Google Announces AdWords Enhancements – Real Time Quality Score Calcs and No More Minimum Bid

By Mike Churchill and Jim Gilbert

Google announced some upcoming AdWords changes that affect the way that they handle the Quality Score calculations. These changes have been made to improve the accuracy of the Quality Score calculations and to improve the usability of the AdWords accounts. They were announced on 21 August 2008, and will initially be rolled out to a few PPC customers for feedback, with the rollout to the full AdWords client base occurring over the next two months.

There are four enhancements announced:

Quality Score Timeliness

Google will now be calculating the Quality Score for your ad each time it matches a search query. In the past, the Quality Score was only recalculated periodically, which could cause some lag in the improvement to Quality Score once the problems were corrected. By calculating the Quality Score “on-the-fly” your ads will be more likely to display when relevant (and less likely to display when not).

“Minimum Bid” to be Retired (but not really)

The Minimum Bid calculation was added to Google AdWords about three years ago (July 2005), and has been the bane of many PPC advertisers. We believe that the Minimum Bid calculation was a work-saving measure that allowed Google to limit the number of phrases to be considered for a particular search query and provide better speed-of-service to the searcher. As a result, though, many phases would be turned off, and an inattentive PPC manager could be caught unawares. Users of the Google API and the offline AdWords Editor will still see the Minimum Bid field until these tools are updated, so while they no longer show in the Google GUI, they are still being calculated (based on the new Quality Score calculations).

As a part of the real-time Quality Score improvements, in the GUI, the Minimum Bid metric is being replaced with….

“First Page Bid” Calculation

Google will now provide an estimate of the bid needed for your ad to be displayed on the first page of the search results. There are a couple of factors in play here: The ad’s Quality Score, the Exact Match version of the keyword (even if you are using broad or phrase matching), and what your competitors are up to.

Keyword Search Deactivation Removed

The final change that Google is implementing is the removal of the “inactive for search” flagging. In the past, when the Quality Score and max bid factors were too low, Google would mark a keyword phrase as inactive, and ads would never be displayed for those phrases. When these changes roll out to your PPC campaigns, keywords will no longer be marked as “inactive for search.” Note that this means that keywords marked as inactive today will become active again (unless already paused or deleted). Google indicates that the same reasons that caused the keywords to be marked as inactive in the past will likely keep the phrases from generating much traffic.

What does this mean to you?

In the very short term, nothing. Google will be rolling these features out to existing PPC accounts over the next two months, so you might not see these changes in your campaigns immediately. In the mean time, we recommend reviewing your accounts for “inactive for search” keyword phrases, and consider whether these phrases should remain in your accounts or be paused/deleted.

The “First Page Bid” metric is a welcome addition, and will make managing campaigns and evaluating popular keywords much easier.

The real time Quality Score calculation should make your PPC account more responsive to changes in ad copy, which in turn should make the accounts perform better quicker.

Finally, note that these changes affect keywords, ads, and bids in the Search Network – the Content Network is unaffected.

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