July 14, 2006

Google AdWords - changes bite advertisers

by Brian Turner

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Google

Some advertisers have complained that recent changes to the Adwords advertising system are sending PPC budgets sky-high.

The changes implemented by Google include an unknown “quality rating” factor, which directly affects bid prices.

Where Google feels the page the ad leads to is of relatively poor “quality”, the bid price rises for keywords used to advertise that page.

A specific reason for the policy is almost certainly to help remove bottom-end affiliate bidders, as well as those using “arbitrage” - bidding on low-cost Adwords keywords, to send traffic to pages publishing AdSense for higher-paying keywords.

The impact has been variable, with some affiliates reporting a huge increase in prices, while users of arbitrage have reported little overal impact.

However, the most important change is how it will affect general ecommerce site budgets, and at present it’s difficult to get a balanced report on what effect it is having.

Some ecommerce sites are reporting suddenly inflated budgets, others are reporting no change.

While any change to the quality of the Adwords service is likely to be welcomed overall by advertisers, the concern at present is that the lack of transparency in the Adwords “quality” rating system may be hurting some advertisersunnecessarily.

In related Adwords news, Google is experimenting with radio format ads for advertisers.

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Story link: Google AdWords - changes bite advertisers

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