New Adwords Changes Could Mean Higher Costs for Advertisers

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Late last week, Google informed their Adwords Advertisers of upcoming changes to the usage of keywords and minimum bids. The Â?simplified keyword states and quality-based minimum bidsÂ? looks at first glance to make life significantly easier for the average advertiser, digging deeper raises many concerns however.

– The latest change to the underlying algorithms of Google Adwords seems to make things easier for advertisers. No more “normal”, “in trial”, “on hold” or “disabled” keyword states – a simple “active” or “inactive” status will now show advertisers how each keyword is doing.

This certainly simplifies the management of campaigns at a glance and if an advertiser really wants to make a keyword trigger an advert (regardless of past performance), they can now increase their minimum bid to that recommended by the system and/or increase the quality of their adverts/keywords.

The new algorithm may have an unfortunate side effect however – Adwords is becoming increasingly popular with new advertisers coming on board all the time. In addition there are some very large corporate advertisers who bid on hundreds of thousands of keywords.

With the new changes, if an advertiser wants to get on the first page of results they can guarantee position but at a price.

Tom O’Brien, Director of http://www.pdqprospects.com said: “There is the potential new advertisers will continually come into the market and pay top dollar in an effort to stay on page 1. Due to the costs involved there will be a lot of advertiser churn initially and existing players may increase their bids to counteract the newbies – thus resulting in increased advertising costs for all on popular terms”

“This problem could last quite some time and will be dependent on the number of new advertisers, the big brand players and the actual details of the new algorithm. This is a major change to Adwords and there is a lot of conjecture about how this will pan out”

One thing is for sure, those advertisers who do more homework with detailed keyword research, themed ad-groups and a focus on conversion on their own site will always come out the best.

PDQProspects.com has developed an e-mail series detailing other Adwords tips and tricks for website owners. It can be obtained by visiting:

http://www.pdqprospects.com

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Tom O'brien