• by Shankar Gupta , November 2, 2005

A former participant in Google's AdSense program has roiled the online publishing community by alleging that Google's pricing system penalizes publishers that have even one low-performing site.

In an Oct. 25 post to WebMasterWorld, the former AdSense publisher, "Kurtpdx," claimed an AdSense representative told him that one low-performing site could cause Google to lower the ad prices of all sites in the publisher's account.

Kurtpdx wrote that the rep mentioned this in an attempt to entice him back to AdSense after he had switched to the Yahoo! Publisher Network in September.

The unspoken message seemed to be that publishers could command higher prices for their ads by removing low-performing sites from the AdSense program. Publishers posted irate comments to JenSense.com, the blog where Kurtpdx's post apparently was first publicized.

The post caused such a stir that last Friday, Google's AdSense team posted a response on the AdSense blog. "More than conversion rate goes into determining the price of an ad: the advertiser's bid, the quality of the ad, the other ads competing for the space, the start or end of an ad campaign, and other advertiser fluctuations," the response read.

The response also pointed out that Google's technology is frequently updated, so what's true today may not be true tomorrow. "Keep in mind that like most Google technology, our system for calculating advertiser pricing gets updated regularly," the blog stated. "We're constantly improving our ad products to benefit both the publisher and advertiser communities; what benefits one side ultimately benefits the other."

Google did not return calls seeking further comment.

Jupiter Research Analyst Gary Stein said Kurtpdx's revelation, if true, is a rare window into how Google's advertising "black box" operates, and it shows that Yahoo! Publishing Network, by allowing publishers more insight into how they price ads, has found a chink in the market leader's armor. "The way you compete against Google for B2B accounts is to say--well, we're willing to share with you information: 'We're more responsive, it's not a black box here'," he said.

Nevertheless, Stein said, it's unlikely that such a tactic would force Google to change its ways and release more information to the publishers. "You'd have to dangle them off the pier and shake them upside down to get them to release information," he said. "It's counter to their nature to reveal their inner workings."