One of ProBlogger’s readers – Charles – asks the following question:
‘do you know anything about what drives the sometimes wild variation in day to day click values…’ (see longer version of the question).
It is a good question and something that I know many people ask so I’ll answer it publicly. There are a variety of factors that could explain the phenomenon of the variation of click values.
Geo Targeting – the global positioning of the reader clicking on the advertisement can have significant impact upon the value of the advertisement. I know of two bloggers who started blogs at the same time on the same topic – one of which has a .com URL and gets traffic from around the world, the other of which has a .nz (New Zealand) URL and gets quite a bit of NZ traffic. The .com blogger’s click rates are significantly higher than the .nz one’s. In my opinion this is largely due to the fact that advertisers targeting NZ readers are not paying as much for the ads as advertisers in other parts of the world due to market size and competition between advertisers. This could explain quite wide fluctuations in click values.
Demand and Supply – a number of Adsense publishers that I know of tell me that they’ve tracked variations in click values on a variety of levels. Most of these might not explain wide variations. They include:
• monthly cycles – some believe that at the end of the month prices go down as some advertisers have spent their monthly budget and withdraw from the market for the remaining days until the following month.
• weekly cycles – many publishers believe that weekends tend to have lower click values than weekdays as advertisers are wiling to pay more per click to get midweek traffic (this might vary from site to site depending upon the topic of ads).
• seasonal factors – many publishers notice an increase in traffic values in the lead up to Christmas and other holidays. Correspondingly after Christmas can be a low patch for many.
• changes in competition for keywords – this is difficult to track but it makes sense that when a new advertiser enters the market for a particular keyword that prices can fluctuate considerably as a bidding war takes place. This could be triggered by events (sporting, political etc) or simply by advertisers starting or ending a campaign to launch new products or services
• other factors – I’ve seen publishers write that many factors contribute to click values – one I read recently believed that the weather even impacted his! I personally am not sure this would explain click value changing – it might impact impression levels though.
Variation between Ad Values on a Page – the variation might actually be explained by the value of ads displayed on your page. For instance some of my blogs can be displaying up to 12 or so ads on each page (over three ad blocks). There can be quite a large difference between what the top paying advertiser displayed is paying and what the 12th highest ad is paying. Usually the highest paying advertiser is the first ad shown on the first adblock in your page’s source code. The lowest paying ad on your page will be the last ad on the last adblock in your source code.
I’m certain that there are other factors that could explain variation between ads shown on one block and invite readers to submit their own ideas below.
Update – Another factor that some of you have reminded me about is Smart Pricing.