Google Tweaks Its AdWords Algorithm
by Don Reisinger on September 15, 2008

Google AdWords Logo

A slew of companies rely on Google’s AdWords system to bring users to their sites. But in an attempt to improve the quality of AdWords, Google will unveil a new judging system in the next few days that could have a major impact on current AdWords users.

The most important change the company announced Monday has to do with how it calculates the AdWords Quality Score, which helps determine the order of each ad for a given keyword. Google said that it now calculates quality in real-time as a Google user performs a search, along with its current practice of analyzing click-through rates, and landing page quality is evaluated less frequently.

Google is also eliminating its “inactive for search’ moniker for those keywords that would yield few (if any) impressions. The company said that all keywords are now available on Google.com and although the company said those keywords will probably still yield less than ideal results, they may add some impressions for those sites using them.

Finally, and perhaps the most controversial, Google announced that it will replace “minimum bid” prices with “first page bid estimates,” which will probably see rates go up. According to Google, on those keywords that have few advertisers bidding for placement, the new bid estimate should be close to the old minimum bid. But for those companies that want first-page placement on keywords that are more popular among advertisers, the cost could be “significantly higher.”

Google didn’t give any word on exactly when the new system will be rolled out, but it should happen over the next few days.

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  • Wow. Those are some significant changes. It took us a long time to get situated using Adwords for our company and I feel like these changes will take some getting used to.

  • As a shareholder I’m thrilled.

    Keep upping those rates to the max!

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  • Nice to have a monopoly :(

  • Well, I guess I will have to keep a very close eye on our adwords account over the next few days. I was already good and confused over Google’s search engine algorithm, so why not throw a bit more confusion into my brain? Sounds good.

    Jake
    NoteScribe: Premier Note Taking Software

  • Be in waiting and change the advertiser if need. I sincerelly hope not must to do.

  • We’re ready to take our PPC ads to Yahoo, MSFT and others. With the exception of EXTREMELY high budgets, just about anybody can have their leads fulfilled on the other SE’s.

    Regards,
    George

  • Being a top client of Google, I knew about this a few weeks ago, and we aren’t worried.

    Although the analyzing of landing pages less makes me wonder if affiate marketers will now run rampant on adwords again…

  • I’ve seen this before with Google a couple of years ago. This is, most likely, simply a rate increase. Remember when you could buy terms (even if you didn’t get a lot of impressions) for 5 and 6 cents? No longer! Now you won’t even be on the front page of a search. I think they should just go back to the original Goto.com model they ripped off and allow any ad based on highest bidder. May not be very useful but at least it would be honest…

  • whats weird here is there is not even a veil of why this is good for the user its a simple change to allow google to earn more money on Adwords. I would expect at least some attempt at explaining this as innovation not pure monetization but the greed is far far entrenched in google now. bummer, but also not likely to cause any mass exodus as their position in the search market remains vice grip strong.

  • Actually, I think can shed some more light here:
    The IP-address/cookie based ad-targeting that users encounter when searching on google, actually Roamed with me to a Adsense sites. Specifically, looking for some ASP.NET component on Google.com, and then after a few minutes, visit a blog (with content totally unrelated to programming), the Adsense on that blog, continued pitching me ASP.NET components and related offerings.

    Is that well known, or is that new?… its the first I’ve seen this happen, that was 4 days ago

  • silicon valley dropout - September 15th, 2008 at 4:50 pm PDT

    LARRY AND SERGEY will be worth 40 billion by next year now lol

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  • I think its time for the antitrust lawyers to get more involved.
    Google is worried about generating more growth and returns, but it can do it easily – by screwing advertisers and abusing its monopoly position.

    I give it 12 months before regulators start taking action.
    The sooner the better.

    Google is just Microsoft with lava lamps.

  • I’m pretty sure they have completely obfuscated the AdWords system to everyone now, including their own engineers.

  • If you’re serious about marketing your business online- whether through google, yahoo, or msn- why continue to give yourself a headache trying to muddle through all these changes?
    Wouldn’t you rather have someone helping you every step of the way?
    I’ll offer You a dedicated Client Manager works closely with you to understand your business goals, translate these into search engine performance objectives, and lead the design, testing and launch of a PPC campaign for your business.
    Every month, your Client Manager will summarize your campaign’s performance against objectives and recommend changes including: creative ad copy edits, keyword changes and additions, and adjustments to your budget.
    We’ll keep up with these changes so you dont have to! email me kristina.m.gallant@idearc.com

    • Watch yourself with Idearc. I had a bad experience with them blowing my budget halfway through the month. It may have just been my account manager, but the company didn’t want to do anything to fix the problem.

  • Folks, this is all a ruse; here’s why:

    This is just Google’s way of addressing the negative press they received in the New York Times last week about arbitrarily setting minimum bids to $10/click on sites that their algorithm didn’t like. Sounds like a distinct violation of the Robinson-Patman act to me.

    I’ve been hit by this arbitrary adword restriction and even though the interface (adwords) has changed (today) and no longer says all my keywords are inactive for search, there is still not a single impression let alone click-thru.

    Google is just trying to avoid the anti-trust implications by not telling you your addwords will not be displayed, they just don’t display them.

    Check out the NYT article here:
    http://www.nyti...y/13nocera.html

  • I don’t have any problem with my ads getting displayed. My biggest beef is the click fraud. Within six months of every new product campaign we set up, we end up disabling the whole campaign when the click throughs go through the roof and the results delivered don’t change.

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