New Google Adwords Formula = Just Pay Us More

Michael Gray

By Michael Gray
In Google  

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The lunacy that is the Google adwords formula is actually really amusing lately, let’s take a look and dissect it line by line shall we …


Google AdWords Help Center: How is the formula for top ad placement changing?

With this new formula, instead of considering your actual CPC, we’ll consider your maximum CPC bid, which you control. This means that your ad’s eligibility to be promoted is no longer dependent on the bids of advertisers below you. Therefore, if you have a high quality ad, you now have more control to achieve a top position by increasing your maximum CPC.

Your actual CPC will continue to be determined by the auction, but subject to a minimum price for top spots. The minimum price is based on the quality of your ad and is the minimum amount required for your ad to achieve top placement above Google search results. As always, the higher your ad’s quality, the less you will pay. And you will never be charged more than your maximum CPC bid.

OK there it is in it’s unchanged entirety now let’s lay it open bare why don’t we …

With this new formula, instead of considering your actual CPC, we’ll consider your maximum CPC bid, which you control.

We want to know exactly how much we can extort out of you before you’ll bail, and rather than playing guessing games, we’re going to work only with that number and ignore everything else. The fact that it costs you the most money and makes us the most profit is purely coincidental … really …

This means that your ad’s eligibility to be promoted is no longer dependent on the bids of advertisers below you.

We’ve figured out that if you bid blind, and have no idea what the other people are bidding or paying (except for you pesky blackhat ppc seo’s with two accounts … oops …) it gives us the ability to extract the most profit out of you because you’re likely to over bid. We also want to make sure that we charge you the most we possibly can in case somebody below you has figured out how use the system correctly.

Therefore, if you have a high quality ad, you now have more control to achieve a top position by increasing your maximum CPC

Did we mention how much more likely we are to show your ad the more you are willing to pay us … pay no attention to that growing pile of profits over in the corner. Notice how we don’t confuse your goals of paying as little as possible with our goals of making as much profit as possible

Your actual CPC will continue to be determined by the auction, but subject to a minimum price for top spots.

Did you notice that “minimum price” wording … pretty slick how we avoided saying things were price fixed wasn’t it. How are we going to keep getting free breakfast, lunch and dinner here at the plex if we don’t take a few necessary steps, the ends totally justify the means don’t cha know.

The minimum price is based on the quality of your ad and is the minimum amount required for your ad to achieve top placement above Google search results.

You gotta love the quality score, it’s mystery factor X, pretty much allowing us to get whatever number we want on the other end. It’s like simple algebra, and we googlers love maths. We could have just said “we’re going to take the most you are willing to pay and charge you whatever percentage of it we want to, and if you aren’t bidding high enough we’ll totally say your quality score sucks” but well we like to put all that college edumacation to work and bamboozle with big words arranged in complicated ways, so you’ve got no idea what’s really going on …

As always, the higher your ad’s quality, the less you will pay.

Since you have no idea what the quality score is, we won’t tell you, and it’s completely out of your control, that’s pretty much an irrelevant factor for you isn’t it. Oh you noticed we’re the only one’s who know what that score is … and that we control it … which means we can charge you whatever we want … Listen have you seen all this yummy food we get to eat for free !!! Don’t think of it as paying too much … think of it putting food in the mouths of happy googlers who will find more ways to charge you more next year ….

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{ 16 comments }

michael webster August 10, 2007 at 9:18 am

I posted a shorter remark on webmasterworld, but to the same effect.

Google has hired a bunch of pretty bright economists, auction theory guys.

This is clearly establishing a reserve price for the ad auction on the search network.

What is needed is a tool to cooridinate keyword bids so that every advertiser can lower their max cpc – don’t get caught up in buyer’s regret.

Jason Golod August 10, 2007 at 11:57 am

LOL. If it looks like a duck and sounds like a duck…

Richard Ball August 10, 2007 at 12:19 pm

What’s interesting is that there will now be 2 minCPC values:

1) minCPC to be active for search
2) minCPC to be eligible for top placement

Only the first is visible in the AdWords interface. On the one hand, that’s pretty lame. OTOH, if they did publish that 2nd minCPC, there’d be some pretty crazy bidding wars and they really would boost top line revenue.

I wonder if they’ll provide this 2nd minCPC to select customers?

Rhea Drysdale August 10, 2007 at 2:15 pm

Nice! From now on I only want to get my Google updates from you. When I saw this ridiculous notification it became obvious that paranoia isn’t paranoia if they really ARE out to get you.

“As a result, you may see a change in the average number of clicks and average CPCs for impacted ads.”

–> In other words, all of your ads will be impacted and hopefully you aren’t paying attention.

Search Novice August 10, 2007 at 3:09 pm

So…

Shouldn’t Google be able to sniff out all those “pesky blackhat SEO’s with 2 accounts”?

JT

Terry Howard August 10, 2007 at 4:30 pm

Amen Graywolf! You know, there is a stark difference between what the average end user of Google search thinks about the company and what us AdWords users think. Getting answers and support from the Adwords team is retarded in its difficulty and the fact that I can’t even get a clue as to whether my adjustments have made a dent in the mysterious Quality Score is just ridiculous! They clearly have a “we’re the big boys, we have no reason to make you a happy customer” mentality and that kind of shit is what eventually eats at your market share. I got a guy over at Business.com and MSN that fall over themselves to help me in person and immediately on any issue I have. It’s not a good practice to rely solely on your market share to hold customers, eventually that can falter (just ask Microsoft how that works.)

Terry Heath August 11, 2007 at 10:31 am

And all this time I thought Google was my friend, a benevolent search engine who existed only to direct me to all the information I wanted, give me free blogs, free webmaster tools, free online storage. My Utopia is shattered!

shayne August 12, 2007 at 11:19 pm

we need a revolution, overthrow google!

Urban Kudos August 14, 2007 at 6:07 am

Yes, Google is playing to their advantage as the market leader – By finding ways to increase their coffers.

Isn’t that just how the the commercial world works?

Terry Howard August 14, 2007 at 12:44 pm

No, it works based on a balance of providing a service that holds value relative to the costs. If the costs associated with running a Google account go up while the quality of service and the end result, the quality and amount of leads/sales, declines, then you will lose customers. Nobody in their right mind would pay a cost per lead that exceeds their profitability levels, regardless of how many eyes playing their game buys you. In the end, the CPA is king, and Google needs to learn that fast. It also wouldn’t hurt if they acted like they gave acrap about the people who are putting their money in their coffers, because that can swing what people are willing to stomach in terms of CPA to the + or – based on customer service as well.

Andrew August 15, 2007 at 10:36 am

Seems like google is trying to put an end to affiliate marketing via ppc.

IMO, google’s job is to provide relevant results, in both paid and natural search. If an AdWords ad with the keyword “blue balls” points to a page with a picture of blue balls and a quick description of blue balls and some basic price and merchant details, isn’t that extremely relevant?

If i click a sponsored result (or any ad for that matter) aren’t I looking for somewhere to buy that? I don’t want a fluffed 30 page content site about blue balls, if i wanted all the in depth information available other than specs and pricing details, wouldn’t i have looked for some more info or reviews in the natural results?

Give us a friggin break google.

printnpost August 22, 2007 at 5:19 pm

thanks for the translation!…I def dont like the google adwords system. I felt it was just scamming me..and the translation only keeps me thinking it.

Edwin August 27, 2007 at 4:04 am

I think you are right. I work with acouple of guys who are all buying keywords like crazy, and they all drew the same conclusion and got really upset. The coming time I will be watching my costs more closely then ever, before they trick every last $ out of my pocket.

TSMontana September 18, 2007 at 12:19 am

If there was ever a time to make sure your landing pages provide useful original content (reviews, articles, blog posts, etc.), and rank high in organic searches, now is the time.

allan November 14, 2007 at 11:57 pm

I am writting an operating system called “TheZoid” at http://thezoid.co.uk

I have no choice but to add this due to nasty search engine which will not advertise my busuiness called google addwords on http://www.google.co.uk which wishes to charge very high prices and as an excuse call my website very poor quality. If you manage to find this website as http://www.google.co.uk is trying its best to keep it out of its search engine that is unbelivable. I would like to know why google cannot recognize TheZoid as an operating system !!! Please send http://www.google.co.uk lots of emails and tell them that shitting on the small man is good business sense. If google wishes me to remove this from my website than advertise my business fairly, at resaonable rates !!!!

Did you know google.co.uk wishes to charge upto five pounds for one Click for the word “Operating System” and many other words, I would like to know what is this Bullshit !!!!
Please show your outrage by boycotting the google search engine !!!!

This message was posted on 15/11/2007 just after I cancelled my google adwords account which will not advertise my business. I will not pay stupid prices for one click for one keyword !!

If you work at http://www.google.co.uk and find this fucking offensive then I am fucking hope so and you can go fuck yourselfs. PS keep pissing of the small man, and I hope you go out of business !!!!

Alex November 27, 2007 at 11:35 pm

Google doesn’t think your page meets their quality guidelines, but they will gladly sacrifice quality for the right amount of money.

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