AdWords Changes Focus on Flexibility, Keyword Quality

Google's planned revamp of AdWords will give advertisers more control over the ads that run, and in some cases lower keyword bids, Richard Holden, director of product management at Google, said yesterday.

Advertisers will have more of a chance to bid for their top keywords, as Google said it will change AdWords in the coming weeks so bidding is based on quality — each keyword will be assigned a Quality Score — rather than treating all keywords the same and charging the same price.

“We used to disable keywords at a certain level,” Holden said. “Now, if you're an advertiser and you feel this [keyword] will perform well, even if it's deemed with a lower Quality Score, you will be able to bid a higher amount and still run that word.”

Google also will change keyword rates. Instead of a flat 5-cent minimum pay-per-click rate, the rate will vary based on the Quality Score.

“We try to look ahead of time whether a word is a high-quality keyword, whether it is a word that might perform well or not perform well,” he said. “If it is a high-quality keyword, we'll require a lower minimum pay-per-click to run against that keyword. If it is a lower score, we would raise that to over 5 cents [PPC].”

This often will lower advertisers' keyword rates, but some rates will be higher, if the advertiser chooses words with low scores.

“What we're trying to do is advantage advertisers to choose high-quality words that perform well and lower their costs to run against those keywords,” Holden said.

The AdWords changes also will benefit advertisers bidding on keywords for short-term campaigns, such as a promotion for a movie release. In the past, some short-term ads, such as those for a new movie, would not appear heavily because Google had built up no history of that keyword.

“So, if they had a short duration for a campaign, it might be over before we had enough history, before we let the advertiser run on it,” Holden said.

The changes also aim to simplify users' accounts, Holden said.

“We used to have multiple, different states for keywords — words that were in trial, on hold or disabled — and this simplifies it,” he said. “A word is either active or inactive.”

The new system is not yet in place, as Google wanted to give advertisers time to prepare. Holden gave no date for implementation but said Google advertisers would “receive notification when it's rolled out.”

Search marketing consultants mostly praised the AdWords changes.

“Google has recognized that, once an ad meets general relevancy minimums by keyword, that position has a huge impact on click-through rate, so marketers should have the option of ramping up bids dramatically to push themselves up into the top positions,” said Kevin Lee, chairman of search marketing firm, New York.

“It gives us more flexibility to run the keywords we want to run — we can trump ads getting deactivated by raising our bids,” said Peter Hershberg, managing partner with search marketing firm Reprise Media, New York.

Advertisers “get rewarded” for having relevant ads that people click on, and can test effective keywords better, Hershberg said. “It may cost us more in the short term, but it allows us to test combinations that we hadn't been able to test.”

Christine Blank covers online marketing and advertising, including e-mail marketing and paid search, for DM News and To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting

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