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

 8:26 pm on Aug 15, 2005 (gmt 0)

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


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.



 2:45 am on Aug 17, 2005 (gmt 0)

Time was we spent over $900 every day at Google, all at the minimum 5 cents. Now it's down to bout $300 and it looks like this is gonna run us right out of our current business.

Fact is there are considerable # of highly searched keywords, like "jokes" for example, that will not support even a nickel bid. We had hoped this change would benefit everyone ... after all, why see all that waste ... isn't a penny or two better than nothing at all?

I remember the good ole days when we bought tons of traffic at GoTo (overture) for a penny a visitor.

Well, I for one hate to see it happen, but no use cryin over spilt milk. I guess it's time to move on to other things.

Chin Up
:) :) :)


 3:19 am on Aug 17, 2005 (gmt 0)


Anyone else having this problem:

I use the tool to set all ads to the recommended minimum value for a particular campaign and it simply does do about 60% of the words. They are left inactive.

Updates using the tool are not working!


 3:34 am on Aug 17, 2005 (gmt 0)

I'd just love a button that sets all keywords in an ad group to minimum required cpc!

I just entered 100 keywords into a new ad, with a min cpc of 0.10, and half of them needed to be raised to 0.20 or 0.30 or 0.40 for them to run. The only way to do so is manually...

Such a button would be in Google's best interest.

The need for such a button is obvious to me after 1 hour of testing the new system. So how much real user testing did Google do?


 3:40 am on Aug 17, 2005 (gmt 0)

Wow - google really raised the prices through the roof. I'm seeing an average of 80% increase on almost every keyword for every Ad. My average bid before was between 25 and 50 cents. Most of those words are 1 dollar to 5 dollars. There are even misspelled words that they are asking to increase to $1.00. Feels more like a daisy cutter greed strategy than some fancy algorythm to recover use of disabled keywords.

Its upsetting for me because with 11 campaigns, 20 ads and around 1500 keywords, I am just getting started with google and getting the hang of it. I was seeing click-throughs from google on to my landing pages and beginning to improve those pages so visitors would click through toward conversion, but embarrassingly enough hadn't gotten one conversion. (Even though I have spent a fair bit of money with google and hadn't earned any, I remained optimistic that I eventually would, if I kept improving everything.)

My site has 1000 users paying an annual fee between $50 and $100. It has been growing at 25% per quarter but some months still going in the hole- debt service, google fees and so on- so the google increases aren't really good news here.


 3:46 am on Aug 17, 2005 (gmt 0)


Use the Find and Edit Max CPC tool under the tools section. One of the option is "Increase each keyword's Max CPC to the recommended minimum bid."


 3:49 am on Aug 17, 2005 (gmt 0)


I used that tool but it didn't change about 60% of my bids. Perhaps it will not set a bid below 5cents even though the recommended bid is 3cents.


 4:29 am on Aug 17, 2005 (gmt 0)

After fiddling and adjusting bids for an hour I've decided that there are simply no changes that are worth while.

The recommended bids have little logic to them.

I see words I used to bid 5cents on and was always #1 because no one else bids on the term and now the minimum bid is 20 cents.

In other cases I have bids of 20 cents which leaves me 30th average position but minimum bid is fine at 20 cents (or lower).

After no changes I've lost about 2% of my keywords and I rarely got clicks on those anyway.

And, I guess most of you found out, even if the mininum bid recommendation is 2cents you can't set it to that value if you want the keyword to show in the search results. I don't know if they would show in content network.

I guess this change affects us bottom feeders much less than focused, high value keyword campaigns.

I find this whole programming change to be a major waste of my time and G's.


 4:30 am on Aug 17, 2005 (gmt 0)

Beware searching for inactive keywords using the "Find & Edit Keywords" tool. It's clearly inaccurate.

I thought I'd eliminate some inactive keywords based on 0 impressions or clicks for all time. It returns no items, even though many, if not most of my inactive keywords fall into that category.

Hard to say what else in there isn't working right too.

Remember, we're testing in the production environment here. Something I would have been hung for if I tried it in the more humble programming shops I've worked in.


I've also noticed that the keyword phrases that it wants absurd bids on are those that contain one word that in another context would be considered "high value". Even though I'm using the word in a 3-5 word phrase that has nothing to do with the meaning of that generic word when used by itself.

A contrived example would be a term like "star wars". By itself, it probably commands a high bid. However, if you advertise "star wars 1983 obscure vhs movie", they want that high bid. An earlier poster mentioned something similar when trying to use the names of musical artists in a targeted context.

That part is a shame, because these are targeted phrases that traditionally would never be worth more than a 5-10 cent bid.

Examining the words that have been rendered 'inactive', I see that trend a lot. The new algo doesn't appear to be particularly intuitive when assessing the individual keyword phrase. Seems like it's going by more general guidelines.



 4:57 am on Aug 17, 2005 (gmt 0)

the new system i think is great... i dont know if anyone is in the mortgage and financial industries but Google is giving people way more control... before i could raise my bid to 50 bucks per click in mortgage category and google still wouldnt enable me kw's i had 90% of my kw's on hold now many are active at even .05-.10 cents!

also this change allows you to literraly buy inventory anywhere on google and its network just by changing ur price... no more guessing games whether or not your kw's will go on hold or in trial.... this is great for affiliate marketing and other things where you need to know your metrics. this will allow you to really now how full control and gain access to their 10 mill people just by increasing your bid!

wuOTTT to google!

Import Export

 4:59 am on Aug 17, 2005 (gmt 0)

The AW team has logic behind these changes. Those who need to stay open minded and think about the changes more are the "emotional webmasters"...


 5:20 am on Aug 17, 2005 (gmt 0)

I Thought this change would be great. I thought it would allow me to continue to advertise on keywords that were below min CTR. Well I can, but know google has increased minimum bid on basic Keywords to $1 to $10. This are not special keywords. Since i only have a 50% profit margin this is horrible. 99% of my keywords are now inactive and i can't afford to increase the bids.


 5:21 am on Aug 17, 2005 (gmt 0)

Like all of the major changes Google has made over the last two years since I've been in this game it always takes a few weeks for the equilibrium to set in......

My observations on today so far. I target mainly the Content network. Over the last 6 months my daily CPC has been right at .28 to .29 . Today it is at .31

However, converstions seam to be higher than normal today....

I actualy had a very good day as far as my ROI....

Lets see how it goes the next few days / weeks.



 5:37 am on Aug 17, 2005 (gmt 0)

I think this change works for those that have a business model that relies on some level of traffic.

This will probably crush the "Google Cash" types that have been riding the arbitrage for so long buying Google traffic and selling much higher bid Overture clicks or buying cheap clicks to landing pages that offer Adsense ads for mortgages.

My vote so far is this is positive. I never cared for some black box deciding if I could bid on a keyword or not...


 8:27 am on Aug 17, 2005 (gmt 0)

I think it's amazing how they can charge $0.50 min for a keyword that no one else is bidding on!


 8:28 am on Aug 17, 2005 (gmt 0)

Did anyone note an official starting time for the new system? Would be helpful to me and appreciated.




 8:45 am on Aug 17, 2005 (gmt 0)

THE ALGO IS NOT FINAL! Or there is an error. I have a bunch of inactive keywords, but when I search for them in Google, my ads still show up! That's good, at least for now.


 8:53 am on Aug 17, 2005 (gmt 0)


for google to be able to reactivate keywords based on changes to ad copy etc they need to let "inactive" keywords run occassionally, I read that somewhere in the adwords help pages. So Im guessing at this inital stage many of our inactive keywords will actually run, hence some people have seen inactive changed to active without changing anything.



 9:28 am on Aug 17, 2005 (gmt 0)

THE ALGO IS NOT FINAL! Or there is an error. I have a bunch of inactive keywords, but when I search for them in Google, my ads still show up! That's good, at least for now.

That's good for you but I've the opposite situation - a bunch of active keywords but ads MIA!

That's bad for me :(


 9:29 am on Aug 17, 2005 (gmt 0)

I would call the suggested price "insane".. for a keyword, where I am the only bidder, google is now suggesting me to increase the bid to $1.00. And they have done that for 8% of the keywords in the adgroup.
I am glad that ask Jeeves started their program few days ago and MSN is starting theirs next week.


 9:39 am on Aug 17, 2005 (gmt 0)

i have this keyword that i run for $.05 and it has 30% CTR

google inactivate it and now wants me to pay $.25.

so this new change is suppose to give us more control & reach more customers huh? nice...


 9:56 am on Aug 17, 2005 (gmt 0)

I'm strictly AdSense, and find this thread very interesting. Yesterday I had a new record both for number of clicks and daily earning, so I'm having a hard time keeping my arms down. Most of the ads on my sites have been quite well written since I started with AdSense, so it's pretty much the same ads I still get. One thing I've noticed, though - the "Thai Kai's Novelty Store" kinda ads are gone. Another reason be be pleased.

As a publisher I have signed up with Yahoo to find out more about what they are ready to offer me, because what I've seen of 1 cent clicks is ridiculous - why would I want to send good, targeted traffic to anybody who do not want to pay a fair price for it?

And the ad copy on some of those ads - you really get a sense of dealing with people who have little idea how to write good copy. The ad copy reflects on my site as well, as it is the one showing them and consequently in some way legitimizing them, so I regularly block the worst cases, in spite of what they might pay. A lot of AdWords people really need to sharpen up and realize that getting the exposure on a site isn't enough, you also need to create interest in your product in order to get both good traffic and a good ROI. That is in both publishers' and advertizers' interest.

I'm still waiting to see how things develop, but Yahoo looks somewhat less interesting at the moment.


 11:48 am on Aug 17, 2005 (gmt 0)

About inactive keywords showing.

I was just looking around my adgroups. I notice that I am getting many impressions this morning on keywords that went inactive yesterday.

I am also getting clicks on these inactive keywords - here's the problem - I'm getting charged whatever the recommended minimum bid value is! even though my max CPC is set much less. This is happening on 100's of inactive keywords.


 1:05 pm on Aug 17, 2005 (gmt 0)


Is it possible that the clicks were received before the keyword went active? But with the time delay they didn't show up until after the words were de-activated?


 1:13 pm on Aug 17, 2005 (gmt 0)

I have tons of keywords that had been running in position #1 for which the bids are now below the minimum. It looks like an algorithmic way to force up bids on uncompetitive keywords.


 1:57 pm on Aug 17, 2005 (gmt 0)

Just adding to the rich tapestry of chaos here...

I have tons of keywords that had been running in position #1 for which the bids are now below the minimum.

I have kw's that had been in an avge pos of 1 - and for which the bids were minimum (GBP) - that now require a 50% increase. Likewise, niche market highly specialised kw's now require an increase in spend of 275%.

Half our adwords presence has been wiped out - unless I'm able to justify the immediate doubling of the company ppc budget in order to get us back to where we were just a few days ago...

(Reminds me of the stories still told in the UK about the introduction of the decimal currency!)



 2:24 pm on Aug 17, 2005 (gmt 0)

In principle I find these changes welcome. I recently gave uip advertisng using adwords because my keywords were continually being assesed as inactive, even though I was prefpared to pay high CPCs to get customers. I would look at the number of clicks/day which was in the thousands, but my keywords were made inactive so I wasn't getting anything. Instead of starting with a flood of customers that I could then filter down to match my budget I found myself having to drag each customer out of Google drop-by-drop. It was extremely time consuming and frustrating. I hope this new system will fix this problem.

Anyway, my question: I understand that you can make inactive keywords active by raising the CPC. What about Disabled keywords (I have quite a few still showing in my account)? Can they be revitalised too?


 2:49 pm on Aug 17, 2005 (gmt 0)

It doesn't matter what the suggested price is. If nobody else is bidding on the niche keyword, go ahead and match the price. What you will find is that the discounter will still kick in regardless of max bid price. You will see you will still be charged minimal amounts. For example, i had several keywords at 5 cents now suggested at $1. I know nobody else bids on the words. As an experiment i matched the $1 on one keyword and they charged me 4 cents per click. Then i did it will all my disabled words and the same happened with some as low as 2 cents. So you should all quit freaking out about the max bid they suggest. If you in a niche with few advertisers, you will still get low clicks despite what they want. Anyhow, after 1 day, i readjusted my max PPC back to 5 cents and all the keywords are still active so it was really and algo spike. It will all level out in a few days.


 2:58 pm on Aug 17, 2005 (gmt 0)

Great post, momotan. Anyone confirming this observation?


 2:59 pm on Aug 17, 2005 (gmt 0)

So far we really like the change. Have not full analyzed this yet, but so far CPC is down 16% with normal traffic flow.


 3:01 pm on Aug 17, 2005 (gmt 0)

I am sitting here almost 36 hours later and this change has apparently not hit the adwords servers I am on as yet.

Anyone else seeing same old, same old?


 3:05 pm on Aug 17, 2005 (gmt 0)

What you will find is that the discounter will still kick in regardless of max bid price. You will see you will still be charged minimal amounts.

I'm assuming you mean the min bid price.

According to the AdWords presentation a few weeks ago, this should not be happening.

You'll be charged the greater of the minimum CPC for that keyword, or what you need for that position based on the other advertisers.

Thus, if the min CPC is $0.30, you will be charged $0.30 per click even if you're the only advertiser.

This info is based on a Google presentation, however, all those rules are subject to change ;)

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