Sunday, June 12, 2011

Adsense Revenue – Smart Pricing Can Kill Your Earnings

Guest Post by Wesley Barras
Publishers need to realize an important aspect when they are considering making consistent adsense revenue. Most of their clicks coming from their sites should turn into sales. I think this is an aspect that many people do not fully realize nor grasp.
When you go to your account and see money deposited for “a click” someone actually paid for that. It did not just appear out of thin air.
No matter if you got fifty cents or fifteen dollars for one click there is some person or business who paid for that traffic. And the money you see is only approximately 60% of what what the advertiser really paid for the one person to come to their website. Remember that Google gets their cut as well.
Why do you think someone paid for one individual to come to their website?
Well, they are hoping that the man or woman coming to their website has an interest in what they have to offer, be it goods or services, and buy something.
Yes, they are hoping that enough of the people they are getting through adwords will buy enough of what they are selling to not only pay for the advertising they are doing through Google but make them a nice profit as well.
The expectation is that if a person is on your website then they are interested in some topic you are talking about. And because they are selling something related to that topic they will have a high closing rate when your visitors become their visitors.
Its a beautiful concept and one that obviously works. Some people say buying adwords does not work but Google would not be making billions if it did not.
Its no mistake that their stock price is over $550 a share right now.
Companies do not make billions off things, items, or concepts that do not work. You can make a couple million but not billions. Their “scam” would have been exposed by now.
Anyway, the reason why people keep advertising with the Google adsense program is because it does work. And Google wants to keep it like that.
So, to make their advertisers happy they discount invalid or un-targeted clicks. One, two, maybe three bad clicks are fine. It happens the best sites. But if several clicks come from the same account that does not convert into sales then all of the clicks coming from that account are “put on sale.” The amount charged for any click, for a unknown period of time, is a fraction of what it would normally cost.
This is called “smart pricing” and it can shipwreck your adsense earnings. All it takes is enough of these and every click coming out of your Adsense account for the next day or two will be worth very little. A $5 click may be worth ninety-four cents.
This has happened to me many times and I can tell you that it is not pleasant. The bad thing about it is that one account can ruin others. A poor performing site can ruin the clicks you get from another one that is performing good.
Avoid smart pricing like you would the “swine flu.” If a website is not getting good organic traffic then take the adsense off. Check your stats and make sure all, or most, of the traffic going to that website is targeted Google traffic.
Make the necessary adjustments if not. Do not rush to put adsense ads on a new site before it has the proper traffic. Reddit, Digg, and Stumble traffic does not count. Some people from these sites click on publishers ads just to get them smart priced because they think it is funny or are jealous.
Making great passive online income is possible with adsense revenue and staying away from the smart pricing penalty is one of the keys. Most publishers have no idea what that is and ones who do avoid it at all costs. Failure to be cautious of what websites you add adsense to will result in lower than expected earnings and much frustration.

1 comment:

  1. If you are looking for a reputable contextual ad company, I suggest that you take a look at Propeller Ads.