If you’ve ever attempted to make money online, you know that it can be very complicated, requires a lot of research, and is always evolving and changing. Last week I posted my December 2007 review and talked about how my overall income dipped for that month, particularly with Google AdSense. I noticed a similar trend on most of the blogs I read, so I originally told myself that it was probably due to the change to the clickable AdSense area.

Last week I ran across a post over at Courtney Tuttle’s blog titled how to get worthless AdSense clicks, which caused me to re-evaluate how I approach trying to make money with Google AdSense. In this post, Court explains Google’s smart pricing, which basically is a system that Google uses to penalize bloggers who get a lot of worthless AdSense clicks. This idea was not a new concept to me, as I’ve heard in the past the theory that having less advertisements per page can result in higher payouts per click. I also remember David of CyberCoder talking a bit about smart pricing in one of his video blogs (though I can’t find the link now).

After reading Court’s post, I decided it was finally time to look into this a little more. It just seemed to be to much of a coincidence that my AdSense income was at an all time high, then I launched a bunch of new blogs that currently aren’t receiving a lot of traffic and my AdSense income dipped from $10.00 a day to $3.00 or less.

The first thing I did was go into my Manage Ads page in the Google AdSense panel (managing all my AdSense code from here saved me a TON of time) and set up some new channels for my various ad blocks, including in-post squares, rectangles ads, link menus, and other places where I had AdSense on my sites. This way I could determine which advertisement blocks were performing the best. After a couple of days doing this, I studied the results and completely removed the under performing advertisements from my sites (anything with less than a 2% CTR). I also removed AdSense completely from some of my newer sites that haven’t received much traffic yet (if you feel your under performing websites need advertisements, you can easily replace your AdSense ads with Yahoo! Publisher Network ads or BidVertiser).

It is unclear how long it takes for AdSense to remove the penalty, but I’ve already seen some progress here over the past day. Unfortunately, it is to early to tell if this is a coincidence or not. If you have more questions about Google’s Smart Pricing penalty, I recommend you click over and read the post. It provides a detailed explanation, tips on fixing it, and also includes a bit about keyword sniping.

Are you a victim of Google’s smart pricing penalty?

[found via EZ-OnlineMoney]