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smartpricing / earnings cap

a little experiment

         

frox

8:05 am on Sep 15, 2006 (gmt 0)

10+ Year Member



Just a small experiment to see how much truth is in the "earnings cap" theory....

Get the stats for the whole 2006

A) Order by impressions, see the 10 days with highest impressions

b) Order by eCPM, see the 5 days with lowest eCPM

How many of b) you find in a)?

in my case, large-ish site and very static, it's 5/5

[edited by: frox at 8:38 am (utc) on Sep. 15, 2006]

johnblack

8:22 am on Sep 15, 2006 (gmt 0)



OK I'll play

2 out of 5 from (b) in the ten from (a). The sample was over a seven month period from a small-ish site with about 1,000 uniques a day.

dirkji

8:27 am on Sep 15, 2006 (gmt 0)

10+ Year Member



0/5

gothwalk

8:44 am on Sep 15, 2006 (gmt 0)

10+ Year Member



I'm seeing 2 of the lowest eCPM days in the 10 highest impression days. However, I think this is just another measure of the observed tendency of traffic spikes not to increase the number of clicks.

trannack

8:50 am on Sep 15, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



I have zero. But I really can't see the point of this.

europeforvisitors

3:06 pm on Sep 15, 2006 (gmt 0)



If there's any kind of cap, it's less likely to be an "earnings cap" than a "share of available inventory for any given ad" cap.

Pengi

3:38 pm on Sep 15, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



0/5

But even if I had 5/5 'd still doubt it was due to an earnings cap.

More likely there is something else causing a significant increase in traffic, and the extra traffic doesn't convert the same way as the regular traffic.

Assume my regular 1000 visitors a 50% CTR for may usual Ads - I get my "usual" eCPM - varies a little according to the actual CTR and the value of the actual Ads on my page.
Then somethin happens causing, say an extra 1000 visitors - but these extra visitors have a different route to my site - they are looking for differnt things and only have a 10% CTR. Therefore my eCPM will reduce - because of the extra traffic behaving differntly.

jomaxx

4:29 pm on Sep 15, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



It's not an earnings "cap" in any meaningful sense. Lots of sites have one-day increases in earnings, or increase their earnings average over time.

What happens (IMO) is that there is something in the payout formula that smooths out daily earnings. This is the reason why (in my case anyways) eCPM is always highest in the morning and gradually falls throughout the day. But if the increase in traffic sticks, you would set a new baseline for daily impressions/clicks and the so-called cap would disappear.

Car_Guy

4:44 pm on Sep 15, 2006 (gmt 0)

10+ Year Member



I got 2 out of the 5.

In an attempt to understand how this all works, I've been keeping records of my reports several times a day. After looking them over, there have been 11 days this month that had a lower eCPM at the end of the day, and 3 days that ended with a higher eCPM than it was early in the day.

Hobbs

4:53 pm on Sep 15, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member Top Contributors Of The Month



something in the payout formula that smooths out daily earnings

You got me curious Jomaxx, care to elaborate?

eCPM is always highest in the morning and gradually falls

I used to have it exactly this way when I started years back, now my eCPM grows though the (Google new day) gradually, reaches a peak and slopes slowly in the last 8 hours of the (Google day). The difference between now and then is less ad units per page + referrals where bad performing ad units used to be.

Added: I too now believe there is no "earnings cap"

[edited by: Hobbs at 4:56 pm (utc) on Sep. 15, 2006]

jomaxx

5:15 pm on Sep 15, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



I don't really have an explanation except to say that intraday variations shouldn't be due to smart pricing, and I don't believe it's related to how much advertisers are bidding. All that's left is the sharing formula between Google and the publisher.

It's basically a zero-sum game in that you'll come out ahead on slower-than average days and pay a penalty on heavier-than-average days. I don't see any logical reason for Google to do this, except perhaps that they feel that smoothing out the peaks and valleys will keep publishers dumb and happy.

Car_Guy

5:21 pm on Sep 15, 2006 (gmt 0)

10+ Year Member



I'm inclined to think that fluctuations are due in part to the fact that AdWords advertisers are able to set maximum values for their ad bids according to many parameters that includes the time of day.

Hobbs

5:44 pm on Sep 15, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member Top Contributors Of The Month



The truth can be in both jomaxx and car_Guy's words

First: It is an unstable market place
Advertisers walk in and out with high frequency, and those that stay as carguy says cause waves of earnings not a steady income.. > instability for publishers, causing low loyalty and if publishers too are rocking the boat walking in and out with high frequency, the whole system might shake and become too unpredictable

Enter Jomaxx's theory, a stability for publishers, if I was Google I would do it through the balancing of the high and low paying ads based on past data of traffic, performance (conversion), earnings and many other factors.

End of the day more stability for the whole network.

But I'll add my own to oppose the above now: :-)

The very nature of stability of AdSense from Google's, Advertiser's or publisher's perspectives comes from the sheer large number of advertisers first, followed by a never ending supply of publishers, at high numbers, things get boringly predictable, I know that first hand from my own site.

The less intervention on Google's part, the more this large system remains stable, that is probably why you will not see any radical TOS modifications, sudden MFA crack downs, any rocking of the stable boat is unwelcome, but you will observe slow gradual careful cosmetic touch ups here and there, case and point the new ads QS rules. Public companies can't afford to do what collage students previously could do, I miss the good old crazy Google days.

[edited by: Hobbs at 6:08 pm (utc) on Sep. 15, 2006]

david_uk

7:45 am on Sep 16, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Zero out of ten here.

My highest impression days did have good ecpm, and my lowest ecpm days were the couple of weeks leading up to the removal of the ads following the QS algo driving most of the remaining ads in my niche away.

I'm not inclined to believe there is an earnings cap personally. One thing I did notice was that any sharp increase in traffic and clicks was always met with a very fast reduction of epc. This may be due to a variety of reasons of course, but as smartpricing exists to maximise Google's profits, a sharp increase in traffic and clicks is is an ideal opportunity for them to cash in by decreasing the payout whilst not increasing the smartpricing discount to advertisers.

berto

1:15 pm on Sep 16, 2006 (gmt 0)

10+ Year Member



On high click-count days, I usually observe lower than usual EPC. Although I haven't analyzed this systematically, I tend to believe that Google does indeed algorithmically smooth out daily earnings. YMMV.

frox

1:36 pm on Sep 16, 2006 (gmt 0)

10+ Year Member



My usage of "earnings cap" was not bery clear.

I was just meaning that increases in traffic and clicks (sharp ones but imho gradual ones too) leads to a lower eCPM.

On this point, there seems a rather general agreement..

swa66

12:50 am on Sep 17, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



0/5

Actually the reverse is true: peak traffic days also resulted in peak eCPM.

But the less targeted visitors I was getting were much more click happy than my regular visitors.

Edge

5:37 pm on Sep 17, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member Top Contributors Of The Month



I don't know for sure if there is a earnings cap or other. However, my observations and gut feel is that there is something going in regards to our earnings payout. Whatever it is, I'm positive that it is not in our favor...

I have been adding pages religously for years, and even with diversity, my earnings barely go up. I can put ads on a selected group (content catagory) of pages and watch my earnings tumble. If fact, I am working harder than ever to just keep my historic eCPM.

My lastest strategy is to change out the Adsense ads with YPN ads. My over-all earnings is rising as well as my ECPM.

My estimation of what is going on is that there is a number triggers which change our payout share.

[edited by: Edge at 5:38 pm (utc) on Sep. 17, 2006]

Dzordz

7:49 pm on Sep 18, 2006 (gmt 0)

10+ Year Member



0/5

Guess your experiment is a flop.

TheDonster

10:28 pm on Sep 18, 2006 (gmt 0)

10+ Year Member



I had one out of ten and it was my highest impressions day which had the 7th lowest eCPM year to date. But I noticed my highest traffic days so far this year were all in Feb. March months and the lowest eCPM days were found here as well.

david_uk

5:51 am on Sep 19, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Guess your experiment is a flop.

Guess not.

People should not be discouraged from posting about any patterns they observe and asking for feedback from others here.

Very often, by people posting patterns they can't account for, getting feedback from others and debate we do learn more about the intricacies of how adsense works. I suspect Google learn things they don't know too.

To give you a recent example, Ann started a thread where she discussed the results after she removed all channels from her site and the earning shot upwards. Yes, the thread sparked some debate but in the final analysis we may have learned something tangentical. Specifically that if you force Google bot into re-evaluating your site as a whole by major changes then there is the possibility of Google's valuation of your site going up - hence better EPC. Maybe even better paying ads getting placed.

This experiment may on the face of it not prove that there is an earnings cap, but it may prove there isn't. We may learn something from it, therefore discouraging people from posting by this type of comment is (in my view) wrong.

wuzexin2000

9:05 am on Sep 19, 2006 (gmt 0)

10+ Year Member



>>>VActually the reverse is true: peak traffic days also resulted in peak eCPM.

I agree.