Quality score and minimum cpc

[hercules]

Google combines 2 sorts of data
1. keywords and groups of keywords, google knows which words form a group
2. conversion and roi data for these groups of keywords from analytics

bingo they know that a bid for a financial related term can't be 0,04 dollar cent. although all you'r other "quality" factors are ok

Don't beleive it? Listen to what google has to say about "smart pricing" here
[services.google.com...]

Please don't be naive it's all about the money.

[briggidere]

As an advertiser and not a publisher this makes complete sense to me so whats wrong?

If site A converts better than site B, the click on A is worth more. No?

Logical

[trannack]

Having jus seen the link - I expect to see a plethora of "review-type" sites rearing their heads - as if there aren't enough already.

It sort of contradicts the thos of "content is king". If you provide a site with useful, original content you are more likely to be smart-priced than another "review" type site.

I really think this smart-pricing bit is off the mark. IMHO :)

[HitProf]

"Ajusts click prices to correspond to expected value" translates as: price will go up with conversion rate...

I've just seen the minimum bid for one of our over 14% conversion rate keywords go up to 8 euros.

[edited by: HitProf at 6:24 pm (utc) on Nov. 28, 2006]

[hercules]

In this piece about smart pricing google says it measures how sites are likely to convert to decide which price they are gonna ask their advertiser.

How does Google decide if a sites converts wel is the question you can ask yourself? Well they got Google Analytics... so they know what converts and what the roi is on certain topics/ groups of keywords. They can very easily raise the price of (groups of) keywords that are delevering high ROI and say your "Quality Score" or "Google Profit Score" is too low. Google analytics tells them exactly what they can charge for every kind of topic on the internet. Belongs your keyword to a high roi group. Bang! up goes you're minimal cpc's

Don't beleive it? Ask yourself why they don't be more open about what they consider Quality. Is it good navigation and lots of info about the subject? why not tel us? What will they loose? They get better quality sites advertising with them and relevancy will go up!

Where will this lead to?
Bad case scenario is that this "Google Profit Score" will get more and more used in the adwords algo and prices will go up.

What can i do?
Perhaps buy stocks or campaign for eveybody in you'r line of business not to use Google analytics anymore

[hercules]

I'm pretty sure that price is a big component. I'm a google gap running dozens of campaigns for very big companys and small ones as well as private ones. The "Google Profit Score" now only affects low bids in my experience. But it will be more important in the near future and will become the main factor.

So buy stock or build a high quality site (whatever google thinks is quality) with a superb business model (scam and overcharge your customers) and you'll might be able to rely on adwords in the future as the bids will go up and up.

[Hiccup]

Which is why if you are running analytics or using their conversion code, you're just giving them exactly what they want FOR FREE.

:)

[edited by: Hiccup at 9:43 pm (utc) on Nov. 28, 2006]

[RhinoFish]

i think smart pricing discounts sites where it's likely that conversions are poor - when i read their intro / release description here:
[adwords.google.com...]
it seems to discount sites where it's likely to convert lower than average.

so i've always viewed smart pricing as a discounting mechanism, not a gouging mechanism.

and i'd suggest that if you're a webmaster running adsense, and you've got good traffic, providing more info via G Analytics means your clicks won't get discounted as much cuz G can see their quality.

and as an advertiser on the content network, smart pricing seems to only reduce my costs - i set the max cpc via my settings and G works to discount clicks where it's apparent to them that the clicks may not be top notch (poor conversion stats or unproven / unknown).

i'm not saying smart pricing is perfect, but in the aggregate, it would seem to discount pricing for advertisers, raise roi, stress quality to webmasters and somewhat police things as well (via financial disincentive for shady, unfocused adsense clicks).

if the alternative is to not have it, i'd choose to have it - both as an advertiser and as a publisher.

[edited by: RhinoFish at 3:00 pm (utc) on Nov. 29, 2006]

[RhinoFish]

"Which is why if you are running analytics or using their conversion code, you're just giving them exactly what they want FOR FREE."

as an advertiser, i'd assert it's not just G that wants this info - i want them to have it too to better price in the value of the content clicks i'm paying for...