Google has announced that it is 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
Google reports that it is constantly analyzing data across its network, and if their data shows that a click is less likely to turn into business results (e.g. online sale, registration, phone call, newsletter sign-up), they may reduce the price advertisers pay for that click. In turn, advertisers may notice a reduction in the cost of clicks from content sites that publish AdWords ads using Google’s AdSense.
Google adds that it takes 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 claims that Smart Pricing saves advertisers time and hassle by estimating the value of clicks and adjusting prices on an ongoing basis. With improved smart pricing, the advertiser should automatically get greater value for clicks from ad impressions across the google network, all with no change in bidding.