Google AdWords Scraps Minimum Bid Requirement
Google AdWords Scraps Minimum Bid RequirementAug 27 2008 - PPC - Farhad Divecha
Google is introducing changes to the Quality Score metric used to determine the position of AdWords ads. The new system will calculate Quality Score live, at the time of the search query, replace minimum bid requirements with ‘first page bids’ and will no longer mark keywords as ‘inactive for search’.
More Accuracy to Quality Score: So far the per-query Quality Score was a static pre-determined factor, but will now be made variable. The ad’s quality and relevance will be adjudged each time it matches with a search query. Through this system, AdWords will be able to select the most appropriate and relevant ads for display. This should be a win-win situation for both users as well as advertisers, as users will get to see only the ads which are most accurately matched with their keywords, while advertisers will receive highly qualified leads.
Keywords will no longer be inactivated: With this new quality scoring system, keywords will not be marked as “inactive for search” in the advertisers account. All keywords will now be capable of relaying the ad on Google web Search and the search network, unless the advertiser chooses to pause or delete a particular keyword from his account. However since it is likely that the previously inactivated keyword did not have a very high Quality Score and bid, it is doubtful if it would now be capable of generating much traffic.
Minimum Bids to be replaced by First Page Bids: It is expected that first page bids, will be a more effective tool than minimum bids. As the name suggests, First page bids would give advertisers an indication of the amount required to get their ad to reach the first page of search results. The bid will be based on the closeness of the match with the keyword used the Quality Score, and the extent of competition on that keyword. The first page bid should help advertisers to get a good idea of the bid required to get the ad placement they are looking for.
The effectiveness of this new system will of course vary between advertisers. While some may find a substantial change, others may find no significant change. At present Google is working to update the AdWords API and AdWords Editor, to support first page bids, and till that is done, minimum bids will continue to show up, based on the per-query Quality Score.
Google will inform advertisers when these changes are finalised.