Minimum bid changes
Disabled Keywords
Advantage
Keywords which would have been disabled, and therefore you couldn't bid on them no matter what you did, will now have a minimum bid associated with them so you'll be able to bid on that keyword no matter what.
You can add keywords with bid prices. If fluctuations happen that means they're above the min price, they'll show. If the min price goes above the max bid, they'll be inactive (paused). This also makes it so that you can leave keywords you'd like to bid on, but aren't essential, in your account and let the system kinda take care of it.
Side effect
You can pause individual keywords by making a keyword bid below that minimum bid.
Bidding Changes
Reports
There will be an active/inactive keyword report.
This report will also be available through the API.
Interface change
Bulk Upload
A new bulk upload sheet will be necessary once the new system is implemented. It will have an additional line for minimum bid per keyword.
Timeline
Approximately one month.
Google will make another announcement before the change actually happens. They're really giving us time to make changes and get ready for this.
[edited by: eWhisper at 1:57 am (utc) on July 22, 2005]
Thanks once again for succintly pointing all the changes that are going to take place. The one thing that was startling in your post was the reference to the ad discounter
If your minimum bid is above what you should pay based on the ad discounter, then you will pay the minimum bid. (i.e. if the discounter says you should pay $0.15, however, your minimum bid is $0.20, then you will pay $0.20).
This is the quote from the Adwords Blog
Question no. 3: Are you going to continue to discount ads?
As always, the AdWords discounter will continue to reduce your actual cost-per-click so that you pay the lowest possible price for your ad.
Now what Google has said is not completely contrary to what you have posted but still doesn't tell the story clearly as to what it is going to do. Now if what you are telling turns out to be true, then Google is turning out more and more to be like M$ - tell something when you actually mean something else and goes that much more to loose my respect.
Everything I heard makes total sense.
I'm in favor of every change IF (and this is a big IF):
1. The minimum bid prices don't get out of hand. Some of the PFIs and Shopping engines have decided keyword minimums based on verticals. However, because AdWords isn't always eCommerce, but a large variety of other businesses. If minimums start hitting $1 for keywords with only 3 advertisers - we have a problem.
2. Minimum price fluctuations. It's expected in the first couple weeks for prices to fluctuate quite a bit as the system is stretched by the advertisers. However, after that, changes need to be within a small percent margin and not widely varied each day.
3. Geo Targeting. A single word keyword might be terrible for a national campaign - but great for a local city campaign. The city should not suffer a much higher min bid because national advertisers couldn't make it work.
Honestly, the point that worries me the most is number 3. I think revenue and advertiser feedback will make 1 & 2 steady over time. Right now, it's still possible to hurt your own campaigns with national and regionals in the same campaign as Google doesn't have a geo hierarchy structure.
If a local dentist can't bid on 'dentist' for a regional campaign, but has to bid on 'chicago dentist' because of the minimum bid prices - then there will be an even further slowdown of local adoption in AdWords compared to YSM (sorry if this sounds like a rant, google.com has better local results than local.google.com does)
Nice succinct summary!
I agree with all your conjecture, however my understanding is that the minimum bid will be dynamic and will change virtually in real time, based on latest keyword response data whic determines the quality score, so in theory, you can pay less (or more) than your mininum bid, based on fluctuations in the quality score.
Vinny
Example is "widgets.com" decides to brand itself by buying every search. They bid .20 to be seen. they could push up the whole market and get very flew clicks do to lack of relevence.
I also think this may drive up prices as advertisers want to bid on terms they just can't get know. These are often the ones that don't care about cost too much.
I think I've read the minimum bid may very per adgroup. That sounds like the Quality Score will be highly dependent on individual performance.
The interface I saw had a a list of the minimum CPC by keyword, so I'm pretty sure it's going to be by keyword.
Also, the processing power necessary to handle minimum bids in real time would be truly astounding. I think Google is also worried about it, and therefore it'll be a nightly or set interval update.
Again, this is all preliminary - one never knows how things will actually work until it's running.
My thanks also for taking the time to post your summary.
1. Regarding item 1 in your first follow-up post, I'm certainly in favor of reforming the much aligned current keyword states . . . however I'm not at all convinced that having Google effectively set dynamic floor prices in thousands of different keyword markets is the way to go.
I'm reminded of what happens when "we know best" big government tries to get involved in picking economic winners.
Google should stick to being a market maker, not artifically influencing the value of bids as it will when it assigns a Quality Score.
You don't see eBay trying to affect the value of auction bids . . . they let the market decide the value of the merchandise.
2. Advertiser adoption of Yahoo Local ahead of Google Local . . . are there any stats on that? How far ahead are they?
3. It will certainly be interesting to see how much the Adwords Discounter dampens the effect of the scenario described by toddb.
This could turn into a huge problem for smaller advertisers like myself who run international geotargetted campaigns.
For example, say I have a widget store in my country. I can bid 10-15 cents for it and still have the ad show up in the front page (often in the north position) because most of the US "big money" advertisers have turned of international targetting.
Lets see how this unfolds.
The adwords discounter (paying $0.01 above your competitor) is still in effect.If your minimum bid is above what you should pay based on the ad discounter, then you will pay the minimum bid. (i.e. if the discounter says you should pay $0.15, however, your minimum bid is $0.20, then you will pay $0.20).
Huh? Did you mean to say maximum bid?
Huh? Did you mean to say maximum bid?
From: [adwords.google.com...]
When you create a Google AdWords ad, you choose keywords for which your ad will appear and specify the maximum amount you're willing to pay for each click. You only pay when someone clicks on your ad. To save you even more money, our AdWords Discounter automatically reduces the actual CPC you pay to the lowest cost needed to maintain your ad's position on the results page.
With the change, the above will remain true unless the discounted price is below your minimum bid price, in which case you will pay the minimum.
For more about the entire formula of bid pricing, please see: [webmasterworld.com...]
A new bulk upload sheet will be necessary once the new system is implemented. It will have an additional line for minimum bid per keyword.
The lack of this feature is the largest obstacle to creating relevant ads on Google right now. Inputting detailed campaigns in mind numbingly slow and cumbersome.
If it will be possible to take an Overture/Yahoo style sheet and upload detailed ads, the early adopters of this should be able to crush the competition through the implementation of much more detailed ads.
The dynamic bid change will be very nice for advertisers who want to brand on keywords like dvds, movies, or other very general keywords.
The dynamic bid change could be a nightmare for smaller advertisers if big brand companies can blanket tens of thousands of keywords with typical branding mesages that are not relevant to the searches being performed. We'll have to see how it affects local advertisers.
Will the click-through rate be more heavily rated in the ranking algorithm than it is now? If an advertiser throws up a general ad with a $100.00 max bid for example, and gets a CTR of .001% but that results in a higher CPM and hence more revenue for Google than everyone else with much more targeted ads who is bidding $0.25 or less, is that ad that nobody clicks on going to rise above the others?
Will a certain CTR be required to get bumped up to the premium spot, or will it be the ads that make Google the most money regardless of relevancy that rise to the top?
Will these changes improve the user experience? We'll have to see.
It's going to make Google more money, just like all previous Goto/Overture/Yahoo Searchstuff made them more money.
Remember, these are public companies who answer to stockholders - they have to keep increasing revenue.
They've signed up virtually everyone who is serious about ecommerce, which means that their ability to get NEW customers will slow.
The only way to keep growing is to think up new ways to get more $$$ from the advertisers they already have.
smells like the end of the adwords - adsense arbitrage.
Which is good, I think.
I personally hate seeing sites cooked for adsense revenue only funneling traffic through adwords.
I click the ad, go to the site and the only content I see is adsense blocks :((
The age of little guy is over.
I don't agree. While in some areas where "the little guy" like me competes against huge firms then, yes, it is possible.
However in our niche I just don't see it happenning. We have competed side by side with the big booking comapnies for years. There has always been a place for us. It may make the game a little more expensive however there will still be a game.
Has anybody noticed what happens in AdWords when you do excellent keyword research and attempt to get decent rankings for REALLY DETAILED SPECIFIC keywords these days? ----- it's impossible!
Example: Say you are a little guy and set up a "local targeted campaign" for your "tinytown" area of a few thousand people and go after the keyword
"[small tough yellow widgets]" -- that's exact match folks -- and bid a max click price of say $0.10.
Heck, considering you are targeting only your local area and going after an exact and very specific keyword, you would think 0.10 would be plenty...
WRONG BUFFALO BREATH!
Google is not about to let you get away with that one -- plan on the max bid requirement for your very specific keyword being close whatever it takes to get top positions in a GLOBAL campaign with BIG bids for the non-specific keyword WIDGETS.
That's right... the little guy that targets very specific keywords even in a very small area has to complete with the bid prices for the rest of the world, just to make sure his ad even shows up!
Betcha, the new AdWords change won't do anything to improve this situation --- what does this prove? As said by others earlier in this thread:
Big is in -- Big Guys, Big Budgets, Big Bids
Sorry to be so off subject, but this issue is due to "another change" Google made a while back that virtually nobody took notice of. At least this time they are telling us of the change before it gets us.... lol
I have a great deal of experience (and frustation) with this type of AdWords issue and would be happy to start a new thread if it peaks anybody's interest.
This sounds a lot like selling water for $10 a gallon when a hurricane is comeing and normal price when there is not. This sounds illleagle to me.
There should be a set min bid the market will work itself out. If all of a sudden a term is busy people will bid more there is no reason to mess with it. Google has too much money and feels like it has to be doing someting. Sometimes things need to be left alone.
I do like that I can now bid on terms that were dissabled.
Personally I believe it will help, because less relevant/broader keywords seemed to give me good turnover clicks though the CTR was very low.
Sorry if I am naive, but what is turnover clicks?
For those where ROI is king and matters a great deal we may see our ROI cut in half or even more, or we'll be seeing much less volume if we want to keep the same profit margins.
IF you want to continue seeing the same profit margins expect your ROI to plummet just because you will be paying more to compete with the bozos who have off topic ads, but pay HUGE for them just because they can.
I hope I am wrong, but this is how I see it happening.
Dave.
However, over a period of time, as ads/keywords for the big advertisers develop a very low CTR, the quality score will start pushing their ads down, maybe to the point they become inactive as their accounts develop poor performance.
Once things settle down, I think the advertisers that pay attention to their CTRs will come out on top.
Remember that Google won't make any money from an ad that doesn't get clicked.
to the point they become inactive as their accounts develop poor performance.
Or their minimum bids get too high.
Or their minimum bids get too high.
That's what I mean. If their quality score is particularly poor (and we know Google factors account performance into predicted CTR/quality score), then their minimum bids will be pushed higher and higher.
But how long will this process take?
Christmas widget
Off season, low quality keyword with low CTR, higher minimum bid.
During season, CTR is higher, keyword is more relevant, lower minimum bid.
How will this work if I've bought the ads in low season, and kept it running until High Season. Is Google going to start harasssing advertisers to up their bids and notify them when they can reduce them again?
