Google Adsense and Adwords Smart Pricing

Have you noticed that Google Adsense and Adwords advertising program varies cost per click depending on several variables, aptly called Smart Pricing.

Google Adwords help center describes how smart pricing works -

“Google’s smart pricing feature automatically adjusts the cost of a keyword-targeted content 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. With no extra effort for you, Google technology helps ensure you get strong ROI from your AdWords advertising, wherever your ads appear.”

This implies that Google may reduce the cost for a click if that better reflects the value it brings to advertisers. So a similar click on the same ad may earn you a considerably different amount depending on your site.

Jensense has another scoop when one support team member disclosed more details than perhaps he or she should have.

“Here is what that team member disclosed, as well as other tidbits already known about smart pricing.

• Smart pricing affects an entire account. It is not 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 each week. So removing ads from sites you suspect are converting poorly could result in seeing an adjustment to a higher smart pricing percent in as little as a week.
• Smart pricing is tracked with a 30 day cookie, so you could be rewarded for new conversions that saw the initial click from your site up to 29 days earlier.
• Image ads are also affected by smart pricing.
• With smart pricing, an advertiser could end up paying less than their minimum bid, which would theoretically include the minimum bid price available, meaning publishers earn less for even the minimum valued clicks.
• Conversions for smart pricing publisher accounts are tracked by those advertisers who have opted into AdWords Conversion Tracking“

So, should you be removing Google AdSense from sites they suspect are converting poorly, in order to increase their smart pricing percentage?