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I'll try some tweaking tomorrow to see what I need to do to get it back on top and how much that will increase my CPC.
[edited by: Rehan at 2:43 am (utc) on Aug. 23, 2007]
For kicks I unpaused a campaign that was paused in 2005 -- the keywords in this campaign under the old rules would be able to get #1/2 placement with roughly $3/click. However, everything was inactive unless I bumped to $10/click. Wow. For continued kicks, I did this for 15 minutes and indeed it went to the #1/2 position, but was charged that nearly $10/click. Moving the spend down to $9/click made the keywords inactive again, even though that would equate to #3 under the new top ad placement rules.
Long story short, under this new formula, just export out the data on paused campaigns and create a new one, nuking the old one.
I realize the $10/click quality issue has existed for a while now; the purpose of this was to inform individuals that while a campaign is paused that quality scoring is not paused, so the time period of not showing ads for queries appears to work against advertisers. Just start over. [/edit]
[edited by: JoeSinkwitz at 4:45 pm (utc) on Aug. 23, 2007]
It is always good advice to adjust ones max CPC down to the absolute highest one is willing to pay but it appears to be even more important now with these increases.
Agreed that this is a good principle, regardless.
By the way, this same advice is given in the recent Inside AdWords blog post. Excerpting, with bolding added by me:
[...] Since announcing this improvement to the top ad placement formula, we've received lots of questions from advertisers who are curious about how their accounts may be affected. Advertisers with ads in or near a top spot may begin to see a change in the average number of clicks these ads receive, and also in their CPCs. The degree to which your clicks and CPCs may be impacted will depend on a number of factors, so it's difficult to say today how much of a difference you can expect to see. Therefore, rather than making adjustments now based on assumptions, you may want to monitor your account as-is for the next few days or weeks to see how much of a true impact the improved formula will have.
If, on the other hand, you are thinking about making adjustments now, keep the following in mind:
* Review your account for maximum CPCs that are higher than the maximum amount you're willing to pay.
* Optimize your accounts to keep your costs down and your performance high. [...]
I also came across this very helpful tid bit at Google:
The minimum price for your ad to achieve top placement above Google search results is based on your ad's quality.
First, your ad must pass our high quality threshold for eligibility to appear in top spots. If your ad is shown in a top spot, its price will be determined by the auction, but subject to a minimum price for top positions. This minimum price varies based on the quality of each ad per search query. For this reason, our system doesn't display the minimum price.
As always, the higher your ad's quality, the less you'll pay. And you'll never be charged more than your CPC bid.
This is a bit of information I hadn't seen before but notice how the minimum bid for the top spot is not a flat price but rather a rolling price based on your ad's quality score?
Many of my keywords in the top spot have "Great" quality scores with minimum bids in the .04-.06 range.
So it looks like every advertiser in the top spot will have a different minimum "top placement" bid based on quality scores.
This was definitely not mentioned previously and makes more sense to me.
EDIT: The above info from Google had been stated before. Guess I just never saw that individual help page before.
Unfortunately I can't afford all of it right now so I'm going to have to use ad scheduling to kill some of it off..