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Google Simplifies & Loosens Requirements for AdWords

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Google is making changes to its AdWords program intended to provide advertisers with more control over campaigns while potentially improving relevance for users.

A longer version of this story for Search Engine Watch members offers suggestions of next steps to take for advertisers, including how to deal with campaigns that Google has disabled that may automatically reactivate under the new system. Click here to learn more about becoming a member.

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.

Kamangar said that Google expects that the changes will benefit both advertisers and users.

Want to discuss or comment on this story? Join the Become.com Crawler Out on the Prowl discussion in the Search Engine Watch forums.

A longer version of this story for Search Engine Watch members offers suggestions of next steps to take for advertisers, including how to deal with campaigns that Google has disabled that may automatically reactivate under the new system. Click here to learn more about becoming a member.

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