Low CPC? Google Smart Pricing Could be the Culprit

Google Smart Pricing is a feature for AdWord advertisers. This feature could become the cause of low cost-per-click (CPC) for non-performing AdSense accounts.

Has a sudden and steep decline in AdSence cost-per-click (CPC) been worrying you? If yes, my first advice would be “Don’t Panic!” More often than not, it is natural phenomenon in the world of online advertisement and publishing industry. CPC, CTR and CPM are sensitive towards a large number of factors and because health of your AdSense income is a function of CPC, CTR and CPM; it is natural for such income to see downside at times.

SEE: What factors may affect Google AdSense CPC and therefore your income

Don’t Panic is the best you can do. Just continue producing good content and sooner or later you’ll see light at the end of tunnel. However, you should also be aware about Google’s Smart Pricing feature. Most of the AdSense publishers are not aware of this feature –only recently publishers have begun to take it seriously.

What is Smart Pricing?

Smart Pricing is a feature that Google provides to its advertisers through AdWords program. As you know, most of the Google’s income comes from online advertisement –therefore it is of very high importance for Google to keep advertisers happy. Advertisers pay Google and Google pays publishers. So, for Google, advertisers are relatively more important than publishers.

In Smart Pricing, Google charge its advertisers smaller amount of money if clicks on their ads do not regularly convert into sale. The result of this is that Google pays publishers a smaller amount and that, in turn, means low CPC. That is the summary of what Smart Pricing can do to your income.

If your visitors are clicking on ads a lot but are not doing what advertisers wanted them to do (e.g. buying a product or filling a form) then you run the risk of getting your AdSense account “smart priced”. A smart priced account will regularly attract lower CPC.

My CPC is Low. Have I been Smart Priced?

Well, as I said, Google wants to keep publishers also happy. So, they don’t opt for smart pricing an AdSense account just like that. Smart Pricing happens in rare cases. Mostly, it may happen when Google is incurring loss because of your low performing account. Google can’t pay you better if it doesn’t get good dollars from advertisers. Your visitors are making a lot clicks and consequently forcing Google to pay you more money, but if click-makers are not doing anything useful for the advertisers –then Google shall not make much money. And this is when Google may consider putting “smart priced” tag on your account.

Is “Smart Priced” Tag Permanent?

No, after all Google wants to keep publishers also happy! They don’t smart price an AdSense account forever. Although there is no official word from Google about how Smart Pricing works –but it is absolutely safe to assume that Google will revoke Smart Priced tag as soon as the affected account will begin to deliver value to Google’s advertisers.

I have Multiple AdSense accounts. Will one smart priced account affect other accounts also?

Obviously not! Smart Pricing is an account specific feature. Only low performing accounts may become the target of smart pricing.

I feel that my account has been smart priced. Will opening a new account solve the problem?

I don’t think so. Even if you somehow get approval for a new account, you will not be able to push your CPC up if your website visitors are not becoming customers of advertisers.

What’s the solution?

The solution is to keep patience, continue producing good content, bring a bit of variety in content and wait. Sooner or later CPC will definitely go up if you produce quality content.

THIS POST BELONGS TO OUR GOOGLE ADSENSE BIBLE (a must read for AdSense success aspirants)

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