Bid Management Tools

http://www.problogger.net/archives/category/adsense/

Google’s smart pricing feature automatically reduces maximum cost-per-click (CPC) bids for certain pages in the Google Network.

Google is constantly analyzing data across the Google Network. If our data shows that a click from a Google Network page is less likely to turn into an actionable business result – such as an online sale, registration, phone call, or newsletter signup – we may reduce the bid for that site.

We take into account many factors such as what keyword lists or concepts triggered the ad as well as the type of site on which the ad was served. For example, let’s say that you advertise digital cameras. Your ad appears on two different pages – a Google web search page for the keyword ‘digital cameras’ and a Google Network page about digital cameras. If Google determines that your ads are not likely to perform as well on the Google Network page as on Google web search, the AdWords system may reduce the maximum CPC bid for that site.

Google saves you time and hassle by estimating the value of clicks and adjusting bids on an ongoing basis. With no extra effort from you, Google technology helps you realize consistent value across Google and the Google Network.

There’s no action required for you to take advantage of this enhanced pricing model. However, you may want to review your distribution preferences to determine whether you are currently taking advantage of both our search and Content Networks.

You may also wish to use the content bids feature, which lets you set one price when your ads run on search sites and a separate price when your ads run on content sites.

Recently I stumbled upon a post from Webmaster world that discussed how a web redesign could positively or negatively effect AdSense earnings.  A a few hours later, I received a article that sheds more light into this area.

The original discussion revolved around how one user eliminated poor performing or pages on her website and it resulted in a significant increase in earnings.  Several other members chimed in on different theories of what could be happening but the snippet from a article from PPC hero explains the whole notion around “smart pricing”.

When you launch a content campaign and ad groups based on keyword themes, it’s like waking up in the morning surrounded by delicious bunnies. Google automatically matches your ads to sites they think are contextually relevant, and you’re supposed to start converting! But Google knows a few things. There are millions of sites in their content network. Some of them convert well, some of them don’t. They try to balance this out for advertisers and improve our ROI with a system called smart pricing, which basically boils down to: on sites Google thinks will have lower conversion rates, you pay less for your clicks. You don’t have visibility regarding what sites you’re getting smart pricing on, but overall, it can help lower your cost per lead for your automatic placements. For advertisers with a lot of traffic on the content network, this can be a great advantage because if you have a lot of automatic placements, you will sometimes convert on the very low-cost smart priced sites. With aggressive elimination of non-converting, high-spend sites, this can help generate a lot of conversions at a reasonable cost; but as I said last week, it can be a time-intensive process to turn all of those one-off conversions into a viable long-term lead generation strategy

So what does Google have to say about smart pricing?

Google’s smart pricing feature automatically reduces maximum cost-per-click (CPC) bids for certain pages in the Google Network.

Google is constantly analyzing data across the Google Network. If our data shows that a click from a Google Network page is less likely to turn into an actionable business result – such as an online sale, registration, phone call, or newsletter signup – we may reduce the bid for that site.

We take into account many factors such as what keyword lists or concepts triggered the ad as well as the type of site on which the ad was served. For example, let’s say that you advertise digital cameras. Your ad appears on two different pages – a Google web search page for the keyword ‘digital cameras’ and a Google Network page about digital cameras. If Google determines that your ads are not likely to perform as well on the Google Network page as on Google web search, the AdWords system may reduce the maximum CPC bid for that site.

So in another words, if your website sucks, expect your Adsense earnings to sucks also.

Posts discussing the issue:

http://www.webmasterworld.com/google_adsense/3377842.htm

Often when Google releases earnings, AdSense publishers try to extract how much share Google is paying them of the earnings. Ad you know, a publisher places an ad from Google on their site, the advertiser pays Google and then Google pays a share of that to the publishers. Looking at Google’s earnings, you can somewhat figure out how much share publishers make. Always, keep in mind, certain publishers likely get special arrangements.

Labnol posted the latest look at this share, showing that in the first quarter of 2009, Google paid an even 75% to the publishers. However, in the fourth quarter of 2009, that share dropped to 72.06%.

Here is a graph I made showing the decline in 2009:

Google AdSense Publisher Share

Here is the data:

Q1 ‘09 Q2 ‘09 Q3 ‘09 Q4 ‘09
Google AdSense Earnings (in billion) $1.64 $1.68 $1.80 $2.04
Google Payments to AdSense Publishers (in billion) $1.23 $1.24 $1.33 $1.47
Percent Given to Publishers 75.00% 73.81% 73.89% 72.06%

Forum discussion at DigitalPoint Forums.