by Steve LaLonde – PPC Manager at DragonSearch

The folks at Google have announced some new changes on the horizon for AdWords. These changes could be quite significant, to say the least. First, lets look at the three proposed changes, and then play a bit of Devils Advocate, in regards to #1 and 2:

1). AdWords will now calculate Quality Score in ‘real time’, at the time of the search query.

2). AdWords will no longer display ‘minimum bid’ requirements, and will instead display ‘1st page bids’.

3). Google will no longer mark keywords as ‘inactive for search’.

Let’s look at #1 first. AdWords Quality Score has always been a static attribute given to the keywords within your campaign. A ‘poor’ Quality keyword was a poor quality keyword, until you deleted it or made some changes to improve. This ‘static’ Quality Score, although frustrating at times, allowed advertisers to take note of relevance issues, and make changes to improve overall performance.
Now that Quality Score will be dynamic, and determined in real time, this is a major change which could make it more difficult to identify issues and act on them.

Our biggest question is “how will Google report Quality Score to advertisers, now that it is a dynamic ‘real time’ attribute?” Since QS will now be variable, and potentially always-changing, AdWords won’t be able to simply report a static QS at the keyword level, as it does now. This Quality Score info is important, as us advertisers need to see Quality Score, and take actions to improve. We certainly want more transparency – not less – when it comes to our campaigns and the variables that affect their performance. We’re curious to see if and how Google will tell us what our Quality Scores are for keywords, now that they could be many different things (Poor, OK, Good, Great), all in the very same day (or minute technically)!

#2 – Google will do away with minimum bid requirements, and now show us ‘1st page bids’. This sounds great, as most people want to know how much it will cost them to show on the first page of search results.

On the other hand, this is a bit worrysome for a few reasons. In the past, high minimum bids (like when Google forces you to pay at least $0.50, $1.00, or $5.00 just to keep a keyword active) immediately made you aware of a problem with your keywords. High minimum bids almost always indicated a very poor Quality Score.

Now that AdWords will get rid of ‘minimum bids’, and give us ‘1st page bids’, we may not know why exactly a particular keyword costs ‘$5.00’ to display on the first page. Advertisers may assume the keyword is simply very competitive and expensive. The root cause though, could be a poor Quality Score. You don’t want to be fooled into paying high CPC’s because you assume that the suggested CPC is simply the ‘going rate’, do you?

Side note: I also speculate that bids as a whole may increase as a result of the new ‘1st page bids’, as most advertisers will want to bid for the required first page position, using Googles suggested bid. This “1st page bid” suggestion will certainly be higher than current ‘minimum bids’, which are usually only $0.05 or less for keywords with great Quality Scores.

#3 – Google will no longer mark keywords as ‘inactive for search’. This simply means that keywords will never technically be inactive, but still may not display for a number of reasons (low search volume, bids too low, poor QS). I’m not really sure what impact this will have on advertisers quite yet.

All in all, the upcoming AdWords changes are interesting to say the least. Hopefully Google will not only make these changes, but provide us with new, stronger insights into Quality Scores, and why exactly we have to pay $X.XX to display ads on the first page. We need more transparency, not less, so we can continually take actions to improve.

The proposed changes should begin appearing in select AdWords accounts over the next two months. I’m going to take exact snapshots of one of our existing client campaigns, so we can do a bit of comparison, old vs. new.

Will Google’s suggested 1st page bids be higher (or lower!) than what I’m currently paying for 1st page display? Will we see more Quality Score insights – or less – than we currently do? Here at DragonSearch, we can’t wait to do a comparison and full evaluation of the new changes. Stay tuned!

This entry was posted on Monday, August 25, 2008 and is filed under Pay-Per-Click.

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