Google AdWords Pricing Change Goes Into Affect

8/15 1:00pm PT

[poster_boy]

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.

[DavidDeprice]

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

[inferno]

for those of you who dont see it, i have made a screen shot of how mine looks, and why this is just unbelievably terrible, i have of course removed all the keyword information but it honestly just disgusts me to even look at this.

<link removed>

[edited by: eWhisper at 8:06 pm (utc) on Aug. 16, 2005]
[edit reason] Please don't drop links. [/edit]

[markus007]

i'm adding hundreds of words and 50% are getting automatically disabled. Seems there are still bugs.

[DavidDeprice]

Ok, some more testing
credit card requires a $1.00 minimum
but "credit card dfjfjfjfj" 0.10
So the minimum for new keywords really is 10 cents, but luckily, you still can narrow your key phrase down and pay less. I was afraid that Google charge obnoxious minimums for all key phrases that containe the expensive part.

[jotafk]

inferno:

I'm seeing even worse.
I think it's time I take my business elsewhere. I really hate that Overture guidelines and support but a man has to eat.

[DavidDeprice]

Wow, folks now some disturbing news - had a keyword that I paid for 5 cents and it brought me customers in the past - now disabled and has a $1 minimum and I am seeing similar changes across the board. Not good.

[inferno]

i used to have ~200 keywords all at 5 cents a click, getting decent traffic for those 5 centers, now ive got 5 keywords at 1 cent per click, and the rest range from 10 cents to 10 dollars.

[bears5122]

This seems like a nice way to raise minimum bids without actually coming out and doing so. Technically they can say that "our bidding starts at $.05". It's a nice little PR move in my opinion.

My biggest concern is that they will be using conversion data to raise minimums across the board. I believe this is more motivation not to touch the Adwords conversion tools.

[DavidDeprice]

Yeap, this time, most of the 5 cent keywords are being "inactivated" unless the bids are upped to 10 cents - these are keywords with very decent CTR. That's actually much worse than I imagined - I thought the old advertisers will have the grandfathered bids.

[dave741]

... now ive got 5 keywords at 1 cent per click, and the rest range from 10 cents to 10 dollars.

inferno it sounds like nightmare :-(((

[DavidDeprice]

it aint' final yet, let's see what happens next

[inferno]

honestly, my business is very very dependant on google, id say 98% of my business is based on google.

im contimplating whether i should just close up shop

*sigh*

[eWhisper]

Until this is fully instituted, I would really suggest not utilizing the new system.

I'm seeing keywords now with minimum bids of under $0.05 that yesterday were over $0.50 (and in some cases, the numbers are vice versa).

Google has stated publicly several times that they will send out an email when the changes are 'official', and until that happens, I think much of this speculation is really premature as to how the system will actually run.

[inferno]

ewhisper, i dont plan to jump to any extreme measures, but as this is just a taste of things to come, i might have to be looking for a new source of income...

[DavidDeprice]

damn, it's so excitng. feels like a new eBiz revolution (or Great Depression). August is going to be quite a month.

[surf4soul]

Well the way this is looking, im really screwed with these raises.

Google is greedy

[inferno]

this is unbelievable, to bid on my company name, a category that has 0 advertisers, is going to cost em 30 cents per click.

i am really going to have to consider switching EVERYTHING over to yahoo before i consider closing shop, i am so furious right now you have no idea.

[DavidDeprice]

Another observation - the minimums DO NOT go down even if you change ad wording. I guess you are supposed to change the wording, run the ad at the very right required minimum, achieve the desired minimum and then you'll be able to get a lower bid. I am starting to think that click fraud is not bad at all - soon we'll hire people to click our own ads, so we don't have to pay these outrageous minimums.

[ddogg]

I have confirmed the new system is going live right now and will take all day to get all accounts switched over.

Seems like Google pulled a fast one on us. If it turns out as bad as some are saying they will pay dearly for this. This is one of those missteps MS has been hoping for.

[DavidDeprice]

No, I don't believe it's final. This algo has one HUGE error.
It requires very big minimum bids for certain keywords that nobody bids on. 10 cents are fine, but 30 cents are not.
This way Google will lose a majority of advertisers that do not have any competition (i.e. they are the only ones to bid for certain keywords).
In addition to that, it's hard to believe that those required minimum bids will be stable - if certain niche goes out of favour and bids plummet, the min should go down too, or the entire niche will be deserted.

[jotafk]

I agree with those that say that these CPC's are get from Google's Conversion Tracking.

Those keywords that are converting the best (and sometimes they have only 1 bidder) are now costing a stupid ammount of money.

On the other hand I still see lots of kw's at $0.05 so this means that we will not be able to touch those kw's ever in the future or else they will go to $0.10.

Who guarantees us that after setting a minimum bid and with a high CTR the cost will go down?

Also, the fact that the kw minimum bids are in multiples of $0.10 really shows that Google only cares about big players and shareholders.

Goodbye small fish.

[markus007]

Seems like Google pulled a fast one on us. If it turns out as bad as some are saying they will pay dearly for this. This is one of those missteps MS has been hoping for.

Just because you can't make money doesn't mean others can't. I've been watching very generic terms go from no advertisers to jam packed full of advertisers. Many high CPC industries such as home loans may well bid on unrelated terms like stock picks because the demographic of those users matches people in need of homes.

[inferno]

the small fishes are going to pay dearly on this one, and i certainly am a small fish

*sigh*

[DavidDeprice]

Ok, it's pretty much clear what's going on with AdWords.
The key to whether it's final or not lies in AdSense.
If AdSense earnings go up, it means the higher prices are here to stay. However, the logic thinking suggest that AdSense advertisers will be hit the hardest. Content conversion rate is worse (so it makes no sense to bid the same for content as for true search, plus the CTR for content ads is really poor, often one tenth of a percent). So this would result in most ad inventory being dumped (because the bids are at 5 cents and CTR is crappy) and we would see a bunch of CPA ads - this does not happen, which means it aint' over till it's over.
Incidentally, do we have any Adwords advertisers here with the content network turned on - what do you see with your mins?

[inferno]

i dont use content, i tried it and hemmoraged money for a month.

[Voxman]

Just another gouge...not sure why AdwordsAdvisor thinks that we will welcome this with open arms...One thing I've learned is that with each and every update the PPC's find a way to drain our accounts even further. Right now I see people getting excited about 2-3 cents but trust me if those keywords made any money they won't be running at that level for long.

I'll watch this closely. We spend about 2-3 grand a month on AdWords (not much compared to many I know) ...If this gets silly we may giving the money to Overture instead. I just have a bad feeling about this. What I expect is now Google will be catering to the big adverstisers which now have a way to squeeze the smaller players right out of business by driving up the popularity pricing of the important keywords. The American way I guess.

I will dance in the streets when the death of PPC comes and a newer system comes into play. Google and Yahoo better remember that nothing on the net is forever and for sure something will replace this business model...and advertisers 'do remember' if they believe they are being gouged.

It's too bad we were not more organized. A week of boycott would wake the PPC giants up in a hurry if most of the smaller companies simply rebelled

To sum it up.... better get in the car boys...we are going to the cleaners.

[mark1111]

I see it too. Didn't AWA say it wasn't going to happen yet and that we'd receive email notification?

The changes will relatively launch soon, and as mentioned previously, we'll notify everyone by email when they do occur - and of course I'll post here as well.

In the meantime, for those few that do see the 'new' pages, please know that you are seeing testing, that your account will run as normal during the testing, and that any changes you make in the 'test' interface will be saved.

[edited by: mark1111 at 9:19 pm (utc) on Aug. 16, 2005]

[inferno]

well posted, and i agree, my spending is significantly less than yours, as i am a tiny tiny tiny business, but it is what i do. sadly i wont be able to do this for much longer if this is what is happening, my roi will go from a decent number, to a loss overnight, im kinda freakin out over here.

[breny]

There is no rhyme or reason to which words need a higher bids and which don't. What a crock of sh*t.

I definitely think they are out to get the small guys.

AWA---I don't see any way to defend this one. BAD BAD BAD all the way around.

[mark1111]

I just called support--it has gone into effect. No email notification, no posting by AWA. Thanks a lot.