? Well not quite, here are a few reasons why you should be sparing with your AdSense placement:

AdSense Takes Traffic Away

Some sites are built with the primary intention of getting AdSense revenue but not all of them. This blog is not one of those sites. However when somebody clicks your ad they click away from your site so that is a click that could have been directed elsewhere. On this blog, I advertise my own products so I would much rather get a click to my Traffic Rush course, my WordPress ebook, my RSS feed and so on, than earn a few cents from an AdSense click. Most people do not click back after they have clicked an ad!

Some Audiences Dislike AdSense

This is a problem that only affects a relatively small number of sites. Not all internet users are the same. I’m betting that you, as a reader of my blog, are pretty internet savvy, I imagine you have heard of social media sites like StumbleUpon, Facebook etc. I’m sure you know what an ad looks like and I’d bet quite a lot of money that you would very rarely click on an AdSense ad!

Now of course the only way to know for sure if AdSense is suitable for your site is to test it, but here’s a good metric to use: search engine traffic tends to respond well to AdSense, and social media traffic does not. If more than 50% of your traffic is social and not from search engines then you might struggle with AdSense.

The Big One – SMART PRICING

At this point you might still be thinking, so what? But here is something that many people don’t understand. AdSense allows you to very easily put ad units up on multiple websites but it tracks your performance across your entire account and it can apply penalties as a result. If one or more of your sites suffers from a particularly low click through rate (I’m not sure the exact number but get worried if you’re generating less than 3%), then your account will be smart priced and what this means is that you will only earn a fraction of the amount that you think you should.

I am pretty sure my account is smart priced right now. None of my clicks are very high, and even in a very high paying niche I only got $0.39 for a click that I would have expected to generate at least $1.00.

So if you just slap up AdSense on sites that don’t respond well then you will drag down your CTR which affects your whole account – the sites that were doing well will suddenly start making less money.

How to Avoid Smart Pricing

If you are smart priced then the only way out of it is to remove AdSense from the sites that have a very low CTR. Now recently I started to add custom URL channels to my AdSense account so that I could track all my performance on a per-site basis but I kept finding that the impressions and clicks that were being reported were less than the total number. In other words, I had AdSense running on some site that I had forgotten about!

Eventually I tracked down the rogue URL – it was a hubpage! Back in the 2007 Thirty Day Challenge, I set up some hub pages and back then I knew nothing about how AdSense worked so I just signed up for their revenue sharing scheme. I started to track the url and sure enough it was generating impressions (the hub still gets traffic now) but the CTR was appaling so I removed it from the page.

I still have work to do because some of the niche sites I have setup are also performing badly. However, some of them have such little traffic right now that its difficult to accurately depict the CTR because just one click can cause it to vary greatly. Therefore my new approach is not to put AdSense on a site until it starts to generate a reasonably steady stream of traffic – around 25 visitors a day. That should be enough to track the clicks more accurately.


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24 Comments:

GuyH
October 10, 2008

Hello Caroline , maybe it is good to know that Google allows you to “open Adsense in a new window” !!! In order to setup you need to use “Google Ad manager” , it is still in Beta. I tried it out but for the moment it is not working correctly. Dont know what I’ve been doing wrong.
But another plus from this “Google Ad manager” is that one can use it as a tool to sell your advertising space. But as far as I am concerned the “open Adsense in a new window” is worth to follow up, and it is allowed by Google!

GuyHs last blog post..A superb shop for original concert posters and much more

Nathan
October 10, 2008

Interesting, I never really understood much about smart pricing. In fact, I’d nearly given up on Adsense until I tried some new strategies. I’ll have to check into my low CTR sites and see if that helps. I have noticed an increase in click payouts on one of my niche sites, but it isn’t anything great. Maybe my smaller sites are dragging me down.

Nathans last blog post..Why Do I Blog?

Clog Money
October 10, 2008

I have never heard of smart pricing before! 3% seems to be quite high CTR as well. Also if this is true then what is Google doing with the money they should be passing on to you? Are the advertisers paying less money for the click?

Doesn’t seem to add up to me!

Clog Moneys last blog post..A series of fortunate events.

Mike Collins
October 11, 2008

I hardly use AdSense at all…I agree with you that there are usually far more profitable things to do with your traffic.

Mike Collinss last blog post..Free vs Paid Website Hosting

cyza
October 11, 2008

Thanks for this. I’m still very naive with Adsense. I never knew about smart pricing before. I have 3 niche sites which are giving me good click value. However, recently, the dollar per click are surprisingly low and sometimes they are high. Maybe smart pricing could be the reason. i need to check back all my sites which have adsense inside them. Need to get a steady traffic before incorporating adsense into them. Normally, as soon as i set up a site, i’ll put adsense….

Is there any intensive tutorial on adsense, and something about smart pricing and other things that me and other people don’t know…?

If there is then it will be a great help.

Caroline Middlebrook
October 11, 2008

@GuyH, that is certainly worth looking into but I doubt it is going to help battle the smart pricing problem.

@Clog, the way it works is that Google will pay the highest commissions to those sites that generate the highest CTR. In turn it also puts the highest converting ads on the best sites but it also charges the advertiser highly for those ads. Going the other way, the poorer performing sites get the poorer performing ads and those generally don’t cost as much to the advertiser. Its a good system really because the advertiser pays highly for well converting ads placed on well converting sites and the publisher gets well paid as well.

@Cyza, don’t look at inidividual clicks as these will vary – check the average over time. Different ads produce different click values so the odd click here and there is not enough of an indicator that something has changed with your account. I don’t know of any reliable AdSense tutorials, most of the mainstream ones (such as Joel Comm’s) are heavily criticised by those that actually make money with it.

Colin
October 11, 2008

Do you know if you get put in and out of Smartpricing? I only get Adsense revenue when interesting adverts are appearing on my site. I get nothing most of the time. But I have noticed that I seem to have periods when I get about 15 cents per click and periods when I get about a dollar. I find it hard to believe that there is that much variation in the value of the clicks to the advertiser in my niche.

Carrie
October 11, 2008

It is unfortunate the Google doesn’t allow you to segregate your account by site so that one bad site can’t pull down your whole account. Even from Google’s point of view, that would make more sense.

Beth
October 11, 2008

Nothing original to write anymore I guess. This has been discussed in length on thousands of blogs for many many months prior to this.

All you do Caroline is read other blogs and regurgitate what you read. Just another “how to make money” blog by someone who isnt making much money. How in the world can you be writing anything about adsence when you make $23.00 a month from it? Time to reevaluate where you are taking this blog because it is surely not to new hights.

Ok, start bashing me now

sven
October 11, 2008

Interesting, I would love to know how this whole google sheme works, I mean it’s obvious that when you pick a niche where people pay up to 5$ per click or something and you yourself offer just 2$ you have to be at other places than the guys paying 5$, or am I mistaken? That would be adwords, but adsense and adwords connected so I would be interested how this actually works.

Richard Farrar
October 11, 2008

I hadn’t really made the connection between Adsense and search traffic, but a very useful point and very logical now you mention it. A useful rule of thumb.

Richard Farrars last blog post..Which is the Best Video Connector?

Sarain
October 11, 2008

Beth – Not bashing you really, and I’m not some blinded Caroline fan (This is my first comment), yet it seems illogical for her to make posts on ‘old’ topics.

Just because you are aware of this, doesn’t mean the rest of us are. Supposing I had only recently started online, this might in fact be the first I heard of it.. as I wouldn’t necessarily have had read a blog post (like you) that was posted “many many months prior to this.”

Paunchiness
October 11, 2008

I don’t think its the hard core bloggers that are clicking on adsense. I never really click on them even in my google searches. But I do know a lot of people who do.

I also agree that overdoing it with the adsense is annoying. I hate the sites that put them right under the post title or anywhere that requires scrolling directly past them to get to the content. Sure put it in there but not in a way that takes up the whole page.

Paunchinesss last blog post..Fall in love again

Franklin Bishop
October 11, 2008

I think it is smart that you do not use ads sense on this blog. Like you said, you might as well have people click to your own products so you can make money off of them possibly. I think blogs like yours are more into having a sticky blog then people leaving your blog. You want people to stay as long as possible so that you can possibly turn them into a religious reader or subscribers.

Franklin Bishops last blog post..Private Ads Part 4: How to Make Your Blog Attractive to Advertisers

Clog Money
October 11, 2008

@Caroline: That makes a lot more sense! Thank you ;0

Clog Moneys last blog post..Last ditch attempt with facebook.

Mike Huang
October 12, 2008

I heard about this “Smart Pricing” technique that Google uses just a month ago, but none of us really knows if it’s true or not. A lot of conclusions come from assumptions just like how StumbleUpon’s traffic is. Until they show that it is in fact true, we really don’t know what they do. lol. I also get low CTRs for my sites, but for some reason, I got $4 this one particular day. It’s just confusing at times.

-Mike

Caroline Middlebrook
October 13, 2008

@Colin, I don’t know how often the smart pricing algorithm is run but from what I understand from other people, it’s pretty quick. Since writing this post, I took my ads off all my sites that were performing poorly and yesterday I got a click for over $1.00 on a crappy site that only usually gets $0.20 clicks so thats encouraging.

@Carrie, well I can see their reasons. If they allowed people to do that it would encourage people to have spammy sites with no concern for relevancy.

@Beth, as I said in my last response to a similar comment from you, the content of this blog is the relaying of my own personal experiences with what I do online. I’ll often do things that have been done many times before, and I’m sure I’ll have similar experiences to others that have done the same thing before but that’s all you’re ever going to see on this blog as this is its purpose. In case you hadn’t noticed, this blog is not entitled “Adsense Secrets blog”, it’s called “Caroline Middlebrook” so if you are not interested in hearing about my own personal experiences which you are obviously not, you will continue to be frustrated with my content.

@Sven, the relationship between adwords and adsense is that AdWords is what the people buying the ads use, and AdSense is what people displaying the ads on their sites use. Google runs both systems and takes an undisclosed slice of the money on both sides.

@Franklin, yeah blogs like mine simply don’t do well with AdSense. Makes a change to find somebody who agrees with me on that point!

@Mike, oh its real. It is there to prevent spam sites. There are some people who run automated systems for creating thousands of sites using purely scraped content and have adsense plastered all over it. The advertisers do not get a good response so Google smart prices those accounts to discourage the practice and try to encourage people to place relevant content that will result in better CTR’s for both the publisher and the advertiser.

Cath Lawson
October 14, 2008

Hi Caroline – Thanks for the heads up. The rate I’ve been getting from Adsense over the last few days right across my account is pitiful. It sounds like I’m being smart priced too.

Sometimes I feel like removing the whole lot and replacing it with anything. I’m betting dogfood, or something else completely unrelated to my sites would make me more cash than Adsense right now.

Cath Lawsons last blog post..Be A Business Success Story, No Matter What Your Age

Caroline Middlebrook
October 14, 2008

@Cath, try removing it from one site at a time, starting with the one that shows the lowest CTR over say the last 7 days and see what happens to the remaining ones. If it still doesn’t improve then it may be time to look at other things that could be affecting it.

Tracey
October 21, 2008

Good information here in a nutshell. I had heard of Smart Pricing but had not yet done the research. My CTR is about 6% overall so I think I’m in a good zone, but I sure would have been mad to see my revenues fall as I add more blogs.

I wanted to make one comment about Hubpages. You did the right thing in your case. On the other hand, I have Hubs that do make some money and have decent CTR with targeted keywords. Because Hubpages does keep a portion of the Adsense income, this is not a primary income strategy, but if you are doing them anyway, they can help–one would have to judge their own. And it’s not a bad start for complete newbies. My two cents.

Traceys last blog post..Look at Natural Remedies for Morning Sickness

Joan
October 24, 2008

I never knew about Smart Pricing, but it makes sense. Relevancy is everything to Google, and they’re trying to weed out the slapped-up Adsense sites, I guess.

I don’t use Adsense on my blog. I just didn’t think it was worth it, especially when I’m trying to build my credibility as a straight-shooter.

Great post, with lots of valuable information. Thanks!

Joans last blog post..Use This Method to Calculate Clickbank Affiliate Revenue

Brad
October 25, 2008

HAHAHA!
You have No idea what you just said do you???

Why dont you learn how to use adsense before you start giving advice!!!

Your just a wannabe!

Puja Roy
March 12, 2009

Thanks a lot Caroline!!!

I doubt my account has been smart priced and to remove smart pricing from my account, I am going to follow your second last line in this post, and that is..

“Therefore my new approach is not to put AdSense on a site until it starts to generate a reasonably steady stream of traffic – around 25 visitors a day”.

Hope this works for me. Feel free to visit my blog Miss Techs if you have some spare time and suggest me something.

Puja Roys last blog post..Nokia launches three music phones- 5730, 5330 and 5030

Karen Schouest
June 15, 2009

Caroline –

This post was obviously started many months ago, and I see the conversation has long died, but I could not help but respond to it, for what it’s worth, and specifically, to Beth’s comment about you regurgitating old news because you have run out of things to say.

Everyone is entitled to their opinion, of course, and thank goodness for the Internet that we all have the freedom to express ourselves. One has to assume that Beth is perhaps so savvy about blogging that she knows all there is, or she has read so many “how-to” blogging articles that there is simply nothing left for her to learn, and she assumes we’re all in the same boat. Good for her. I wish I could say the same for me!

But I am not Beth. I consider myself to be VERY savvy when it comes to many aspects of my personal and daily life. I’m proud of the skills I do have, and always seeking to improve them.

But a wizard at one thing (or even a few things) doesn’t mean you automatically know all there is to know about all things technical. I’m a data kinda gal – I can manipulate data in ways you never could imagine, extracting it and rearranging it to tell you things you didn’t even know you could ask of it. I can help anyone do things faster. But don’t ask me to make it look pretty.

I hate graphics, and I hate anything having to do with designing something in a graphics-based format. I also hate anything to do with Web design. It’s just not my cup of tea. And my brain knows I hate it, so it tries to block me in every way it can to hinder my learning efforts when I am confronted with graphics-based and/or Web-based applications.

Doing my own website was traumatic enough. It took me six years to get the courage to do it, and I did it all in one day, and haven’t touched it since – that was three years ago. I don’t want to go back there!

Now, after many years of pondering about it, I am finally ready to take the plunge and create a blog. In fact, I NEED to create a blog. RIGHT NOW. YESTERDAY. So a few weeks ago, I started casually searching around in my spare time, trying to get a feel for where to start and how to get it all done.

After weeks of Googling and reading, I am exhausted and exasperated. I know a lot more than I did before I started, but I’m also more confused than when I started, and no more ready to launch my blog today than I was three weeks ago, before doing the first Google search.

There are many questions I still need answers to, and they fall into several different categories. But one of the first questions I needed to tackle was how to physically get the whole thing going, from the design point of things, and how to arrange it. The blog lingo was completely foreign to me.

I found lots of sites that offered to sell ebooks with tutorials on how to make money blogging, or how to get started with blogging, and a scattering of articles. But I didn’t want to have to pay money just to get off the ground. I figured I would investigate ways to fine-tune it after I got it set up, and if I found a book that I felt would address that, then I would buy it. But not just to post the first thing!

I also found lots of great forums where you can post questions about blogging. But I have so MANY questions, I would be posting for a week just to get them all answered, and that is a lot of conversational material to keep up with at a time when I’m very busy. I feared I would leave all the people who might generously jump in to help me hanging, waiting for a response. Or it might trigger even more questions.

Then I stumbled upon Caroline’s site. After spending time that I didn’t really have watching her videos on YouTube, I now feel I at least have a grasp of the technical design aspect of setting up my blog, so that’s one major thing I have accomplished that I thought would take me at least another week.

And I’ve also benefited from all of the articles and discussion on the site about many other aspects of blogging that Caroline has covered that I wasn’t even remotely aware of but I realize now are very important.

Yes, there are a bazillion sites that cover blogging how-to’s out there, and many of them are selling books that promise to help you set up a blog and/or making money from it. Perhaps if I had stumbled upon one of them, and they were equally informative, I would be singing their praises at this moment, and that is fine. It’s a big world, and there is plenty of room for everyone to hang out their shingle, and if they’re all selling the same mouse trap, so be it. There are plenty of buyers to go around!

I don’t really care if Caroline’s information is regurgitated, as Beth claims it is, although I don’t get the feel that it is regurgitated at all. But perhaps Beth feels like it is simply because so many other people are saying the same thing, and there are only so many ways to say it. So be it.

It’s the one that was at the top of the hit list when I searched. I stopped, looked around, and found it was what I needed.
Other links that I clicked on when searching for blogging help were focused more on the “making money” aspect of it, or selling their ebooks. I was desperate to get help with the mechanics of setting up the blog and had given up on finding a “one stop shopping” site for that purpose.

I was actually searching for “using AdSense with WordPress” when I stumbled upon Caroline’s blog, not in an effort to find help with the design elements, but because I am totally confused about WordPress and AdSense and how they relate (or don’t).

But I struck a gold mine when I found Caroline, because although her blog doesn’t actually answer that question for me, it actually answers all of my other questions about design elements quite nicely, all in one place, and free of charge.

Google (and other search engines) are quite mysterious as far as how they decide what a person should see in a given moment after doing a search. There might be a hundred people, even thousands, doing what Caroline does, saying the same things. If they’re all as helpful as Caroline, I wish them all the best in getting their fair share of the pie in terms of audience.

Saying that Caroline shouldn’t post her articles or sell her books because they’re redundant is akin to saying that no one should make and offer another browser or spreadsheet package or word processor or operating system, because Microsoft has already done that. We’ve seen how the public reacted to that.

Keep up the good work, Caroline. I’m glad I found you!

Karen


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