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Google AdWords Pricing Change Goes Into Affect
8/15 1:00pm PT
poster_boy




msg:1144554
 8:26 pm on Aug 15, 2005 (gmt 0)

I guess it just went through... refreshed and this appeared.

Message:

We've simplified our keyword status system.
Your keywords will now either be active (triggering ads) or inactive (not triggering ads). Quality remains the most important factor in your keywords' performance. Each keyword will now have a minimum bid that is based on the quality of your keyword and ad text. If your maximum CPC doesn't meet this minimum bid, your keyword will be listed as inactive.

What you should do differently:
If a keyword is listed as inactive, improve its quality through optimization, delete it, or raise that keyword's maximum CPC to the minimum bid indicated. (Raising the bid will re-activate the keyword.) If your keyword is active, you don't need to do anything.

 

dave741




msg:1144584
 2:46 pm on Aug 16, 2005 (gmt 0)

Then it is the VERY bad news.

uioreanu




msg:1144585
 2:49 pm on Aug 16, 2005 (gmt 0)

raising 5 cents to 10 the min bid price will cut away the small advertisers around. long tail economy is great in theory, but maybe is be less effective in the cpc area. Low margin, high-volume sales probably requires a more mature CPC market. hopefully things will keep diversifying

sailorjwd




msg:1144586
 2:55 pm on Aug 16, 2005 (gmt 0)

I didn't try adding new keywords but I did try to adjust the bids to the mininum level for about 10,000 keywords. According the Active/Inactive status a majority of my keywords stayed active below 5cents and a handful were ok at 1cent. In many of these cases I'm either the only advertiser or one of a few.

However, as I mentioned earlier, they took away the new interface while I was doing this. At that point I went to G search and tried to find some of my ads - no ads showed. I used the tool to see why they weren't showing and all said they were below the minimum CPC set by the system. But I suspect and hope that this was the old interface/programming logic telling me this and that the new system would allow 1cent bids for unique keyword phrases.

As for the 10cent bid on new keywords - perhaps the system would allow you to lower the bid after it gets some history on the new keyword. But I sure would rather they had a 5cent starting point rather then 10.

WebFusion




msg:1144587
 3:04 pm on Aug 16, 2005 (gmt 0)

We are now protected with whatever happens on the AdWords side. If costs go up our AdSense will go up. If bids go down then our AS revenue will go down but in all cases it will be a push.

There is no way on earth you could know that. What's to stop google from paying out a smaller percentage of the higher bids to adsense publishers. Talk about pie in the sky thinking.

Whatever spin they wish to place on this - this is not being done to improve the "user experience" of the advertisers but to increase revenue. Paying out the same percentage of that increased revenue would not hlep google's bottom line much - which is why I believe we'll see our collective adsense checks stay roughyl the same, while google keeps a larger cut of the pie for itself.

Personally, I think this is just the tip of the profit-seeking iceberg for the big G. Let's face it, the only way they can prop up their over-inflated stock price is to keep boosting revenue/profit. The only was to keep doing that is to:

a. Invest in additional revenue producing companies
b. Increase margins on their only existing income stream

Until they do (a), expect to see alot more of (b).....or did you think that shoe-horning a third adwords link at the top of the serps was to improve user experience?

inasisi




msg:1144588
 3:30 pm on Aug 16, 2005 (gmt 0)

Tropical Island,

I do like your strategy of taking a hedge on the rise in prices by being Adsend customer too. But one flaw in this is that you are assuming that Google will be willing to pass on the increase in Prices to the publishers. But given the recent acts of greediness by Google and the lack of competition on the Adsense front, I really doubt whether Google would do it.

Another thing that I am not liking about Google is the haughty attitude they took up when they tested this new system on us without clearly informing us of it. Luckily I got to know from this forum that Yesterday's change was only a trial run and hence didn't do much change. Otherwise I could have spent hours on changing my CPCs and would have been really pissed if I didn't see those changes today. At some point in time, both the old system and the new system was in place simultaneously, making me go mad. I would see a few words with Inactive status. If at that time I deleted the old Disabled Keywords and added them back, they would still go back to Disabled status.

Google Engineers: grow up and act professional. We're paying money for all of this and hence demand not to be treated like Guinea Pigs.

DavidDeprice




msg:1144589
 3:43 pm on Aug 16, 2005 (gmt 0)

no, business is business. If overture has a minimum of 10 cents, why Google can't? Plus, if the Yahoo Content Network has a minimum of 10 cents (which I don't know for sure, but it's a logical guess), then Google will be forced to up the bids, otherwise all the publishers will migrate to Yahoo as soon as the testing is over and the program starts to work.
The big question is will the 10 cent bid minumum (for new keywords in new algo) ever go down based on your ad performance or will you be locked in that price range?

Tropical Island




msg:1144590
 4:43 pm on Aug 16, 2005 (gmt 0)

There is no way on earth you could know that. What's to stop Google from paying out a smaller percentage of the higher bids to adsense publishers. Talk about pie in the sky thinking.

...you are assuming that Google will be willing to pass on the increase in Prices to the publishers.

Both your comments are well taken however I think you may be missing the point of the post I made.

Before March all our AdWords costs were "out of pocket". We are now at a stage where our costs are covered.

I may be naive in thinking that Google will not pass on the increases to it's publishers however the bulk of our costs will be covered. My suggestion was that those who do not have AS should consider it as a hedge against increased costs.

Also WebFusion - I took your comment as being a little harsh and uncalled for.

gopi




msg:1144591
 4:46 pm on Aug 16, 2005 (gmt 0)

>> If overture has a minimum of 10 cents, why Google can't?

Because there is a whole universe of keywords (i guess almost 25-30% of search volume) which are profitable *only* at <10 cent bids .If you want proof just check overture and google for non-commercial/informational type keywords ,in many cases overture will have no bids but adwords have many.

IMHO leaving the minimum bid price to market forces rather than a computer algorithm is in the best interest of both the advertiser and the search engine.

davewray




msg:1144592
 4:58 pm on Aug 16, 2005 (gmt 0)

When the new system comes into play I am NOT touching my bids. Even if 90% fall below minimum bid criteria. Why? Because I've spent days figuring out my optimum max bid amount and the best possible ROI I can glean from that bid amount. Google will NOT force me into a bidding war so I can reduce my profit and ROI. I will look elsewhere because I know that there are alternatives and places where I can get a better ROI anyways. If Google thinks they are going to make mountains more money then they are deceived because by shutting out the "smaller" guy they will lose thousands upon thousands of advertisers.

Dave.

DavidDeprice




msg:1144593
 4:59 pm on Aug 16, 2005 (gmt 0)

Yeah, but that's not Google's problem. Overture charges 10 cents and does not care if the keyword is profitable or not.
My guess is that there is at least a remote possibility that price for some (noncompetitive) keywords will eventually do down, but so far it looks like the algo change was done to give Google a legit reason to hike the prices to 10 cents.

gopi




msg:1144594
 5:05 pm on Aug 16, 2005 (gmt 0)

>> Yeah, but that's not Google's problem.Overture charges 10 cents and does not care if the keyword is profitable or not

David , if a keyword is not profitable then no one is going to bid on it. Its better to have a 5 cent bid ad rather than no ad at all.

Tropical Island




msg:1144595
 5:13 pm on Aug 16, 2005 (gmt 0)

David , if a keyword is not profitable then no one is going to bid on it. Its better to have a 5 cent bid ad rather than no ad at all.

Absolutely correct. In our niche many of our competitors disappeared from Over when the price went up. There are many keywords that we still have at 5 or 6 where we are the only bidders.

bostonseo




msg:1144596
 5:54 pm on Aug 16, 2005 (gmt 0)

5cents and 10cents keywords? That must be nice!
Our average cpc on Google is $4 and only going higher every day.

jbgilbert




msg:1144597
 6:19 pm on Aug 16, 2005 (gmt 0)

Well.... seems we are now hearing that the minimum bid requirements may be quite high! Surprise... Surprise...

Remember this thread [webmasterworld.com...]

AWA said:
...... Keywords that have a high Quality Score will have a minimum bid as low as USD $0.01. Keywords with a low Quality Score will have higher minimum bids, but the majority of keywords should not see an increase in the minimum bid required to show on Google (currently USD $0.05).

and like I said in that thread:
Yeah.... sure.... I'm supposed to believe that when I log into all my accounts after the day of the change I'll see no "minimum" bid requirements that force me to raise my bids by significant amounts? I would love to be wrong on this one!

If the change is as fair as Google is telling us it will be, this could be a positive change!
Put another way....
If (that's IF) the change is as fair as Google is telling us it will be, this could be a positive change!

Sooooo..... to those who have the new system, tell us:
- Just what kind of minimums are you being hit with?
- Give some examples (not too specific of course)?
- Help us who do not yet have the new system determine what we will be facing?

[edited by: jatar_k at 1:13 am (utc) on Aug. 17, 2005]

DavidDeprice




msg:1144598
 6:24 pm on Aug 16, 2005 (gmt 0)

what I you selling? "PPC solutions for asbestos lawyers in need of mesothelioma treatment while they are on a sea cruise?"
While 4 bucks a click is normal for generic term in many industries (like home loans), you can easily lower it by bidding on more specific terms.

dmerton




msg:1144599
 6:27 pm on Aug 16, 2005 (gmt 0)

jbgilbert,

It's rediculous. I have keywords that get 8.1% CTR, 10.5% CTR, 25% CTR!, minimum bids... doubled!

I might not mind as much if my they were asking me to increase my ad spend by 10 or 20% but that is not the case, they want a 100% increase on many of my keywords.

Thanks Google.

"Do No Evil"

[edited by: dmerton at 6:34 pm (utc) on Aug. 16, 2005]

DavidDeprice




msg:1144600
 6:28 pm on Aug 16, 2005 (gmt 0)

The new minimum is 10 cents - that absolutely true for every NEW keyword you add.
The phrase "Keywords that have a high Quality Score will have a minimum bid as low as USD $0.01." now totally makes sense - new keywords can't have high Quality Scores by definition thell be either 0 or average, so you'll be forced to start it at 10 cents and maybe, just maybe, you'll be able to get it down to 1 cent later on if your add performs well.

da_clicks




msg:1144601
 6:30 pm on Aug 16, 2005 (gmt 0)

Question for everyone:

This is related to an account that is currently paused but has a long, established history with its keywords

Are these keywords considered "inactive" or when we go back live with our keywords, will they be considered active based on the account history?

We advertise a seasonal product, and currently we are not in season so they campaigns are paused. However, in season, we spend lots and have many keywords that are under .10 but have a good CTR.

Because our ads are currently paused in the "off-season" will these be considered "inactive" and possibly be required to have a higher minimum CPC with the new rollout?

Or are paused ads with established history still considered active?

Anyone wanna share their thoughts?

Paul_N




msg:1144602
 6:43 pm on Aug 16, 2005 (gmt 0)

All my minimums are multiples of 10 cents. I hate the way such a generic amount is used. It's like they're saying "we think you should start paying this much" with no regard for the market.

The messages say "Increase quality or bid to $0.** to activate"

In my experience of my niche, the bid being asked will put my ad on the first page. And how will competitors react to that? Raise their bids!

da_clicks




msg:1144603
 6:44 pm on Aug 16, 2005 (gmt 0)

dmerton,

So, are you saying you have active keywords with those types of CTR's that had an increased minimum bid when you reviewed them while the beta was live?

DavidDeprice




msg:1144604
 6:53 pm on Aug 16, 2005 (gmt 0)

No it's not true - the bids for all active keywords stayed the same

RedMist




msg:1144605
 7:01 pm on Aug 16, 2005 (gmt 0)

If customers are clicking on ads because they are reading the ad text and are interested in learning more, then it is good ad text that determines the CTR and a big part of the Quality Score.

If I decided to copy someones ad text word for word, shouldn't I get their CTR and Quality Score? If I use their ad text, then I should be allowed to use the same low cpc that google lets them use since the ad is the exact same.

dmerton




msg:1144606
 7:04 pm on Aug 16, 2005 (gmt 0)

da_clicks,

Yes I had several keywords, with said CTRs that google had set to inactive and i was shown the link "Increase quality or bid to $0.** to activate"

Interestingly, or inconsistantly I should say, I had some keywords with lower CTRs that remained active and unchanged.

DavidDeprice is right, keywords that remained active did not incur a bid change.

da_clicks




msg:1144607
 7:13 pm on Aug 16, 2005 (gmt 0)

dmerton,

That is the scary part. If one has active "well-performing" keywords with good CTR's and google can still inactivate the keyword and state a new minimum CPC - how does this help any advertiser?

Hopefully this isn't going to be the case.

markus007




msg:1144608
 7:19 pm on Aug 16, 2005 (gmt 0)

bidding on my domain name now costs $5.00 hahahaha

scalisto




msg:1144609
 7:20 pm on Aug 16, 2005 (gmt 0)

So, finally after all the obfuscating language and encrypted explanations the message turned out to be simple one:

"We want more money from you and we want it now!"

holyearth




msg:1144610
 7:23 pm on Aug 16, 2005 (gmt 0)

This is how I feel,

If you had an irrelevant keyword you couldn't use it...but NOW...you have to PAY the google empire big bucks to have that keyword back...

so how does that make the search relevant for the user if a keyword that was previously inactive now becomes ACTIVE because an adwords advertiser paid more?

This is BULL!

gopi




msg:1144611
 7:24 pm on Aug 16, 2005 (gmt 0)

>> the bids for all active keywords stayed the same

Many of my keywords with normal status in the old system showed up as inactive in the new system with suggested minimum bids twice the original. Some of this keywords have double digit CTR and i am clueless how i can further increase the quality :).

>> All my minimums are multiples of 10 cents
I noticed that too!

inasisi




msg:1144612
 7:43 pm on Aug 16, 2005 (gmt 0)

The Pricing Change is again active for me but I am not going to touch them till someone can confirm that this is really it.

Frequent




msg:1144613
 7:44 pm on Aug 16, 2005 (gmt 0)

Well I finally got a taste of the new system. Just using one small campaign as an example (3 dozen keywords) I had a handfull go "inactive". Of these inactive keyword one was a good performer (16% CTR) and the system now requires me to raise my bid by 25% to get it running again (which I did). The other keywords were marginal performers (barely staying active) and they require me to raise my bid by 400 to 500% to get them active...(no way!) Can't say as I'm thrilled but it could be worse considering that the vast majority of my keywords do not seem to be affected.

Freq---

DavidDeprice




msg:1144614
 7:48 pm on Aug 16, 2005 (gmt 0)

Wow, it's active again, so we get to pay with it one more time.

This 396 message thread spans 14 pages: < < 396 ( 1 [2] 3 4 5 6 7 8 9 10 ... 14 > >
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