This is where things get tricky. Google is playing its cards pretty close to its chest when it comes to the methods it uses to calculate Smart Pricing and even measure ROI.
This is what Google has officially told us about Smart Pricing:
• “Content Is King.”
Google makes it pretty clear that sites that will benefit most from
AdSense are those that “create compelling content for interested users.” They also emphasize the importance of bringing targeted traffic to look at that content. Those are two different factors which together create a site with loyal, appreciative users. Just the sort of thing that every serious webmaster wants.
10.1 What Else Do We Know About Smart Pricing?
• Smart Pricing is calculated across an AdSense account. So if you have a number of different sites covering a range of different topics and one of them delivers a low ROI, all of your ad prices may be lowered.
• Image ads are affected by Smart Pricing.
Many serious publishers choose not to use image ads except when they’re receiving CPM campaigns. Was this a reference to ads in low locations receiving lower rates?
10.2 Strategies To Benefit From Smart Pricing
The challenge for publishers trying to keep their ad rates high is that there’s no way to know exactly how many of your clicks are converting into sales for your advertisers. You can’t even tell what would count as a sale for the different advertisers you’re promoting.