SmartPricing Optimization - 5 Tips to Maximize AdSense Revenues

SmartPricing is an algorithm (part man, part machine) used by the major search engines, to determine how much your site is "worth" in the content-network as far as per-click-compensation.

In a nutshell, if your site converts well for advertisers, you will earn the maximum per-click compensation. If on the other hand, AdSense clicks from your site don't convert into paying customers, you will be penalized (a.k.a "SmartPriced"), advertisers will receive a discount on your clicks and your contextual ad revenues will drop significantly.

On my recent visit to the GooglePlex, as part of Google Dance 2007, I had the opportunity to sit down with Google Engineers and ask some very specific questions about how SmartPricing really works.



While I cannot reveal all the specifics I've learned as part of these discussions, I'm happy to summarize our talks into 5 concise tips on how to maximize contextual ad revenues and avoid ever being "SmartPriced":

#1. Your Content should pre-sell for advertisers

Probably the most powerful tip and most often ignored. Slapping AdSense code on content that talks negatively about a certain product or simply doesn't properly pre-sell, is a sure recipe for low conversion rates.

Imagine you have a page that talks about how the iPhone sucks, its battery life is short and overall its a lowsy product. Google's AdSense will pick-up the iPhone from your text and display iPhone related product ads. Even if visitors click on those ads, how likely are they to convert after reading your page?

Always think pre-selling for advertisers.

#2. Keyword Density and Semantically related keywords are your friends

Google's AdSense picks up keywords from your text and attempts to automatically display the most relevant ads based on your content.

It typically does a great job at that. But if you're looking at your page and Google AdSense displays irrelevant ads that have very little to do with your page, consider revising your content by injecting more semantically related keywords to the particular product / service / niche you are writing about.

#3. The more Channels the better

If your site contains several sections, implement different channels per each one of those sections.

This helps Google to monitor CTR, eCPM and Conversions on a per-channel level, so that if one channel doesn't perform well, it will not impact your entire account.

On that same note, if certain pages of your site perform poorly with AdSense, consider switching those individual pages to Yahoo Content Network, so that their poor performance doesn't affect your AdSense publisher rating.

#4. Not every drop in earnings is due to SmartPricing

In many cases, advertisers change their PPC bids due to seasons, product availablity, market conditions etc. directly affecting your contextual-ad revenues.

Consult other AdSense publishers in your niche, prior to jumping into the conclusion that you've been "SmartPriced"

#5. Reduce the number of ad units per page

This one is a bit counter intuitive. Logic tells us the more ad units displayed on the page, the more likely users are to click on one of those ads right?

Problem is - the way Google's algorithm works is - they will try to display the top paying ads first. Then, as you add more ad-units to your site, Google will eventually have to display "cheaper" units. Your eCPM will decrease as your users click on those ads that aren't paying as much.

Use CrazyEgg to identify the areas of your site where users are most likely to click, then experiment with different ad unit styles. Never be tempted to fill your page with a gazillion ad units. A maximum of 2 ad-units per page is ideal.

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