Use AdSense Sparingly to Avoid Smart Pricing
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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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!
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