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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.

 

Voxman




msg:1144734
 10:57 pm on Aug 17, 2005 (gmt 0)

I Just had this great idea for a boycott.

What if all the people who are not happy with this pause their campaign for a day. That's what I just did. If enough of us did that even for an hour or so we'd hit them in the pocket book which is all they understand.

I'm going to keep mine off all evening and do it again tomorrow night as well.

It's all we have to use in this fight... or we can just roll over and die because I bet you the ads will keep going offline and the minimums will keep increasing

jotafk




msg:1144735
 11:07 pm on Aug 17, 2005 (gmt 0)


I just had a shock today.

Yesterday I changed two of my Ad Groups to $0.04 and I was really happy because the system accepted it.
Today I woke up just to find out that even though the kw's are active I could not see my ads!
Only when I switch the Ads back to 5 cents they began showing again on the search network!

Anyone can confirm this?

setheus




msg:1144736
 11:32 pm on Aug 17, 2005 (gmt 0)

"What if all the people who are not happy with this pause their campaign for a day."

pause for a day? soon we'll be able to just delete them all and give our advertising dollar to other PPC. overture is now cheaper for many of our keywords. yahooSense is almost here. MSN ppc & MSN keywords are coming soon. goodbye google.

surf4soul




msg:1144737
 11:48 pm on Aug 17, 2005 (gmt 0)

does anyone know what msn ppc minimum will be? I hope its .05cents

AdWordsAdvisor




msg:1144738
 11:52 pm on Aug 17, 2005 (gmt 0)

Hi again,

Now that I have a little more time to focus, I wanted to answer some of the questions that have come up in this thread so far. I think the answers to these will be of general interest. Rather than make this a really long post, I'll just answer a few for now, and then get to more of them later.

Earlier, jotafk asked:

the question is: how are these minimum bids determined? based on what?

Good guestion. To paraphrase the Help Center ( [adwords.google.com...] ):

* Each keyword now has a minimum bid that is based on the quality (also called Quality Score) of your keyword specific to your account.

* Quality score is determined by your keyword's CTR, relevance of ad text, historical keyword performance, and other relevancy factors.

* The higher the Quality Score, the lower the CPC required to trigger ads, and vice versa.

inferno said:

i would also wager that this new minimum bid system is dynamic rather than static, meaning if the keyword is rated poor with a minimum bid of say 30 cents, and you buy it and get a ctr of say .001%, then they can just say, ok, if you want to stay, your minimum bid must now be 50 cents, and so on.

Yes, this is possible (although I would substitute Quality Score for CTR). Please note, however, it is equally possible that if the targeting between the ad and the keyword were improved then the Quality Score would likely improve, and the minimum bid would then go down.

A key point regarding the new system: it is very much to the advertiser's advantage to advertise in a very targeted way, as they'll likely pay less, while also getting the more qualified customers that targeted advertising brings.

gc43 said:

I have been deleting and re-adding the "disabled" keywords as instructed to do so. Most of them reappear as "Active" which is very cool, but some of them stay disabled no matter how many times I try.. any ideas? anyone seeing the same thing?

Thanks for the heads up, gc43. This is a glitch, and should be resolved shortly. My apology for the annoyance.

Inferno said:

...i have bid on keywords that are variations of my company name, for example, hypothetically if my company name was

Joe-Bobs Widget Emporium, i bid on
all the variations of that, like [joebobs blah blah] [joe-bobs bla bla] etc, however some of these are costing me 30 cents a click.....30 cents! no advertisers, not too many searches, and yet, 30 cents a click! i just would like a response on this particular case if you would.

inferno, the essential reason for this is that the variations you've mentioned are being seen by the system as having a low quality score, which means that the minimum bid to will be higher. (And by the way, thanks for your kind words earlier.)

Whether other people are bidding on the same keywords is not an important factor in evaluating the quality of your keyword/ad. What is important is the targeting of the variation to the ad that it brings up. And the better the targeting, the less the minimum bid is likely to be.

OK, this is getting pretty long for one post. So, more in a bit...

AWA

[edited by: eWhisper at 1:14 am (utc) on Aug. 18, 2005]
[edit reason] Fixed URL [/edit]

outland88




msg:1144739
 11:58 pm on Aug 17, 2005 (gmt 0)

I tell you what I find funny. Under about ten keywords I do business under there are no ads now, when previously there were dozens of ads for each keyword. My speculation is that Google is now quoting differing rates to each advertiser and they arenít biting. Keywords without advertisers donít make money. Plus a lone advertiser under a heavy traffic word could get pounded on.

Could it be Google has overestimated its ability to raise rates when its core purchasers were looking for cheap rates to begin with. The columns will fill up with ads eventually but can Google afford a quarterly loss. Once stockholders see a drop in earnings that stock could nose dive.

syber




msg:1144740
 12:03 am on Aug 18, 2005 (gmt 0)

I'm not going to get too excited about this change as the marketplace tends to be self-correcting. If Google tries to go to far with this, they will quickly be taken advantage of by the likes of Yahoo and MSN.

There are some significant improvements this change brings, especially the end of disabled keywords and slowed campaigns.

It's still be best game it town, just some new rules.

Art

SlimKim




msg:1144741
 12:08 am on Aug 18, 2005 (gmt 0)

In the end, it will be interesting to see which of the big 3 SEs gain the most favor with advertisers.

Yahoo, MSN and Google all have enough reach that no large advertiser can afford to ignore any of the three. But there are certain things the SEs can do to enhance their overall image among all advertisers.

I can see where a advertisers landing page needs to be highly relevant to the keywords bid upon ... for the good of the whole operation, long term.

After that, I think the CTR should be left alone and minimum bids should be determined by the market. If "jokes" is worth more than .01 (long term) you can be sure that free enterprise will find someone willing to bid .02 or .04 or whereever it is profitable.

If ads are displayed according to bids, and there are only 8 plus 2 premium slots per page, then a free market should determine bids better than any other method.

begood




msg:1144742
 12:10 am on Aug 18, 2005 (gmt 0)

The new system is completely unpredictable.

The same keyword fluctuates between 0.05 to 1.00 in the same day.

AWA: Is this is an early stage tuning of the quality algo, or the algo is dynamic by definition?
Also there is no convenient way to view a min cpc if you're bidding higher then it. (You need bid 0.01 deactivating the keywords and then reactivate).

So far we've been optimising about once a month, the way it looks now we will need to hire some help for daily optimisations...

The most fundamental change in optimisation strategy, for me, is splitting campaigns into two. First are for the high conversion keywords you bid for position (typically with more then 10 other advertisers) which are manged much like before. The second are for keywords that worth bidding just enough to get in.

If min ctc is dynamic to stay, I can see a good value for a software or service that will update the 'just enough to get in' type campaigns few times a day with the lowest possible cpc up to a defined keyword ceiling.

breny




msg:1144743
 12:22 am on Aug 18, 2005 (gmt 0)

The way I see this Quality Score system (if a quality score actually exists) is that google sets a goal but they refuse to tell us what it is.

AWA, how would you like it if no one told you what your goals were? They would just reduce your salary if you weren't reaching them and raise it if you were. Doesn't seem really logical, does it?

gc43




msg:1144744
 12:31 am on Aug 18, 2005 (gmt 0)

AWA said:

gc43 said:

I have been deleting and re-adding the "disabled" keywords as instructed to do so. Most of them reappear as "Active" which is very cool, but some of them stay disabled no matter how many times I try.. any ideas? anyone seeing the same thing?

Thanks for the heads up, gc43. This is a glitch, and should be resolved shortly. My apology for the annoyance.

Thanks AWA. Looks like it is fixed now, that was fast - must have been a typo in the code.. haha

RedWolf




msg:1144745
 12:49 am on Aug 18, 2005 (gmt 0)

I tell you what I find funny. Under about ten keywords I do business under there are no ads now, when previously there were dozens of ads for each keyword. My speculation is that Google is now quoting differing rates to each advertiser and they arenít biting.

I think it is more likely that people don't realize that they have to constantly check all their keywords now. With the random totally bogus "quality ratings" that are floating around the account disabling terms for no apparent reason, someone could have their terms disabled and not even know it till performance started to drop. As far as I can see, there is no way to know if you have any disabled keywords until you get down to the actual keyword screen on each group. This means you have to go through the leaf nodes at least once a day to see if they are trying to get more money from you for a term.

And I can't see how you can improve the quality of an ad that uses the term in the title, the body text, the display and actual url, and all over the landing page and recieves a 3% CTR on a fairly well searched term. Also it seems to get an exact match instead of the phrase match version even though they both have similar CTR, CPC, and impression counts. Doesn't make a lot of sense, but it is thining out the number of competators when the ads do show.

eWhisper




msg:1144746
 12:54 am on Aug 18, 2005 (gmt 0)

Overall, the system makes sense. The way quality score is being produced can be completely formulated out except for one item which just doesn't make sense:
destination url

why does the exact same ad, with the exact same keywords, in the exact same adgroup change min bid prices based soley upon a change to the destination URL?

eWhisper




msg:1144747
 12:56 am on Aug 18, 2005 (gmt 0)

AWA - The URL in your last post isn't resolving to anything. Is there an error in it?

toddb




msg:1144748
 1:11 am on Aug 18, 2005 (gmt 0)

This is very hard as I just got nailed on a misspell for pretty big money even though I am all alone and it was .05 yesterday for the same click. to pay 20 times that for one click today is crazy. do I drop my overall bid or just that one term? I assume they will be precieved as more relevent as we get more clicks on this stuff.

AdWordsAdvisor




msg:1144749
 1:13 am on Aug 18, 2005 (gmt 0)

AWA - The URL in your last post isn't resolving to anything. Is there an error in it?

Good catch, eWhisper - thanks! Could I ask you to edit my post # 185 and swap that URL for this one?

[adwords.google.com...]

Much appreciated!

AWA

Voxman




msg:1144750
 1:18 am on Aug 18, 2005 (gmt 0)

Totally miffed at a very dumb system. Keywords that were ok at 4 cents yesterday now require 40 cents for an item we sell for $1.95 - $3.95... just great. I don't think my competition will go for this either...that's the only good side.

As someone said now we have to check every ad every day. Thanks Google for giving me more work to do other that try and run a business.

I paused my account today in protest. And will get rid of every keyword that's giving me trouble and THEN I will decide whether to turn it on. I will protest this on a regular basis as I hope many do with our advertising dollars. It's the only thing the suits understand...

If you only want the big players and don't need my (and others) 3-4 grand a month...so be it.

Just a gouge plain and simple. So when does MSN come live with their PPC? Watch your dollars going there Google.

joeventura




msg:1144751
 1:24 am on Aug 18, 2005 (gmt 0)

I think a better idea is to write an article, I think I have a friend over at MSN who can get it put online.

patient2all




msg:1144752
 1:57 am on Aug 18, 2005 (gmt 0)

Going through my account, it's so transparent what is happening. If my keyword phrase contains a single high dollar keyword, let's use 'video' as an example.

I could be selling 'video tape repair utility' with a retail of $15.00. For months, a 10 cent bid was fine and put me in a nice profitable position. Now they see the word video and realize that 'video' can apply to really high end video equipment, so they want a dollar or more.

A computer algo cannot assess the relative value of a phrase in context with an ad. The keywords that don't use the word 'video' and say 'dvd' or 'tape' are untouched, but anything with 'video' wants at least a $1.00 bid. Quite shabby in my opinion, but I'll survive.

Someone several hundred posts back suggested this has been the case since January, but I wasn't affected by it until today.

patient2all

driris




msg:1144753
 2:53 am on Aug 18, 2005 (gmt 0)

patient2all

but anything with 'video' wants at least a $1.00 bid.

i have also observed this thing ...

surf4soul




msg:1144754
 3:34 am on Aug 18, 2005 (gmt 0)

You know whats lame is that know one was complaning before this change? Now they have the whole google world mad.

eWhisper




msg:1144755
 3:38 am on Aug 18, 2005 (gmt 0)

You know whats lame is that know one was complaning before this change? Now they have the whole google world mad.

I think once it's sorted out, it will be better than before:

[google.com...]

ecommerceprofit




msg:1144756
 3:39 am on Aug 18, 2005 (gmt 0)

I'm am totally confused - I have one of those "video" type of words - I used to be number one and now I'm like 8th - many of the ads before me are confusing/not relevant. I even paid more per click and nothing...

patient2all




msg:1144757
 3:47 am on Aug 18, 2005 (gmt 0)

Anyone else with a large account have that "disaster area" feeling and don't know where to start?

patient2all

dfud




msg:1144758
 3:48 am on Aug 18, 2005 (gmt 0)

patient2all,

I think when this all settles down the free market is still determining the prices. For instance if you are bidding $0.10 cpc for 'video tape repair utility' you are competing with anyone bidding $1 cpc for 'video tape'.

If people searching for 'video tape repair utility' seldom click on the $1 'video tape' ad, Google makes almost no money.

If people click on your ad like crazy but the min CPC is so high that your budget only permits your ad to be shown 10% of the time the algo will lower your min cpc to maximize revenue and relavancy.

So the algo raises the min cpc of the 'video tape' ad and lowers the min cpc of your ad, for this phrase, until they maximize the revenue they make from all advertisers for each particular search.

I've started ads many times at a cpc of 4 to 10 times where I eventually get it to be. Then I run a half dozen different ads for the same phrase and let the system figure out which ad works best. I keep that one and delete the others. I am often amazed at how much that minimum bid can come down when the ad is well tweaked.

The goal of their algo is to leave no money on the table long term. If they can make the most money for a search with a $0.02 cpc, they'll do it. If they can make the most money at $10 cpc, they'll do that.

I think Google is also trying to penalize the guys with the $10 cpcs that get very low ctr because it doesn't maximize their revenue long term. To maximize their long term revenue they must convince searchers that a click on the right side of the screen is very likely to take you where you want to go.

I don't think they are trying to increase the minimum bids because like has been said before - that doesn't necessarily increase revenue.

I think Google's only goal here is to maximize long-term revenue by providing the most relevant ads to searchers. To accomplish this they are penalizing advertisers with the big CPCs and low CTRs.

I didn't even know the new system was operating on my accounts because I did not have a single term paused (out of about 700). I had to lower some cpcs down to $0.01 to see it pause terms. Then it would tell me to raise the bid to $0.02 or $0.04.

It seems the key is to have VERY WELL TWEAKED ADS that go to well performing websites.

I don't know if Google does it yet, but if they don't, I bet they will eventually take into account how long a visitor stays on your site. If someone clicks through your ad to your site and then they jump back to Google quickly and then start clicking through the organic listings, I bet eventually you will see your min cpc go up. But on the other hand if they click through your ad, stay a while and then come back to google to click on another paid ad, I bet you will see your min cpc go down and your ranking position go up.

It's all about maximizing Google revenue long-term.

Voxman




msg:1144759
 5:09 am on Aug 18, 2005 (gmt 0)

talk about defense ... I think eWhisper & dFud are Google trolls... lol

Corporations never do anything for their advertising clients that saves them money...it's all about lining their pockets with more of our advertising dollars. I for one am not falling for this.. "this will be better in the long run" philosophy. Even when I worked for major corporations I learned that when they say "some great things are coming down the pipe" that means get the toilet paper ready.

warrisr




msg:1144760
 5:18 am on Aug 18, 2005 (gmt 0)

I have been a AdWords user for a couple of years now, and have been largely satisfied with both the click through and conversion rates I have been getting. But this latest change has created a number of problems for me.

The CPC on many of my keywords have doubled, tripled and even quadrupled. Additionally I run several hundred ad groups with thousands of keywords, and trying to stay on top of what is going on at the group level is proving to be extremely challenging and very time consuming.

I have already turned off half of my campaigns and reduced my daily spending by more than half, and I am afraid that these changes will force me to reconsider my entire online advertising strategy.

patient2all




msg:1144761
 5:35 am on Aug 18, 2005 (gmt 0)

dfud,

Appreciate the insights. Actually my "video repair" example was somewhat ficticious, although the term "video" figures into a lot of my ads. I don't like to give away too much about the solo niches that I have developed.

It's just that I have 50,000 keywords spread over about 600 Adgroups and market a diverse range of products. I believe that I succeed because I don't keep all my eggs in one basket and if one campaign goes down the tubes for a period there is enough else to sustain a consistent daily profit. Anything so I don't have to look at an ugly bossman.

5391 keywords were flagged as "Inactive". However, they're scattered among all the campaigns, 2 here, 5 there and to assess them manually would use up weeks. A cursory inspection shows about 1/3 I would have gotten rid of anyway eventually, 1/3 have reasonable new CPCs that I would accept, the other 1/3 want just plain absurd bids. I'm just going to let it ride for now. It's ironic that while the term "video" got flagged almost everywhere it appears, the plural "videos" was untouched.

Overall, my overall CPC for the last 2 days has stayed the same, 18 cents and my CTR has gone up from an overall average of 2.1 to 2.5. Against my better judgement, I have huge daily budgets to ensure that I show on every search. It's risky, but it does make a difference as I saw when I did some experimentation.

It would be nice if many of the big outfits that bid on the most generic of terms went away. They show for specific searches based on being able to use their deep pockets to bid high on a term like "video tape". Even though they are useless for the searcher who was looking for a particular "red widget format video tape". Their only advantage to me is that by the time the searcher has gone through the top 3 ads and realized they've simply hit the home page of major retailers that may or may not have "red widget format" - if the searcher conducts a secondary search within the merchant site, they're more apt to be pleased to finally hit a site that showed because its keyphrase met the searcher's query to a tee.

I've made several posts about how of out of 10 ads showing for a query of "red widget format video tape", perhaps 2 were prepared to actually sell you one. Then there's always that site that uses the dynamic insertion to echo back your query offering it for "free" if you sign up for something. Have to try that site for a HumVee.

Perhaps some of the mega retailers "bid on anything" keywords have been rendered "inactive" since many of my ads moved to the premium spots today where I don't like them to be. My strategy has been to sit perched at the top of the right side or be the last ad if there are less than 6 ads or so showing. The premium spots have 3 downsides:

1) ad blindness factor
2) tire kickers
3) the entire row is clickable

On the other hand,

-------

I know this all will ride itself out, it's just nice to have a bossman that I can yell at now :)

The only thing still itching me is what appears to be a stealth move to a minimum 10 cent click. I rarely bid 5 cents, but 6, 7 & 8 have oftentimes placed me just where I want to be.

-----

I don't know if Google does it yet, but if they don't, I bet they will eventually take into account how long a visitor stays on your site. If someone clicks through your ad to your site and then they jump back to Google quickly and then start clicking through the organic listings

Maybe in the year 2050, but can you imagine the stats they'd have to keep to maintain that at a keyword level!

Cheers!

patient2all

surf4soul




msg:1144762
 5:56 am on Aug 18, 2005 (gmt 0)

I have been hit big time. My monthly spend is over 10k a month. All my keywords are around .07 cents. A huge percentage is now inactive due to what appears a 10 cent min eventhough its not. The problem is that I have no profit in my biss at the 10 cent level.

Oh well. My biz that made my profit 13k last month will probaly do to 2k. Im suicidal!

r====:{ Bang!

toddb




msg:1144763
 6:21 am on Aug 18, 2005 (gmt 0)

Is an ad being displayed with a ridiculously high minimum bid going to push the whole bid chain up?

The old fomula was in its simplist form -

(compeitors bid + .01)/my CTR = my CPC
Example the guy under me is at 1 and I have a 25% CTR.

(1.00+.01)/25= .04 default to .05 CPC for me.

Now the guy under me can be at $3 based on almost nothing but his ad is designed to avoid clicks. Do i now pay .12 a click or is CTR given more clout to compensate for this?

PS surf4soul, it is too early to get the applcation for Micky D's

surf4soul




msg:1144764
 6:46 am on Aug 18, 2005 (gmt 0)

yeah its not over yet. Just not gonna get to buy my range rover. I thought i was gonna be rich. Oh well 13k i made last month. Good bye to money.

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