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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)

WebmasterWorld Senior Member 10+ Year Member

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.


11:19 pm on Aug 18, 2005 (gmt 0)

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Well said Ron. At this point are we seeing a database with too little data? I have some terms where I am alone and the minimum bid is $60. Obivously not a huge money term if I am alone on it. And yes I am relevent. But i typical am not over the top as the serps are pretty good for this term also.

The interesting thing is I am seeing exactly the opposite of what I expected from Google. Broad high volume terms are cheap and very targeted terms are dear. I think this was a move to drive out the small guy who uses all the tools to generate terms off the beaten track in favor of big advertisers.

This seems the opposite of Google's interests as they have frequently said they want to monetize the "hidden 20%" or the searches that are rare and weird. they have monetized the bulk 80%.

So oops?


11:23 pm on Aug 18, 2005 (gmt 0)

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I have a campaign that was getting great traffic over the last week. Then the "inactive virus" hit. I checked the words that were inactive and most got relatively low traffic so I ignored them. The one word that brought in a great deal of traffic I upped the bid on. By previous traffic standards for the words that are inactive I should have gotten about 90 percent of my normal traffic today. Instead it looks like I am running at about 55 - 60%.

Can anyone comment if leaving inactive words in your campaign might have an affect on the amount of impressions your active words are given?


11:38 pm on Aug 18, 2005 (gmt 0)

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Well I'll tell you my experience.....

I've leaned from experience that when Google does a major change like this the WORST thing you can do is start doing major changes to your bid prices... ( I guess if they are inactive then you may not have no choice or if you are losing thousands of dollars...)

But I haven't changed once single thing on my account since the change.... I spend $15,000 to $30,000 a month on advertising... ang guess what....

My average CPC has gone up 3 cents but conversions have gone up the last three days so I'm still making money.

Give me a month or two to give a final verdict but so far it is not as bad for me as it sounds like for others.

But you never know...... it's all a game you know. I sure wouldn't build a retirement plan based on Adwords thats for sure.



12:07 am on Aug 19, 2005 (gmt 0)

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I have a keyword with >10,000 impressions a day and CTR of 1-2%. This keyword is priced twice as much the min cpc, and shows as active, but will not show in search and have 1 impression for today.

These are my accounts stats in the last 2 days compared to before:
Impressions: Up 20%
CTR: Down 40%
CPC: Down 30%
Conversion rate: Down 50%
Total conversions: Down 80% (!)

For me this change looks like the world largest beta test program. I don't think the new system is not ready for production. They fix one bug and create another on a production system. I don't envy the QA manager at G who okayed going live...

But I can't go to yahoo or msn. My customers search only on G and no one else have a content network for niche players.

What bother me most is the unpredictable behavior of the new system. And the huge increase in daily tuning time AdWords now requires.

If I were unemployed today , I would start a PPC consultant career. The demand for PPC optimization outsourcing will now sore.


12:22 am on Aug 19, 2005 (gmt 0)

10+ Year Member

I have the exact same problem. All my popular keywords are active, and actually I've enabled many others popular keywords that were previously disabled. Still my bottom line performance is significantly lower.

I don't thing there is rule a here. The system is simply broken.

I mean if I bid high and I am first place for "green widgets" and I had 10 conversions a day for "green widgets" before, and I did not change my web site a bit. It's either all of sa udden people stopped liking green widgets or my ad just won't show up although it is active.

We just need to be patient until they workout the bugs. The way it looks now, that could take some time.


12:37 am on Aug 19, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

At the current rate all my keywords will be inactive next week. What's funny today is most of my keywords that had clicks immediately went to inactive requiring higher bids. That's all right Google guys I've been working hard since Bourbon to become less dependant on your traffic. I'm slowly getting there.


1:16 am on Aug 19, 2005 (gmt 0)

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Wallybob/Begood: I'm seeing something similar, today.

Based on keywords that were disabled and made inactive and click data from previous weeks...I should be at about 94% of my usual clicks today....not even close.

While traffic was OK for myself on 8/16 and 8/17, there has been a dramatic dropoff today. We're talking 30-40%...at the least. If this continues....I'm seriously hosed.

For the last several years, the key to my adwords success has been finding thousands and thousands of very targeted, hand-selected, niche keyphrases for my industries. Hundreds and hundreds of man hours were spent on selecting, optimizing, and testing of keywords that the big boys weren't even aware of.

After running some sample queries, it appears that a large number of big-pocketed advertisers bidding on "widgets" are now outranking me on my highly targeted 3+ word "widget" keyphrases....knocking me out of positions that I've maintained for the last 6 months or more.

Anybody else noticing dramatically reduced traffic today? I'm still praying that reporting is just slow to update today...but I'm guessing that is not the case; more would be complaining were it so.

Methinks I rested on my laurels a bit much....grrr.


2:37 am on Aug 19, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Chaka but don't you think this contrary to google's intent? They want people who made an ad for "green fuzzy widgets" versus the generic "widgets". Then again maybe customer service wants them to cut down the work load by reducing the number of accounts. If they could make the same dollars and kill 80% of us off it would work out.


3:59 am on Aug 19, 2005 (gmt 0)

10+ Year Member

Strange but I'm not seeing many of my "active" keyword ads now. I didn't do anything to them so what happened?

Google support is checking it for me but still no news. Apparently there is a technical fault in there.

My spend has come down. This surely can't be good for G?


7:21 am on Aug 19, 2005 (gmt 0)

10+ Year Member

This is insane!

The day before yesterday a kw had a minimum bid of 0.20.
Yesterday I changed it to 0.10 and it was active.
Today it was again inactive and minimum bid was again 0.20!

I don't want to monitor every single kw every day, what is Google trying to do!?

I'm done with this... until things cool down all my campaigns are paused.


7:56 am on Aug 19, 2005 (gmt 0)

WebmasterWorld Senior Member sem4u is a WebmasterWorld Top Contributor of All Time 10+ Year Member

I haven't seen that many changes with the new system myself. Most of my keywords had a status of 'normal' under the old system. I have managed to bring a couple of disabled keywords back and it will be interesting to see how they perform. These keywords were very relevant to the products and ad text.

However, there are a couple of keywords that had a minimum bid before, which Google now wants to charge a lot more for. For example, I had a keyword at 0.04 and I am the only bidder. When the new system kicked in it asked for 0.28 for this keyword so I raised it to that level. Today it asks for 0.55 to activate it again!


8:23 am on Aug 19, 2005 (gmt 0)

10+ Year Member

It's late, I'm tired, very annoyed and I am up in arms with the current situation.

I weathered the Bourbon Update. It took awhile to recover or let it go, but this is the worst. If you remove organic results from the equation and I am paying money I feel I deserve more respect for the big check I provide Google every week.

The worst thing Google did was go public. Why? It helped feed innovation, right? A little. But it fed the money monster and now they must squeeze innovation, quality and honesty for $$$ instead.

Anyone that believes that Google has updated the AdWords system to improve quality should really take more time evaluating the statistics. It's obvious when I have a 33.3% CTR Rate with an Ad custom to a keyword that it's of extreme quality.

The worst part is Google throwing it in everyone's face claiming that their system provides a quality score for every keyword. I would not be as angry if they were just honest about their procedures for determining bid prices, however they are trying to slide their way into a very greedy world. If it wasn't one of my main sources of income I would laugh and speak the obvious... that they are really pushing away advertisers with rediculous budget suggestions. In light of budget suggestions, remember the Google Suggested Bid Amounts... or Daily Spends? They have made those suggestions real by forcing you to pay them now! Haha.

They will be taught a lesson from the people as a whole. In general (there are always exceptions) a good percentage of Adwords users cannot afford the price hike. Even if we can skim by, it will earn less for Google due to the increase in time (activating, deleting, changing keywords and ads and all other games Google decides to create) thus with all this workload dropping profits, advertiser patience and volume. It is obvious a company can survive off of high dollar purchases but I feel that in the nature of Google's business volume is where there profits lay, they are not Nordstrom's. I truly hope that some of the board members greed will prove their unsavy abilities to predict market direction as a whole and bring in a new board of directors that understand short-term profits will not make you Microsoft.

I don't want to groan on, this is not a sympathy forum, but a forum to help us all figure out how to deal with this change. Unfortunately, I don't see much progress happening until Google realizes who pays their bills.

Since I read every single post, I do remember one person mentioning a name for this horrid update from a system that at least I could make a profit with...
what was it: Update Bipolar?

Sounds good to me as this post is making me BiPolar. Thank you Google for trying to take any profit possible without killing me. "Do No Evil" - whatever


9:43 am on Aug 19, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

More kw's being made inactive as the days go by. Where I've accepted the new increase of 50% in CPC, so these are being made inactive again and the 'entry fee' CPC then doubled!

CPC of some kw phrases so damned obscure/specialist being pushed up in cost by over 400%. Not affordable!

Last week there was only one advertiser across many of the obscure/specialist terms in my world - me.

Now, for many of these terms, there are none.


Elric di Melnibone

9:58 am on Aug 19, 2005 (gmt 0)

10+ Year Member

A New day...A new amout of inactive key, I think that system is still bugged, look at this :
Keyword1: last month 71 clicks and 1.6% CTR, cpc 0,06
Keyword1: this month 21 clicks and 1.7% CTR, cpc 0,07
Keyword1: last 7 days 9 clicks and 2.5% CTR, cpc 0,06
Keyword1: yesterday 0 clicks, 69 imp. 0% CTR
Keyword1: today inactive, they asks me 0,10.

SO just because yestarday it didn't have clicks and ctr was low but only because people is in holiday and there are just 69 impressions!
I guess competitor can send you out of business, they only have to wait for some bank holiday and then do some spam impression, so next day u have to increase your cpc!


12:35 pm on Aug 19, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Elric this reenforces the thought that the total data has been produced since the day this went live. You are fighting with three days of data so the computer can only model on what it has.


2:04 pm on Aug 19, 2005 (gmt 0)

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Has anyone noticed a lot of inactive words running at the old price of 5 cents a click? I refused to go up on most of my bids so I left them all inactive. Now many are running as usual in basically the same spot as always, but there's still an inactive notice beside the word. My CTR was fairly high on these words (4.2%) and the competitor ads don't appear to be on topic as much. I wonder if Google is slowing letting previously high CTR ads back in at the old price? After all, if no one is clicking on the ads that are showing, no one makes any money...including Google.


3:28 pm on Aug 19, 2005 (gmt 0)

10+ Year Member

Some have pointed out how if you delete a keyword calling for a higher bid and re-enter it, the message is gone.

I tried that trick on a few flagged keywords, then noticed that when you do that the word still doesn't show for ads although the warning message is gone. In my case, no ads seem to show for those words.

When you use the ad diagnostic tool, it still tells you "Your maximum cost-per-click (CPC) bid is lower than the minimum CPC bid recommended by the system for your keyword"

I suspect the message will return beneath the keyword the next time that keyword is assessed for a search query.



4:21 pm on Aug 19, 2005 (gmt 0)

10+ Year Member


Its Googles system and they certainly are entitled to have whatever criteria they want to set pricing. But I feel as though I may have been somehow misled. I was led to believe that relevence as measured primarily by CTR was the criteria for determining the "quality score". And that the higher the "quality score" the lower cpc would be in order to reach the highest possible adrank.

But it appears that the me and many poster are seeing the most specific phrases actually require higher CPC's than nore general phrases even when there is a high CTR history specific phrase and the ad in question. In occurred to me this morning ( I am slow witted I guess) that the commonality for this type of keyphrase is that the convert well for me because they are so specific.

Is it possible that some words with high quality scores are being charged higher min. bids because Google is aware that the convert better? I know AWA has stated that google conversion data is not used as part of the algorithm. I also understand that Google can't and shouldn't disclose its algorithm. But I feel as though Google could state for the record if there are circumstance where a more relevent ad or keyword ,as measured by CTR's, becomes subject to higher min bid for reasons other than CTR or competitors bids. Such reasons could include the aforementioned conversion rate, or a category penalty, such as having set minimum bid for any keyphrase of more than 3 words and including the phrase "credit card".

I am sure there are plenty of other factors Google could use. I don't even need to know the other factors. I just want to know if such factors do exist. To date I have been led to believe that my CTR, and competing bids are the only thing that should effect my CPC or minimum bid. But the "inactives" and min. bids I am now seeing lead me to believe that new algorithm is hiding other factors. By the way, some description of the other factors, if they exist, wouldn't hurt.


4:53 pm on Aug 19, 2005 (gmt 0)

10+ Year Member

If Google is using Conversion Tracking data to set the min CPC for keywords (as seems very likely, regardless of what AWA says - do you think Google would admit that Conversion Tracking is essentially a way to spy on their advertisers?), maybe everyone who uses Conversion Tracking should set the value of each conversion to a very low number...


4:59 pm on Aug 19, 2005 (gmt 0)

10+ Year Member

Very disappointed with the new keywords system. 75% of my account or more is inactive. Traffic has dropped by around 50% or more since the changes went into effect. I'm not in a position to bid more - my margins are slim enough as is. Hell, I couldn't bid more if they were asking for 20% more, let alone 2000%! So I guess I'm just sitting on my ass watching the trickle of clicks come in. Irony of it is that Google is making much less money from me now...

Tropical Island

5:11 pm on Aug 19, 2005 (gmt 0)

WebmasterWorld Senior Member tropical_island is a WebmasterWorld Top Contributor of All Time 10+ Year Member

Our area name is the same as a very popular alcoholic drink.

We have been under this search term in Over for years and get a good CTR. We have never been able to keep it in Google.

With the new system yesterday we added this word at 5. It took quite awhile for it to start showing however we received a number of clicks as of last night.

This morning I woke up to find the word disabled (sorry, inactive) and a new minimum of 10.

I deleted it and put it back in at 5 with [ ].

Let's see if I can keep it in for more than 24 hours. This word is not worth 10 but it's fine at 5.

<edit> Even though it was added 5 hours ago it is still not showing for searches.


6:03 pm on Aug 19, 2005 (gmt 0)

10+ Year Member


I am sure there are plenty of other factors Google could use. I don't even need to know the other factors. I just want to know if such factors do exist.

from the adwords faq:

...Quality Score (determined by your keyword's CTR, relevance of ad text, historical keyword performance, and other relevancy factors)...

more info here:



6:49 pm on Aug 19, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Strange, I have not been affected at all, and I rarely bid over 10 cents. Some of my keywords have a CTR less than 1% and they are still active.

I understand some peoples pain. Google messed up the free search engine, so people switch to adwords to at least guarntee profict margins and steady income, and then Google goes around and mess with adwords, by setting certain minimuns.

Gee and I thought price fixing was illegal.


8:19 pm on Aug 19, 2005 (gmt 0)

10+ Year Member

I have a number of campaigns with both good and bad happening across them. I have 2-3 campaigns where - without any adjustment on my part - the bid price for certain keywords has dropped to .04 instead of the .05 or .06 that I had it set at. I also have a couple of campaigns that seem to be getting a real workover with specific keywords getting marked inactive with the suggested bid going up most often 100 - 400%. Here is what I find myself thinking right now:

-This will not force me out of adwords but...it is making life more difficult and may reduce my traffic numbers and thus my potential profits. What it has done is reduced some "brand loyalty" I had towards Adwords and will probably make me explore overture and MSN's version more than I might have.

-I am baffled at seeing keywords of mine that get a low CTR (.05 or less) and show as low as 25-40 positions not be marked inactive while some of my keywords with good CTR (1-4%) and position (2-5) are made so with a demand for better quality or more money.

-Even on campaigns that seem to be benefiting the end result is a lot of work. Each day I am having to work through a whole new batch of inactives. The process can be time consuming and I'm not getting a lot else done right now. I assume this will sort itself out over time but for now it feels like an oppressive system.

-It seems - as others have suggested - that some of the more focused terms I have are more likely to be marked inactive. This clearly goes against everything I had learned about Adwords from the past and I am eager to see how it shakes out in the long run.

Love to share more but I have to get back to scouting out for inactive words. hehe


8:57 pm on Aug 19, 2005 (gmt 0)

10+ Year Member

I just got off the phone with google rep.

me: All my completely relevent words (3%ctr and better) just went inactive, but my not as relevant words are still active.
rep: hmmm... that's interesting.
me: my daily spend is now up by 650%
rep: HA HA!

I swear to almighty God the friggin %&*$* laughed at me! I can't beleive this. It's funny to her that my company got price gouged by the new system.

rep: Maybe you shouldn't use terms that are not relevent.
me: Not one of my terms are less than .5% ctr. When they go below that, I delete them. Can you tell me an example of what is not relevent?
rep: What about this one.. "red widgits for sale"
me: But the ad says "we sell red widgits. buy one, get one at half price. www dot red widgits for sale dot com". Istn't that right to the point and relevant for that key phrase?
rep: well, I don't think that's very relevent.


I guess I don't know what relevent means anymore.



10:25 pm on Aug 19, 2005 (gmt 0)

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this dog won't hunt


12:19 am on Aug 20, 2005 (gmt 0)

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Ha - I can't resist sharing this one.

I was bidding .05 on a keyword phrase and the new algo lowered the cost down to .02 so my 2 clicks today only cost me .04. However - it was then made inactive even though the avg position was 1.8 with a 3% CTR. Now I have to bid .10 for that word to be active again. The kicker is this - there's only me and one other person bidding on that word phrase!

So - the algo assessed my word and charged me less than I bid then made the word inactive and requires I double my original bid all within one day.

That's a schitzophrenic algo.


12:43 am on Aug 20, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

I'm intrigued to see through this thread that some observations date the precursors to this pre-planned chaos as having been reported around late 2004 or early 2005...

That aside:

When my chairman comes back from his extended vacation in a couple of weeks time I have to explain why adwords isn't working for our company anymore - at the least I have to try and explain to a layman what has happened in the last week or so...

Can you imagine trying to use the current 'explanations' to someone who - on my say so - signs off the bills.

"Sorry, Syzygy, Cost Per Click I can understand, and I know that our Cost Per Click has been accepted, but what do you mean it no longer has sufficient Quality? It's been working OK for the last two years..."


"Sorry, Syzygy, I don't quite understand this. You're telling me that our Quality adverts are now too cheap as far as Google is concerned and we must now pay 50-400% or more to show exactly the same adverts we did last week?"

He continues: "What do you mean it no longer has sufficient CPC? It's been working OK for the last two years..."

"Okay", says the Chairman, "go and justify it to the Finance Director and explain exactly what's going on..."



12:49 am on Aug 20, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member


Do you have any vacation saved up? Might be a good time to take it.


1:58 am on Aug 20, 2005 (gmt 0)

10+ Year Member

gas, oil, milk, cheese and other various living costs go up, so do other things in life... i was paying $1.95 for a gal of gas last week, this week i am paying $2.65. i'm not loosing sleep over it.

those that are complaining and only spend $200/mo on advertising need a reality check. each month we spend $7,000 on advertising,. but guess what? in return we make 8x that.

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