AdSense reducing price-per-click, as CTR grows - true or not?

I heard from someone that, if the click-through ratio is an order of magnitude higher than average, the AdSense begins paying less for each click.

Someone from a rather high-paying keyword-rich site claimed it happened to him.

Then again - I spoke to a friend of mine who works for Google and he vehemently denied it.

Do you think it’s true?

I don’t see that in my stats.

But there are so many different factors influencing this claim.

  1. where is the traffic coming from?
  2. why the higher CTR? Possible click fraud which will result in no payment for clicks which result in lower eCPM
  3. is it a short time phenomenon or a long term effect?

To the best of my knowledge (based on reading the info Google supply about how AdSense works) they pay a fixed percentage of the amount of advertising income that they receive for the ads. The amount is therefore mostly dependent on how much the advertisers are prepared to pay to have their ads clicked on.

Adjusted for any clicks that Google consider to be fraudulent of course.

And then there is smart pricing:[B] Whats up with that smart pricing?[/B]

If the click-though rate has increased, it means your number of clicks has increased (unless your traffic has dropped). Consequently, advertiser campaigns will run out of funds faster. Since the highest paying ads will always show first, the average per-click payment will decrease.