What is smart pricing and why does Google use it?
Google’s smart pricing feature is designed to raise advertiser confidence in the AdSense network, which in turn can lead to higher bids on ads that appear on publisher sites. This then benefits the entire advertising ecosystem of publishers, advertisers, and users in the long run.
To appear on AdSense content pages, Google Ads advertisers bid on ads and compete in an auction to appear on your pages. When advertisers compete to appear on AdSense for content pages, they're looking for business results from their clicks. These results differ from advertiser to advertiser, but could range from an online purchase to a newsletter sign-up. To ensure that advertisers are getting value from their bids on AdSense sites, we determine how likely a click is to lead to a business result for an advertiser. If our system determines that a click is less likely to lead to a business result, the advertiser's maximum bid may be reduced.
Smart pricing allows advertisers to confidently bid the maximum amount they're willing to pay for clicks on AdSense sites, which then grows the advertising pie for publishers.
What is Smart Bidding and why does Google use it?
Smart Bidding is a set of automated bidding strategies that optimize for conversion or conversion value in each and every auction. These strategies help customers bid more efficiently to achieve better business results, and allow them to provide high-level goals like a target cost-per-conversion instead of setting individual bids for each keyword.
When customers track conversions and are using manual bidding on Google Search traffic, Smart Bidding may be automatically used on AdSense for Search to help achieve more conversions at a similar cost-per-conversion as Google Search.
What impact can smart pricing and Smart Bidding have on my earnings?
Smart pricing and Smart Bidding are designed to help advertisers confidently bid the maximum they’re willing to pay for their ads, which will increase publisher revenue over time. If a click is determined to be less likely to lead to a business result like a purchase or a newsletter sign-up, an advertiser’s maximum bid may be reduced. When using Smart Bidding, if a click is determined to be more likely to lead to a business result, a higher bid may be set.
However, it’s important to remember that revenue fluctuations are common in AdSense, and should not be attributed only to smart pricing or Smart Bidding. We recommend reading more about our ad auction and how factors such as the amounts advertisers bid and the way they set up their ads can impact your earnings. In addition, you may wish to review our two-part blog series to troubleshoot any revenue fluctuations you’re seeing in your account.
How does smart pricing and Smart Bidding tie in to the revenue share I’m paid?
Smart pricing and Smart Bidding don’t impact the revenue share you’re paid; it affects the amount that advertisers bid to enter each ad auction.
If our system shows that a click on an AdSense ad is less likely to lead to business results like a purchase or newsletter sign-up, we may reduce an advertiser's maximum bid. While this could impact which ad wins the auction, as a publisher, you would still receive the same percentage of earnings from the winning ad.
Please keep in mind that since the revenue share is constant, any changes to advertiser bids as a result of smart pricing will affect the amount both Google and the publisher earn. We’ve implemented smart pricing and Smart Bidding as a way to increase advertiser confidence when bidding on AdSense sites, which will help publishers earn more in the long run.