Pay-Per-Click System and Smart Pricing

If you are like me and you make a decent portion of your monthly income from Google's Adsense program, then you want to make sure that you are making as much money as possible with every single click. The funny thing is, many Adsense publishers are leaving alot of money on the table because their account is suffering from something called a smart pricing penalty.

So what is smart pricing, and why does it exist in this pay-per-click system in the first place? In order to understand what smart pricing is and why it exists, think back why a search engine would offer sponsored links in the first place. If you have a popular search engine and thousands of people search for the term 'investing' every single day, if your business is offering investment advice then people searching for that term would be very interested in what you are offering.

That is the purpose of the Adwords program in the first place: to connect people's websites to interested visitors. However, this can be done with more than just links next to search listings. There are probably many different investment websites out there, and when they sign up for the Adsense program then the sponsored links appear on those sites and blogs (called the content network) as well as next to relevant search listings. But when a visitor clicks on a link from a related website as opposed to doing a search directly in Google, is that visitor going to perform as well for the advertiser (i.e. be likely to take action, whether it is buying or signing up as a lead)? Probably not, and this is where smart pricing comes in.

The purpose of smart pricing for Adsense is to identify websites and blogs that are not of the highest quality, because traffic and clicks coming from these sites tends to be much lower performing for advertisers. When a website (possibly yours) is targeted to be smart priced, you will see a marked reduction in your Adsense earnings as Google has decided to charge their advertisers less for the clicks that come from your site.

Is it possible to prevent smart pricing? Yes it is, and I will show you how. Let me say though that I am not affiliated with Google and I do not know the exact ways on which the smart pricing algorithm works. I am speaking from my own experience, but I do know that my methods are effective at preventing smart pricing because it is typical for me to see clicks that pay out 1 dollar or more and that simply cannot happen if you are subject to this penalty.

Methods to Avoid the Smart pricing Penalty

Just as with search engine optimization, there are two main categories that you need to focus on in order to prevent smart pricing: on-site and off-site. The on-site factors are much easier to control and have the largest impact, so focus on these aspects first and then move on to off-site factors.

Here is a list of the things that you will want to include on your site: a clear privacy policy, a 'contact' or 'contact us' link, a 'bookmark us' link, terms of use, and depending on the nature of your site you may also want to include an informational disclaimer. It would probably be the best to include this information in a small bar that is at the bottom of each page. It will really make you site stand out and look professional in the eyes of the Google media bot.

Another on-site factor that you will not want to ignore is a consistent page layout as well as a coherent internal linking structure. When you link to pages within your own site, make sure you are consistent in the way that you structure the links, and focus on making it as easy as possible for somebody to navigate through your site. In terms of off-site factors, this is a little bit more out of your control but it is pretty simple. Basically you will just want to make sure that most of your links come from legitimate and relevant sites, and you will not want to participate in any programs like traffic exchanges of paid-to-surf programs.