August 10th, 2007
Breaking! Google changes formula for top ad placement
Topics: Google, Google Adwords, Internet Marketing, PPC
Ok here’s a breaking news, I just found out from my adwords account that Google is changing its formula for top a placement on adwords. Here’re the details from Google:
In the coming weeks, we’re improving how high quality ads are selected for top positions above Google search results. This change is designed to improve the quality of our ad results, and to give you more control over achieving top ad placement.
The core components of the top ad placement formula will remain price and quality. However, we are improving the way we factor price into the formula. We’re also adjusting the way your actual cost-per-click (CPC) is determined for ads in top spots. As always, only ads that meet our stringent quality requirements will be eligible to appear in top spots.
What are the details?
In the current top ad placement formula, we consider your Quality Score and your actual CPC, which is determined in part by the bids of advertisers below you. Even if you have a high quality ad, if advertisers below you are not bidding very much, your actual CPC may not be high enough to qualify your ad to appear in a top position.
With this new formula, instead of considering your actual CPC, we’ll consider your maximum CPC bid, which you control. This means that your ad’s eligibility to be promoted is no longer dependent on the bids of advertisers below you. Therefore, if you have a high quality ad, you now have more control to achieve a top position by increasing your maximum CPC.
Your actual CPC will continue to be determined by the auction, but subject to a minimum price for top spots. The minimum price is based on the quality of your ad and is the minimum amount required for your ad to achieve top placement above Google search results. As always, the higher your ad’s quality, the less you will pay. And you will never be charged more than your maximum CPC bid.
How might this affect me?
We anticipate that most of your ads will continue to perform as they have in the past. In some cases, you may see that ads previously shown alongside search results are now shown in top spots, and vice versa. As a result, you may see a change in the average number of clicks and average CPCs for impacted ads.
I think this is a great move by Google and will further ensure higher quality ads to achieve the top placement. The problem, however is, do you REALLY want top placement - which typically attracts tons of low quality click?
Let me know what you think about this new change in the comment section!
Technorati Tags: Google, PPC, adwords, internet marketing, adwords consultant

