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In the first recipe of this chapter, when I described the pros and cons of using Google Adsense, I talked about a thing called "Smart Pricing", which basically causes you earn less money. In this recipe, I'm going to tell you what exactly "Smart Pricing" is and how to avoid being Smart Priced by Google.

What is Smart Pricing?

Some blogs, or web sites, have a low CTR (Click Through Rate). CTR means the average clicks on your ads. For example, your CTR is 1% if your ads are displayed to 100 visitors and only one of them clicked on it.

The higher your CTR is, the more money Google earns from your ads. If they display some ads on your web site but no-one clicks on them, they don't earn any money and that space is a waste for them.

Due to the culture of secrecy that Google has, it is almost impossible to be sure on how Smart Pricing applies. Though, many Adsense users who have a CTR below 1 or 2 percent saw their Adsense earnings dramatically decrease. It appears that if you are "Smart Priced", clicks on your ads will only get about 10% of what they are worth.

The one thing that is sure is that Smart Pricing is definitely not smart at all. Since we can't do anything to fight it, the best thing to do is to try and avoid being Smart Priced.

Many search engine specialists agree on the point that it's mostly people coming from search engines who click on the ads. Your readership (such as RSS subscribers) don't often click on your ads—or they do it in order to make you earn money—because they are interested in your content, not the advertisements. People coming from search engines click on ads if they were looking for something they didn't find (or need more details) on your blog.

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