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Done with AdWords

 2:40 pm on Nov 9, 2006 (gmt 0)

500 relevant, targeted keywords going to relevant, targeted pages in the site. Hardly a shotgun approach. 5% CTR over several months. Bids were .04. Today, wake up and Google wants $1 - $5 per click.

So that is the final straw. We are done, done, done and I hope someone comes soon to knock Google off its arrogant perch. I will not spend another dime with them ever again.

Power corrupts. Absolute power corrupts absolutely. And the little guy gets screwed again.

[edited by: ember at 3:15 pm (utc) on Nov. 9, 2006]



 2:06 pm on Nov 21, 2006 (gmt 0)

I do not think Google is driven by CPC right now. Quality of their ads is #1 concern for them.

I'm not running Google, so I can't speak for them. But I know that if I were sitting on...
1. a 60+ P/E, i.e. investors and analysts demanding high earnings growth
2. a single product contributing to my revenue
3. a maturing market for my single product
4. numerous non-revenue-producing side projects and rising infrastructure costs

...I'd be looking pretty hard at optimizing my pricing. After all, pricing is the only lever left to get to high earnings growth, given conditions 2&3 above.

I can certainly see why quality is a huge concern for Google, and I imagine quality is a factor in the QS. But I'd be shocked if the QS didn't have a very important short-term revenue optimization component as well.


 2:52 pm on Nov 21, 2006 (gmt 0)

"I'd be shocked if the QS didn't have a very important short-term revenue optimization component as well. "

Of course it has.. Two birds with one stone.. Knock of low Quality (cheap ads) and allow High Quality expensive ads or ads with huge budgets to run.

This is a business after all.


 2:57 pm on Nov 21, 2006 (gmt 0)

Our ads were very targeted. If you wanted "small, blue widgets with red polka dots," and searched on that phrase, our ad came up and led directly to a page about "small, blue widgets with red polka dots." Targeting was dead on. Content was fresh weekly. No affiliate links. No pop-ups or annoying anything. Clean, user-friendly and...oh, yes, targeted as not good enough, slammed with an arbitrary $5 minimum click and deactivated.

Stockholders rule all. As news that Google shares just topped $500. Gee, I wonder why?

[edited by: ember at 3:26 pm (utc) on Nov. 21, 2006]


 3:11 pm on Nov 21, 2006 (gmt 0)

Knock of low Quality (cheap ads) and allow High Quality expensive ads

I agree. I guess where things get interesting for me is where the "two birds" are at odds. What happens when Google finds a high quality ad/site/advertiser that has a large opportunity cost associated with it? What does Google do; leave it alone in the interest of quality or slap it with a QS penalty to get rid of it in the interest of revenue? I believe in some cases it does the latter. The distinction is important in that it means in some cases, you can't "fix" your quality by changing your site or your business model or domain registration or host or whatever. In these cases, you can only get back in Google's good graces by dumbing-down your bidding strategy.


 3:22 pm on Nov 21, 2006 (gmt 0)

Collateral damage.


We suffer.


 3:45 pm on Nov 21, 2006 (gmt 0)

I'm happy to see that sailor, ember, pdivi have figured out the QS, and I hope they'll let us all know when the results from that knowledge are in.

When do you figure your bids will fall after you've implemented your knowledge?


 4:22 pm on Nov 21, 2006 (gmt 0)

I'm confident my bids will fall as soon as I remove adsense from my site.

However, I'm finding a pleasant surprise - natural visitors are at 25% of what I was getting when spending $500 a day with Adwords.

Also noticed my site at pos 1&2 for a two word phrase out of 1 billion results - but adwords gives me a low quality score on those words - thanks to adsense.


 4:31 pm on Nov 21, 2006 (gmt 0)

When do you figure your bids will fall after you've implemented your knowledge?

Mine have already fallen somewhat...down to about 5-10% over my original bids from maybe 20-40% over my original bids when I was hit in April. The adjustment took place during the past two months. I suspect it has to do with competitors dropping out after the second round of damage in July. Competitors dropped out, so the opportunity cost of my ads went down, so my QS went up.

Of course, I was in the unusual situation of having moderate minimum bid increases (still not sure why), so I was able to accept the minimum bids and hang on for a while without bleeding profusely.

For those looking at minimum bids that would require major losses, I'd recommend against accepting the bids based on some obscure promise of increasing your QS through site changes, bid changes, or anything else. How can you manage to invisible metrics? I'd suggest the best use of time is in talking to publishers and arranging direct CPM deals. I'm getting a lot more lift out of that avenue than speculating (or accepting someone else's speculation) as to what Google wants from me.

Thanks for asking!


 5:06 pm on Nov 21, 2006 (gmt 0)

What I don't understand is why this is supposed to be such a sign of unbridled greed on Google's part - if bids are being increased from $.05 or $.10 to $5 or $10 - are people actually okaying that increase and allowing their campaigns to continue to run? The title of this item is "Done With AdWords" and the forum is full of people who say they've decreased or eliminated their AdWords budgets because of Low QS minimum bid increases. So how does that translate into a short term money grab by Google, as is being bruited about? I know *my* bids don't go up when people in my various niches drop out.

I don't get it.


 5:25 pm on Nov 21, 2006 (gmt 0)

What I don't understand is why this is supposed to be such a sign of unbridled greed on Google's part - if bids are being increased from $.05 or $.10 to $5 or $10

Lack of business sense, but not on the part of google.

Almost anyone over the age of six years is going to know that if you want to increase revenue, you do NOT raise your prices by 1000%. If google's concerns were about short term money, they'd have raised incrementally, let's say from 5 cents to 10.

Also, notice that the thread has attracted people who simply wanted to hijack the thread and are clearly not "done with adwords"?


 5:28 pm on Nov 21, 2006 (gmt 0)

So how does that translate into a short term money grab by Google

netmeg, it's about opportunity cost. Here's a simplified example:

Say I have a mid-page spot at a $.20 CPC and I have an incredibly effective ad that's pulling clicks from higher bidders. Let's say those bidders are willing to pay a $1.50 CPC. Now let's say by removing me, you can get just one in five users who WOULD have clicked on my ad to click on one of the higher bidders, and the rest just disappear. Google nets $.50 by getting rid of me, even though they lost all my clicks.

As I've said before, this would be most likely to happen on KWs where there is a big gap between the highest tier of bids and the next tier.

For the record, I don't think I've ever used the term greedy. In my mind, this type of optimization is just good old fashioned capitalism at work. Google has a finite number of users, and it makes sense to direct their clicks where it will maximize Google's profit.


 5:38 pm on Nov 21, 2006 (gmt 0)

but but but... what about all the instances where people are saying they're the only bidders or only one of very few bidders, or testing made up words?

The other thing I have to say about that is that for two of my accounts, I'm one of those people bidding (I believe) way above most of the competition, because my clients in those cases want to stay on top wherever possible for branding purposes. I may be BIDDING up to $12 per click, but I'm PAYING considerably less - sometimes under a buck - which is pretty much in line with whatever everyone else in those niches is paying. So by your hypothesis, one would think Google would be soaking me for considerably more than they are.


 6:12 pm on Nov 21, 2006 (gmt 0)

I started this thread and I am indeed done with AdWords.


 6:19 pm on Nov 21, 2006 (gmt 0)

what about all the instances where people are saying they're the only bidders or only one of very few bidders, or testing made up words?

Great question. My point is that revenue optimization via prohibitive minimum bids makes sense from a business standpoint, and might explain certain circumstances (like where someone gets hit despite having a good site, a solid business model,...) As you point out, it doesn't work in the cases of the solo bidders who get hit, so there must be more to the QS.

I may be BIDDING up to $12 per click, but I'm PAYING considerably less

I think that's how it has always worked, right? Google increments your CPC over the next highest up to a max. that you set. There are strategic reasons why this makes sense; essentially, you have given Google permission to outbid your competitor on your behalf. Were Google to force you to set an actual CPC, you might be more conservative. Ever get the #1 spot on Overture by outbidding #2 by a penny, then visit later to find out you've been outbid in turn who-knows-how-long-ago? Overture misses the opportunity to keep the outbidding momentum going, Google does not. I'm speculating the Google method is more effective in maximizing revenue, but I'd have to have access to the math to know for sure.

Good questions. It's a pleasure discussing these things with others who are looking for answers.

BTW, maybe bidding at spot #1 has been the key to keeping your clients out of trouble with the QS(?).


 6:23 pm on Nov 21, 2006 (gmt 0)

netmeg, it's about opportunity cost.

Opportunity cost is an extremely important business concept, and yes, I think it applies here. While the theory "fits" somewhat, and it explains why the costs of QS to google are mitigated (I think that IS true), I don't believe it's the main reason for QS.

It simply doesn't fit the data we have. If the short term reveune thing was driving this, then:

1) Why is it that the QS "penalties" don't apply to ALL low bidders?

2) Why did google choose THIS particular solution, when other solutions would have been even more effective in increasing short term revenue? (eg. simply raising the min bid to .10 cents (a la overture/YPN)?

The reality is that QS hit a limited number of people (albeit many noisy ones), and that many low bid ads are still in play (we didn't get hit and we're low bidders).

My bet is that google FIRST decided quality is an issue that affects long term profits and viability, which is why they attacked this using a number of variables that would be relevant to visitor experience FIRST.

I think they DID evaluate QS effects on both short and long term income, but secondarily.

Also, Pdivi's theory makes a number of assumptions about how advertisers behave and their budgets, a number of which are questionable. For example, it assumes higher bid ads will replace lower ones, and that assumes high bid advertisers will increase their spends. We don't know that's the case. If high bid advertisers don't spend more, Pdivi's theory can't work to increase google revenue.

Or, google could have simply changed how they display ads to weight bid cost more, so that low bidders would simply (and quietly) get less and less exposure).

If the issue was primarily short term revenue, there are better ways google could have used to achieve that.

Anyway, it doesn't matter. WHY google did QS doesn't tell us HOW to work with google under QS. It doesn't tell us what to DO to lower bids.

The only way to do that long term is to understand the variables in play, and if we assume google IS concerned with quality, then the variables jump out at you.

It's also useful to consider that to attribute QS solely to short term rev. increase makes the assumption that google is publicly outright lying to its customers, and that's just suicide for a publicly traded company in google's position. Outright lying doesn't make economic sense for google. I happen to believe their really good explanations of QS.


 6:26 pm on Nov 21, 2006 (gmt 0)

I started this thread and I am indeed done with AdWords.

At least this week!

A lot of people say that, go over to MSN, or Yahoo, then come back (quietly). The alternatives don't tend to work all that well, and if you can't survive on search traffic because your sites seriously will never get ranked, adwords looks attractive compared to msn or yahoo for a lot of reasons, not the least of which is the yahoo minimum bids, geographic limitations, traffic numbers, etc.

Business is business. Even angry people come back if they can't make a living any other way.

(which is what's happened for a lot of people)


 7:01 pm on Nov 21, 2006 (gmt 0)

We do not need AdWords to survive. We have sites that do well in the natural rankings; we use other PPCs, one of which performs better than AdWords; we have affilates working for us, etc., etc. Anyone who depends on one source of traffic is looking for trouble. Which is why I can say we are done with AdWords and mean it. We are and I do.


 7:40 pm on Nov 21, 2006 (gmt 0)

Which is why I can say we are done with AdWords and mean it. We are and I do.

I believe you. So, I'm just curious here, but if you are done, why are you spending so much time on the details of why and how of QS?


 7:42 pm on Nov 21, 2006 (gmt 0)

BTW, maybe bidding at spot #1 has been the key to keeping your clients out of trouble with the QS(?).

Maybe, except that I am only bidding that way for two clients, and I have something like 15,000 keywords spread out over 12 clients, and most of the bids are under $.20, many are under $.05, and the only ones that got hit even slightly were where the client moved the url path of the product without telling me, so that my ads weren't pointing directly to the right anymore, and once I fixed that everything was fine again.

My situation and experience are all specific only to me, obviously, and it's all anecdotal as far as it goes, but I just ain't seeing what many of the people in this item and this forum are seeing with regards to QS.


 8:28 pm on Nov 21, 2006 (gmt 0)

Rbacal, I am here because I always enjoy a good discussion, that's why. And I am hoping that some of the webmasters who are in here and depending on AdWords will realize that it is a risky proposition.

Netmeg, not yet you aren't. Just wait a little while.


 8:47 pm on Nov 21, 2006 (gmt 0)

Just wait a little while

How long do you think? Is this the misery loves company stuff?

I dunno. People have been saying this since the QS began in the summer, and it's like they really hope that others get hurt -- wishful thinking.

Coming up to six months on this. The truth is quality (shock of shocks) protects you against those higher bids. It ain't random. It ain't affecting most advertisers.


 9:05 pm on Nov 21, 2006 (gmt 0)

It's probably happening to quite a few advertisers. Not all 150,000 or however many there are are in this forum. I would put the quality of our site next to yours any day, Rbacal. Adwords these days has little to do with quality and much to do with m-o-n-e-y.


 9:48 pm on Nov 21, 2006 (gmt 0)

I was hit by the QS - hopefully not as hard as some.

I am confident that by hitting my site Google saved themselves some money - since I had been making a profit from them.

I don't believe that was their motive for implementing the QS - I do believe their long term interest lies with maintaining their brand image.

I am convinced that to avoid getting hit again by the QS I need to further improve my site - to make it a more rewarding and useful experience to the visitor. This is something that I can and will do - even if it doesn't help with the QS, it will still be worth doing.


 10:13 pm on Nov 21, 2006 (gmt 0)

I'm really not terribly worried. I think I can look at my sites with a pretty objective eye, and if I can't, or things suddenly go sour, then I will go find some objective eyeballs who don't know me or like me or will be afraid to tell me the truth, to look at them for me. I certainly don't pretend to understand Google's QS algorithm, but I think in a general sense that I "get it" and understand what they're going for, even if I don't know how they plan to get there. I've seen a few affected sites, and it wasn't difficult to figure out what might have contributed to their lowered quality score. I haven't yet seen a really good quality site that got hit (that's not to say there aren't any - I just haven't seen them)

But if I *do* get hit at some point, my attitude (I hope) will be along the line of pengi's - i.e. I'll have some fixin' to do.


 6:53 pm on Nov 24, 2006 (gmt 0)

Can someone explain to me why Google should even be monitoring the "Quality" of the site that's linked from an Adwords ad?

If I'm going to have an ad displayed in Maxim magazine, I'll pay my $xx,#*$! and I'll have my nice little ad in there. But since when would the Maxim ad dept. rep care whether my full page ad has absolutely Anything to do with the category of product I'm selling?

I just don't get it, I'm new to this, so maybe you guys can explain this to me. I'm paying someone to host my advertisement for me, so why are they going in and analyzing my virtual storefront for some arbitrary "Quality Score"?

The only place I can see that Quality analysis apply (and correctly), is in Organic listings, but why the heck should Google care whether my "Male enhancement" ad's landing page is a picture of a huge schlong with a big "Buy Now" button vs. a community forum and thousands of articles written by specialists shipped in from the top Big Schlong Universities?

I'm paying you to host my ads in the sponsored listings, not the organic listings.

So, what's the deal?


 8:56 pm on Nov 24, 2006 (gmt 0)

One of Google's objectives - quite possibly the main one - is to protect their brand image.

They see their true end customer as the humber surfer - not the advertiser.

If surfers stop using Google, or stop clicking on Google's sponsored links, because they perceive it to be a waste of effort - i.e. too many links to no value or low value sites - then Google's long term business will evaporate.

An ad on Googel is not the same as an Ad in a magazine.


 9:39 pm on Nov 24, 2006 (gmt 0)

I disagree. An ad on Google is no different than an ad in a magazine. Magazines also want to protect their brand image but do not censor to the extent that Google does. And without advertisers, Google does not make money, so advertisers are just an important as surfers.


 10:39 pm on Nov 24, 2006 (gmt 0)

Not to put too fine a point on it, it doesn't matter if you disagree - since it's Google selling the advertising space on Google's own property and partner property, and Google's criteria and quality score as far as what they want to show there.

I certainly censor which ads show up in AdSense on my sites, regardless of whether or not it will cost me money in the long run; why would Google's brand be less important to Google than my brand is to me? They've got a lot more invested in theirs than I do in mine (although I've been around longer)


 11:00 am on Nov 25, 2006 (gmt 0)

An ad on Google is no different than an ad in a magazine.

This may be true for pay per impression ads (and is true if such ads have no links). Here the advertiser pays for people to see the ad.

However for Pay Per Click ads, what is behind the ad itself ahs far greater impact on the surfer's experience - this is something that a magazine does not have to worry about so much. Nevertheless - I'm sure magazines would take action if they received significant negative feedback about specific advertisers.


 1:13 pm on Nov 25, 2006 (gmt 0)

We aren't dropping out. We are being forced out. Our content was fresh weekly. Original, relevant, well-written and lengthy.

I am glad to be out from under the thumb of corporate America (Google).

Me too. I'm actually under doctors orders. I'm not to have anything more to do with Google in any way before it kills me. Its not a search engine its a mind bending cult that takes over your life and flushes it down the pan regularly. I am fed up with worrying about what it thinks, what it thinks of my sites, my clients sites, and what precise way its going to screw up my day next. I used to have a life but I ended up spending it on Google worship.

Not any more.

My Adwords clients have been sent elsewhere, any Adsense will be removed from my pages, and I'm not to read Google themed messages or hang out in places that have substantial content about Google (that means you lot). I couldn't resist writing this one last message though as I have an observation that might be helpful.

I paused all my Adwords campaigns then a couple of weeks later I took at look at my traffic levels - traffic shot up from organic Google search pretty much the instant I cancelled Adwords.

We have been paying to get penalised in the organic serps!?

Granted my site is all original content and relied upon as authoritative by industry insiders, but there are the same number of industry insiders there ever were and I can't imagine they all had a sudden need to be on my site at the same time.

I let the best in the business know I was looking for an escape from Google and was handed the keys to their office and asked to start the very next day.

So I won't be around at all unless they have website issues (and even then they have someone else dealing with that) although I'll check for private messages every few months till I forget my password.

Its been nice knowing most of you. I hope those who have suffered Google abuse escape like I did. I can't tell you what a difference it has made to my life - like being able to breathe freely again after a nasty bout of pneumonia.


[edited by: Alex_Miles at 1:25 pm (utc) on Nov. 25, 2006]


 1:50 pm on Nov 25, 2006 (gmt 0)

The Google Rep that I've had a live chat & exchanged emails w/ said that the above is NOT true. It's the history of the keyword/phrase as a whole. It doesn't matter the slightest that you could convert for that keyword/phrase more than anyone else.

Let's say a naive noob whale with a monster budget barges into his first foolaround with AdWords. He decides to run all his keywords at $10.00 max bid so he'll trounce everyone below. He assumes he'll only pay only $0.01 above the guy below him, so he'll always sit safely at the top and nobody will displace him. Then he walks away and doesn't monitor his campaign -- until he gets the bill. He has a rude awakening, realizes the flaw in his strategy, then adjusts his bids and/or quits. Did he just establish the minimum bid for the next 6 months...or even perhaps for all time?

If you have a KW with a high CTR and a low max CPC, it is possible Google could make more money by getting rid of you completely. Fewer high-performance low bidders means more clicks to the highest bidders. {...} Google is netting higher revenue after displacing the more effective advertisers.

I would not be in the least surprised if this theory hits the nail square on the head. It may not operate as part of the algorithm for keywords which have no other bidders at all, but it might kick in where bidding gets more fierce. It's like thinning out the seedlings in your garden bed, so the highest producers can access all the sunlight and water, and grow into bigger heads of cabbage. It's all about the cabbage.

Almost anyone over the age of six years is going to know that if you want to increase revenue, you do NOT raise your prices by 1000%

I really have to agree with those who assert that Google is losing a tremendous opportunity cost. Who's richer: the haute cuisine restaurant whose tab for an evening always exceeds $100.00 per diner--or McDonalds, the chain located absolutely everywhere at only $0.99 per shot?

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