Google is making changes to its AdWords program intended to provide advertisers with more control over campaigns while potentially improving relevance for users.
The position and frequency of ads are displayed on Google has long been determined by a combination of the amount bid by the advertiser and the perceived relevance of the ad, as measured by clicks from users. Ads that performed well were often boosted in position, displayed above ads with higher bid prices that were deemed less relevant by users.
And in the opposite case, ads that did not perform well were penalized, changing "state" from normal to normal, in trial, on hold, and disabled. Additionally, accounts are slowed when they didn't meet Google's performance requirements, meaning ads would appear rarely for your keywords. To restore the display of these ads, advertisers were required by Google to make changes to improve the quality of the ad.
Google has now simplified this process, making all ads either active or inactive. Relevance guidelines continue to be applied, but it should be easier for advertisers to manage their campaigns when they need be concerned about only two potential states for ads.
In tandem with this change, Google has also introduced a "quality based" minimum bidding system that overrides the automated predictive modeling Google uses to determine the state of an ad. Previously, ads not meeting adequate quality levels based on this predictive modeling were penalized. Now, advertisers can push the ad out to viewers anyway, as long as they meet the minimum bid established by the system.
"Advertisers now will have control over which keywords they want to run," said Salar Kamangar, director of product management at Google.
What Google calls Ad Rank, or the position of an ad on a search result page, will continue to be based on the maximum cost-per-click (the amount advertisers are willing to bid) and quality (now called the Quality Score).
In practice, this means there no longer is a generic minimum bid for a particular keyword. Minimum bids are now determined by a Quality Score, which is essentially a prediction of how relevant an ad is for a specific keyword.
A Quality Score is determined by the historical keyword performance among all advertisers, as well as the performance of an ad from an individual advertiser performance across a set of specific terms, and the relevance of the "creative" or ad text. Kamangar said there are also other factors in determining the score which he declined to disclose.
Pegging minimum bids to a quality score that considers all of these factors effectively eliminates Google's previous de facto minimum bids. For ads that receive a high quality score, Kamangar said the minimum bid as little as a penny. Conversely, for ads that receive a low quality prediction, the new minimum bid could be higher than the previous minimum of five cents.
Minimum bids can also change over time, as the quality score is continuously updated. Ads that perform well will see a decrease in minimum bids, while poorly performing ads will see an increase in minimum bids.
Steps to Take If You're an Advertiser
If you're satisfied with the current performance of your campaign, best bet is to sit back and watch how the changes affect your results. The performance of some of your keywords will likely change as advertisers take note of the new system and alter their own campaigns. Others will likely continue to perform as they previously have.
However, if you have ads currently on hold that you've held off changing, you should delete them from your account as soon as possible. Otherwise, any keywords with a high enough Quality Score and maximum CPC may be reactivated under the new system, triggering impressions and potentially drawing clicks from users, which you'll be charged for.
A key point to remember is that the higher the Quality Score, the lower the CPC required to trigger ads, and vice versa.
The Find and Edit Keywords tool, available in your account's Tools page, lets you quickly search for and delete any unwanted keywords in your account.
Don't worry about disabled keywords. All disabled keywords will remain labeled as disabled, and in a few weeks Google will simply delete them from your account.
Google expects to gradually implement the changes over the next few weeks. Once changes have been implemented, Google will email you and post an announcement in your account.
Kamangar said that Google expects that the changes will benefit both advertisers and users.
Marketers Rejoice! ClickZ has launched ClickZ Live, an educational series to bring you innovative online marketing strategies and techniques. Learn to construct and successfully execute multi-channel marketing campaigns, plus identify key metrics and translate them into actionable plans.
Thursday, July 18: ClickZ Live will be in Vancouver, BC. Register before July 1 to save $100!