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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.

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.

8:49 pm on Aug 15, 2005 (gmt 0)

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



Google Pricing Change Happened

Sharp eye you have there poster_boy. ;)

The changes have not actually launched yet - and what you are seeing is some limited pre-launch testing as we get things ready for prime-time.

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.

My apology in advance for any confusion that this testing may cause.

AWA

8:53 pm on Aug 15, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Testing on a production system?
Interesting concept.
9:18 pm on Aug 15, 2005 (gmt 0)

10+ Year Member



Hi AWA,

I am one of the few who do see the changes. I am not sure what you mean by testing. So Adwords will only accept the new bids for my keywords and will not show them even if my bid is above the Min Bid?

I see that Adwords is going to be down on Aug 19th. Is that the date for the real change?

Also will the Min CPC be available through the API?

9:49 pm on Aug 15, 2005 (gmt 0)

10+ Year Member



Testing on a production system?
Interesting concept.

Yes. Very "interesting".

Why they just don't ask some users to be the beta testers? If they offer something like: "We are looking for users who will help us to improve our great system and test new features. The testers will receive x% discount for their AdWords campaigns."

I am sure that many users will be intersted in, the costs will be very low and Google will not look like amateurs that are testing on a production system.

10:12 pm on Aug 15, 2005 (gmt 0)

WebmasterWorld Administrator ewhisper is a WebmasterWorld Top Contributor of All Time 10+ Year Member



I find it interesting that I'm seeing these new messages at the same time I'm seeing Google search results that haven't been around for a couple years. Green boxes, interest bars, the old blue tab system.
10:17 pm on Aug 15, 2005 (gmt 0)

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



I am one of the few who do see the changes. I am not sure what you mean by testing. So Adwords will only accept the new bids for my keywords and will not show them even if my bid is above the Min Bid?

Even if you do see the test UI, your account will continue to run just as before. There is no need to change anything in reaction to the test. However, if you do make changes, the changes will be saved.

I see that Adwords is going to be down on Aug 19th. Is that the date for the real change?

No, if you are seeing a UI message, it refers to system maintenance.

Also will the Min CPC be available through the API?

Yes, it will be.

AWA

10:19 pm on Aug 15, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



I got the new interface.

Some of the minimum bids are killers. I am going to lose a lot of keywords even though they were getting a lot of impressions. But maybe there is a silver lining on the adsense side.

10:31 pm on Aug 15, 2005 (gmt 0)

WebmasterWorld Administrator ewhisper is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Some of these min CPCs are really high.

Is there another reason besides ad/keyword quality that Google is using this new system, like to clense it of some keywords and use less server resources?

10:43 pm on Aug 15, 2005 (gmt 0)

10+ Year Member



I'm seeing some really high minimum bids, but also some very low ones (as low as 3c on some words). I changed most of my bids before seeing this thread - hopefully the ads I lowered down to 3-4c will continue to run...
10:46 pm on Aug 15, 2005 (gmt 0)



I can't wait for the prices to go even higher (sarcasm). Since middle July when they made a slight algorithm change we've seen prices up almost 40%.

Yahoo, get ready to take our money.

11:00 pm on Aug 15, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



WOW.

I just realized I can change bids to below 5cents. I set a bunch of them to 2cents. Then using the filter to select 'inactive' keywords I set those to 3cents and on up to my personal limit. a lot of work.

12:16 am on Aug 16, 2005 (gmt 0)

10+ Year Member



Looks like the system crashed. I had the new pricing and then Adwords went down for a minute and now I got the old system back.
12:17 am on Aug 16, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



I was in the middle of setting all my minimum CPCs and they yanked the new system out from under me. I'm back to the old system.

I guess I should have waited until production testing was finished.

12:31 am on Aug 16, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



So what's the consensus on this - is it going to increase or decrease CPC's on average, and for what reasons?
12:40 am on Aug 16, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



I'm looking forward to lowering my ad costs by $200 per day with hopefully not to much loss in visitors.
12:45 am on Aug 16, 2005 (gmt 0)

10+ Year Member



As am I however, I have a feeling with lowered bids will come higher expectations for performance.

I don't really understand why they let you lower your bids to $.01 but still charge you $.05. I don't really care if it's a UI thing or not - you should honor what the system allows you to do.

1:02 am on Aug 16, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Now that they removed the new system from me all my keywords that were bid < 5 cents are now not showing.

When I was programming for a living I would have been fired for abusing users like this.

1:05 am on Aug 16, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



>> is it going to increase or decrease CPC's on average, and for what reasons

I am seeing many of my keywords (even with double digit ctr) inactive with a suggested minimum bid almost double and in few cases ten times my current max cpc!

Think this is a effectively a move by google to increase min cpc in the name of quality control and 1 cent bid

3:25 am on Aug 16, 2005 (gmt 0)

10+ Year Member



I am seeing many of my keywords (even with double digit ctr) inactive with a suggested minimum bid almost double and in few cases ten times my current max cpc!

I know you don't mean to, Gopi, but you're making me ill :)

patient2all

6:53 am on Aug 16, 2005 (gmt 0)

10+ Year Member



It would be nice if Google told us how many keywords are inactive at the Adgroup level. A little notice under each Adgroup : "2 Inactive Keywords" as an example.

Opening up each Adgroup to find the inactive keywords is taking forever. And is it me or is Adwords access getting slower?

11:59 am on Aug 16, 2005 (gmt 0)

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



Maybe this is the time to consider increasing my Google stock?
1:00 pm on Aug 16, 2005 (gmt 0)

10+ Year Member



The conversation at the Googleplex....

"Hey guys, I know our only source of income is adwords, so how can we squeeze some more money out of it?"

"Raise the minimum bids to $.10?"

"No, that would make us seem too much like Yahoo. I know, instead of letting the market determine how much an advertiser should pay, let's develop a super-secret formula for "quality" and we'll be able to pump up minimum bids to whatever we want them to be!"

"Awesome - the shareholders will love us!"

1:11 pm on Aug 16, 2005 (gmt 0)

10+ Year Member



Yep, that's what happened - I tested the system, even if you try to add a keyword you know nobody bids on (like "htvmpv24")
the minimum bid is 10 cents. I guess that bid below 5 cent happen only with keywords that were (unsuccessfully) used prior by other advertisers - perhaps Google has an entire library of "loser-keywords". But the essense of the algo change is "new keywords are 10 cents or more". How exciting.
Is this going to apply to AdSense-side ads too?
1:24 pm on Aug 16, 2005 (gmt 0)

10+ Year Member



I am very concerned about the upcoming change.

Let's start with the obvious:

1 >> Looking from a free market economy perspective, if demand exceed supply, prices rise. This is the case from Google's AdWords product. Google is a corporation trying to maximize shareholder investment so they can hardly be to blame.

2 >> This change is going to increases Google's profits a great deal.

Take for EXAMPLE >>

Google drops 5 cent :minimum bid" keywords to 2 cents. On the flip side, Google raises "before change" 5 cent minimum bid keywords to 30 cents minimum.

Google loses 3 cents per click on the "lowered minimum bid" but gains 30 cents per click on the "rasied minimum side".

Result >> This change + the proper algorythm = Cash Cow. Every dollar generated from this "change" drops to their bottom line.

In summary, this change does three things-

1. Enhances the quality of Adwords (higher prices means more selective bidding).

2. Increases revenue for Google.

3. A lot of pissed off advertisers with small budgets, or small margins and affiliates.

1:54 pm on Aug 16, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



"...This change is going to increases Google's profits a great deal..."

This is the whole purpose of the new changes...not customer service towards the advertiser base...

2:08 pm on Aug 16, 2005 (gmt 0)

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



We are a very small business and as advertising costs started reaching in excess of $#*$! per month it became a strain on our limited resources.

In March we started slowly adding AdSense to our sites and have reached the point where the new revenue now covers all our advertising costs.

This adding of AdSense has not hurt our main business at all.

We are now protected with whatever happens on the AdWords side. If costs go up our AdSense will go up. If bids go down then our AS revenue will go down but in all cases it will be a push.

I would suggest that any of you who are concerned with what is happening and do not currently have AS consider doing so.

Internet marketing is an evolving environment. Do not stick your head in the sand as you can't change it's direction. Instead evolve along with it.

2:14 pm on Aug 16, 2005 (gmt 0)

10+ Year Member



But the essense of the algo change is "new keywords are 10 cents or more".

DevidDeprice I hope you are just not right. If you are right it is VERY bad news.

Here
[webmasterworld.com...]
AWA wrote:

It is anticipated that the majority of keywords that are active should not see an increase in the minimum bid required to show on Google (currently USD $0.05).

Only now I can see that this AWA statement and your experience may be both right. I "bolded" the reason in the quote of AWA statement - it seems that if the word is already active and has good Quality it will reach 0.05, but the new words will start on 0.10.

Hm, I am no sure if I like it. Let's hope I am wrong.

2:40 pm on Aug 16, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Appearently this should rise the eCPM for publishers, but as a publisher I actually see lower eCPM.

What are your comments on this?

Thank you.

2:43 pm on Aug 16, 2005 (gmt 0)

10+ Year Member



Dave!

I am right, you just did not read the post carefully. All of my existing keywords stayed at whatever price they were (except for the inactive ones). BUT all new keywords I added started at 10 cents, even the ones that I know no-one bids on.
Essentially, we are repeating Overture's situation - we (existing advertisers) will have lower grandfathered bids at 5 cents (or less in some instances). BUT as soon as you start adding new keywords, you'll be paying a minimum of 10 cents for them, at least during the initial stage. MAYBE, you'll be able to lower bids later, after the campaign ran for some time, but the effective new low is 10 cents, not 1 cent as advertised (it was during the short couple of hours when the new system was available).
If you don't believe me, just add any gibberish as a keyword, like "jfjdfkdfj1" - and believe me, you can't trigger that keyword, unless you bid 10 cents (in the new algo, not the old one). So right now, when they reverted, I am adding new keywords like crazy, because I can still add them at 5 cents before the new system becomes permanent.

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