If you are experienced in the Adsense arena, then you know that Google has now developed a new way to decide how much you earn through your Adsense ads with their new Smart Pricing formula. What is the formula? No one knows exactly. There is a theory though…

It involves their formula for the alogorithm that determines if the visitor who clicked on one of your ads is a good customer for the advertiser. This means the “clicker” should be interested in the product advertised and make a purchase from the advertiser. How does Google get this information? They don’t actually.

Avertisers who work with Google through Adwords are not required to share their conversion rates from click-to-purchase. Some advertisers do share this information since Google has a way for them to share it, while most advertisers don’t share this info. If the advertisers don’t share this information, then how does Google decide how clickers are converting to sales? Hmmmm… they must have to guess, (or use one of their famous formulas).

The new Smart Pricing equation being thrown into the Adsense income mix has a lot of web site owners upset. They have seen their sales drop dramatically even though they are showing the same amount of ads with the same amount of monthly clicks on average. Google won’t share what they are doing because then people can “beat the system” and cost Google and their advertisers money that is not actually earned through honest site optimization.

What can you do to help your site with this new change? Well one of the things that Google does is decide if the ad showing is in “theme” with the page it sits on. Your site should contain a consistant theme throughout. You can still use related keyword optimized pages AS LONG AS your site is also related to the same subject.

If you are going to do tracking, then only change ONE thing at a time. You should monitor the change and it’s results. If the change brings you a larger income, then stick with it. IF it doesn’t then change it back and change a different element. Then monitor those results. Keep doing this until you have your own perfect formula for surviving the Smart Pricing alogorithm.

Having too many different subjects on your web site can actually get your clicks penalized and you will be paid less. It’s wise to have different web sites that focus on each individual subject with different related keyword optimized pages. The more you “niche” your site the better. A niched site relating to one major theme will get you a higher payout on your Adsense income.

What part of this new Smart Pricing is unfair to publishers? My own theory is crummy landing pages. If you have an ad show up and your visitor clicks on that ad and then get sent to a crummy landing page and leaves. You have just been penalized because the customer did “not” convert to a sale and it’s not your fault.

The other down side is Adword advertisers who are buying keywords not even related to what their web site sells. This is another lost customer who didn’t convert to a sale and you might be penalized instead of the advertiser who actually gets money back from Google because of their low conversion rates.

Whether you like it or not, and even if it’s not the “smartest” of Google’s new changes, it’s already in place and you are already a participant if you serve up Google Adsense ads. It seems that the ones paying Google, (the advertisers), are going to have a little more say than the publishers naturally. If they are complaining about click fraud or bad conversion rates, then their voices combined are what makes Google change.

Since Google likes to make money, I am sure they have several bean counters going all the time to find out if the changes have hurt their bottom line, or helped it. We can probably expect these changes often. Google promises that it tries to make you the most money as an advertiser because then they make more money.

I do know this….

In April 2005 I was making over $3,000 a month with Google Adsense. In March 2006, I am making around $750 a month with Google Adsense yet my traffic has increased since last year. If I am making less, then Google is making less from me. I have a high traffic web site and yet my Adsense earnings have plummeted.

How do you fix the problem when you are not privy to the conversion rates for the ads showing on your site? How do you know which are the bummer ads compared to high converting ads. With this knowledge you COULD apply Google filters weeding out the bad advertisers who have a problem converting sales once their visitor has landed.

The only thing we can really depend on is that Smart Pricing is fairly new and maybe Google will get it all ironed out in the end. Did I say “end”. Google never ends, it just keeps on going and going and going….

What Is AdSense Clickbot (a.k.a Automated AdSense Clicker)?

Note: I do not condone or encourage cheating on Google AdSense or any advertiser network. This article is indeed written to show why you should NOT use clickbot. If you want to increase your earning, there are legal and easier ways.

Apparently, for some reason, it is not easy to find information about clickbots from the Internet. I need to dig a bit into Google cache to get some decent information. At the time I’m writing this, even Wikipedia does not have an entry specially for “clickbot” yet. The nearest term from Wikipedia is “Internet Bot”.

A bot is common parlance on the Internet for a software program that is a software agent. A Bot interacts with other network services intended for people as if it were a real person. One typical use of bots is to gather information. The term is derived from the word “robot,” reflecting the autonomous character in the “virtual robot”-ness of the concept.

Put simply, clickbot is a specialized bot made to simulate clicking. Initially popular for gaming cheat, now clickbot has taken the highlight in pay-per-click advertisement business. In 2004, a California man created a clickbot that he claimed cannot be detected by Google. Failed to make good money selling the program, he tried to blackmail Google for $150,000 to hand over the program. He was arrested, nonetheless.

For computer savvy users, creating a clickbot is very simple and straight forward. You just need a macro to record your activities. While the macro is recoding, you visit your own site and click on the ads. Save the macro, and then let it run. Of course, you will also need a list of proxies to cover your track.

Fortunately for advertisers and honest publishers, Google is not stupid. With the huge amount of data that it has, Google can easily compile the most comprehensive proxy list on earth. In the AdSense report, clicks from proxies will add up to the number of clicks, but no money is credited to the earning. As you guess, when the proxy clicks exceed a certain number, your AdSense account is disabled

Organised crimes handle this by having the clickbot software on many computers around the world, each with their own Internet Service Provider. Some of these software may be installed without the computer owners’ permissions or knowledge, via trojans and viruses. Or it might be installed voluntarily by the click-network members.

Beginning of this year, Greg Boser from WebGuerilla did an experiment to test the extent of click-fraud by using clickbot, with no conclusive answer. Some experts claims that click fraud accounts for up to 20% of the clicks, generating more than $1 billion in a year.

Whether or not the estimation is correct, one thing is sure. Google, Yahoo and other big players in the PPC advertising business takes click-fraud very seriously, and it will be just a matter of time when fraudsters are caught.