Google is about to change their CPC AdWords model in the upcoming weeks.
It’s been proved that one of the facts for better performance is to aim for top placement, appearing above Google search results.
Google uses an equation where the CPC is extremely relevant to sort out which advertisers will have their ads on top.
For the Search Engine point of view this method is beneficial because the users receive high quality ad results while advertisers get the traffic they desire – a win-win situation.
This method is called Quality Score and for Google is the greatest determining factor in top ad placement, which means no one will ever be able to pay their way to the top.
However Google is now changing the formula for top placement, (apparently) giving advertisers more control over top placement.
The official AdWords blog has announced the changes as follow:
“The key change to the formula will be how we consider price. Today’s formula considers an ad’s Quality Score and actual cost-per-click (CPC). The improved formula will still heavily weight Quality Score, but instead of actual CPC, it will consider an ad’s maximum CPC. Here’s why:
Actual CPC is determined, in part, by the bidding behavior of the advertisers below you. This means that your ad’s chance of being promoted to a top spot could be constrained by a factor you cannot influence. By considering your ad’s maximum CPC, a value you set, you will have more control over achieving top ad placement.
In addition to increasing control for advertisers, the improved formula increases the quality of our top ads for users. This is due to more high quality ads becoming eligible for top placement, thereby allowing our system to choose from a larger pool of high quality ads to show our users.
The improved formula will go into effect within the next few weeks.”
At the very first moment I see it more Advantages than Disadvantages, giving more control for advertisers to achieve top placement can be crucial in some competitive markets. At the same time this can lead to a crazy run for higher bids.
If you want to understand better about the changes there are two posts with more details about the changes:
Search engine Land – want that top Ad Position on Google?
SEOmoz - The economic motive behind google’s new advertisement algorithm
Cheers
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