[This should have been put in the SEO/SEM category, but got put in Other by accident, since that is the default. ]

A big story started unfolding a couple of days ago about Adsense and how Smart Pricing works. It started at Webmaster World when one member got a phone call from Adsense and in the course of the conversation it was revealed that Smart Pricing is calculated not on a per site basis, but based on an entire account. It otherwords, if someone has more than one site with adsense on them all their sites can be affected because of just one of them.

The basic concept of Smart Pricing is not a bad idea. If an ad from ’someplace’ tends to not to convert into sales for the advertiser, then advertisers pay less for ads from ‘there’. The problems with it include how the conversions and being counted. From what I understand it depends for one thing upon whether or not an advertiser even using that feature of Adwords. Many do not. Many can’t really track conversions that well.

And now we find out that the ad from ’someplace’ may not refer to just a specific site, but any site in a person’s account. So if a person has one site that doensn’t convert well, this could lead to Smart Pricing having negative effect on how much they can make on their other sites too.

Jenstar, the moderator of the Adsense Forum at Webmaster World posted in her blog about this: One poorly converting site can “smart price” an entire AdSense accoun. Plus several other threads have popped up at WMW about this now too including this one:
Jenstar reveals data about Adsense Smart Pricing.

At the time of this writing we have not heard any official confirmation from Google about whether this is really true or not: smart pricing per site or per account.

In addition, since Adsense does not always have data to determine conversion rates accurately it has been speculated that CTR’s may sometimes be figured into the equation - leading many to suggest removing Adsense from pages with a low click through rate.

I would like for Adsense to deny or confirm this whole account thing and if its true I really think they should change that. Let it at least be figured on a per site basis - although ideally I’d like to see it handled on a per channel basis, but that may be too complicated.

Meanwhile, I will seriously consider removing Adsense from my pages with a low ctr - some months ago this was discussed WMW and I did remove Adsense from some pages. For other reasons it was hard to tell if it helped any, but at any rate it didn’t seem to hurt, and many posters at WMW seemed pretty convinced that it helped their sites.