Google announced on Friday that they were changing the algorithm that decides which ad words ad gets the top ranking spot when it serves them up on search results pages. It has been a mix of the past performance click through rate of the ad (quality score), the bid price of the ad and the keyword match and relevance in the ad copy to the keyword or phrase searched. Google announced that they were changing the cost weighting in that equation to use the max bid you would pay rather than the bid you actually are paying.
Google says that this improves the search results that a web searcher gets and that is why they are changing it. They say that this allows advertisers to achieve more control over attaining the top ad placement and that means quality results. A lot of people know this is completley false and it is that Google wants to incite people to bid higher on ads and get bidding wars warmed up again for hot popular keywords. All this bidding competition increases revenue just in time for Q3 and Q4 company results. So, it’s the equivalent to any media property raising it’s advertising rates.
What does that mean for advertisers? It means that the person who is willing to set the highest maximum bid for a keyword ad slot will be likley to attain it. Click through rate and relevance of the keywords in the text ad and on the landing page of the site you click through to will be less important in the algorithm. Will this actually serve more relevant ads to the searchers? NO! There are many companies willing to spend $5, $10 or $100 dollars a click just to get people to their site. They will buy keywords that are relevant to their site and product and if that isn’t enough traffic or sales, they will buy a bunch of keywords that don’t relate to their product but have high search volume and then phrase the ad to look like it is relevant and bid an enormous amout to get the top spot. And Google does not prohibit or prevent this.
Why is the top spot so important? In Google and Yahoo PPC text ads the top spot gets the most clicks by far. (only top organic listings get more) and every company knows getting to that spot gets the most traffic to their site. So, someone who is uber aggressive and has a huge sales goal and no scruples, will bid up to the moon and pay whatever they can, because even if .01% convert and buy what they are selling they will still probably make a profit.
It sounds nuts, and it is to an extent. Google is removing barriers for ad serving like this flat world globalization that is happening. Making the bid price rather than the max bid the number used in the algorithm gave the advertiser less control over where their ads served. Which means they were held back from a lot of deceptive and aggressive marketing tactics. But removing that proves that Google is going to continue to be less about quality and more about money as time goes on. They changed the face of advertising and online media because of relevance and good affordability. Now that we have come to expect that from them, and are slightly addicted, they are renigging on the deal.
Apparently it was time to feed the Google Monster. Grrrr….