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One of the most complicated things about making money online with Google AdSense is all the testing a
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How Smart Pricing Effects AdSense (TM) Publisher Revenues
By Dave Lavinsky
How Smart Pricing Effects AdSense (TM) Publisher Revenues by Dave Lavinsky
I constantly receive phone calls from clients, prospective clients and reporters asking the same
question – what percent of the keyword price does Google pay AdSense (TM) publishers. While the
AdSense Standard Terms and Conditions explicitly forbid disclosing such information, the range I often
give is 20% to 50% based on numerous conversations I have had with AdSense publishers.
While the precise percentage is not clear, what is evident is that the percentage that Google pays
publishers has gone down significantly since April 2004. It was at this time that Google announced it
would be lowering the price of ads (i.e., charging AdWords(TM) clients less) that appear on the sites of
AdSense publishers. Susan Wojcicki, Director of Product Management for Google, stated that this
change came from requests of advertisers who wanted different pricing on clicks from search and
content ads.
Google stated that it considered search-based ads more targeted than content ads, and that they
therefore generated more clicks and revenue for advertisers. However, Google did realize that some
content ads perform as well as search-based ads. As a result, “Smart Pricing” was born.
Smart Pricing adjusts the value of clicks based on a number of factors such as time of day, type of
content, and conversion tracking. The latter, conversion tracking, measures how often a click on an ad
produces a desired action for the advertiser, such as a product sale, newsletter signup, etc