Smart Pricing:

this term describes a Google policy change from 2006 which concerns AdWords advertisers and AdSense publishers.

Before this date CPCs for a keyword were the same, no matter if the ad was displayed on Google's search result page (SERP) or on an external website from the content network (AdSense).

With Smart Pricing Google made a concession to the advertisers due to the fact that it became increasingly obvious that traffic from SERP ads proved to be of higher quality for advertisers, i.e. was converting better. The change therefore was the possibility to setup AdWords campaigns with different bid prices for keywords when the ad appears on a SERP or on an external website.

Screenshot of the setup page for a Google AdWords campaign. The advertiser can choose if he wants to let his ads appear on the content network at all. If yes he can choose a lower bid price for these ads.

For AdSense publishers the introduction of Smart Pricing meant a sometimes considerable drop in their earnings. This drop mostly was a gradual one and not sudden as Google did not announce this change broadly and many AdWords advertisers realized this new possibility only after a while (and some might still not have a clue).

Smart Pricing was the reason for the famous "AdSense Is Dead" campaign in 2006 igniting a quite heated discussion amongst AdSense supporters and AdSense critics..

[Smart is from Middle English smerte = quick, sharp (a sharp mind), biting;

Price goes back to Latin pretium= reward, prize, value, worth]

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