Smart Pricing and Click Abuse

Back in 2004 Google started a policy known as "Smart Pricing." Smart Pricing basically recognizes the fact that click abuse and other end-runs around good internet practices can cost advertisers big-time. With Smart Pricing, advertisers pay less for clicks that come in from sites that are likely spammy or click-abusive. It just makes sense -- if I'm an advertiser and some jerk in China spends all day sitting around clicking my ad just to make a few dollars for himself or a click-abuse client, then I'm going to stop advertising with Google. They's very smart at Google, and they are always working to counteract the best attempts of those who want to exploit the money-making possibilities on the internet.

If you have an Adsense account, and you start getting a zillion page view and a bunch of clicks that are all worth a few pennies each, Smart Pricing may have kicked in. BE CAREFUL, because that means people, or you yourself, are click-abusing your sites.

Here's part of Google's announcement about Smart Pricing:

‘We’re introducing automatic price adjustments for certain clicks you get from the Google Network. Google’s smart pricing model has always provided better placement for better performing ads, and reduced the cost of a click to the least amount possible to stay above your competitor’s ad. And now, with no change in how you bid, Google may reduce the cost for a click if that better reflects the value it brings to advertisers like you.

How smart pricing works

We are constantly analyzing data across our network, and if our data shows that a click is less likely to turn into business results (e.g. online sale, registration, phone call, newsletter sign-up), we may reduce the price you pay for that click. You may notice a reduction in the cost of clicks from content sites.

We take into account many factors such as what keywords or concepts triggered the ad, as well as the type of site on which the ad was served. For example, a click on an ad for digital cameras on a web page about photography tips may be worth less than a click on the same ad appearing next to a review of digital cameras.

Google saves you time and hassle by estimating the value of clicks and adjusting prices on an ongoing basis. With improved smart pricing, you should automatically get greater value for clicks from ad impressions across our network, all with no change in how you bid.

So be careful, be smart, and play by the rules!