Adwords Blog

These days, even Google is questioning Google’s rose-colored portrait of its ever-expanding search advertising monopoly.

The way senior vp Jonathan Rosenberg tells it, Google will gradually tweak its AdWords ad platform until it displays practically no ads. Ad “coverage” on the world’s largest search engine has surely shrunk over the past many months, and when the subject was mooted during July’s quarterly earnings call, Rosenberg attributed this steady shrinkage to Google’s “continued focus on top quality” advertising. “[Google co-founder] Larry [Page] says we’d be far better off showing just 1 ad [per page] – the best ad,” Rosenberg cooed, indicating that coverage would shrink even further.

But then, in a rare moment of Google candor, the other co-founder told listening reporters and financial analysts that Rosenberg’s “ideal ad” nonsense was indeed nonsense. “There is some evidence that we’ve been a small bit much more aggressive in decreasing coverage than we ought to have been,” was the word from Sergey Brin. “We’ve been reexamining some of that.”

His candor was fleeting. But with the company’s second quarter profits dipping below Wall Street expectations, it looked an awful lot like Brin and company had been on the verge of cranking the dial on their AdWords money machine and cooking up added profits for quarters 3 and four – and beyond. Bear in mind: Far more coverage means far more clicks, and much more clicks means a lot more income.

Well, small a lot more than a month later, Google has announced substantial adjustments to its ad platform. Most notably, the company is killing AdWords’ considerably-discussed “minimum bid,” a means of discouraging what Google considers “low quality” ads. The modifications have however to reach the internet at large. Google is testing the waters with “a really modest segment of advertisers.” But search engine marketers – and Wall Street analysts – cannot help but wonder if this is Google’s play for more coverage. And more revenue.

“No more minimum bids?” says Adam Audette, founder of AudetteMedia, a boutique search advertising and marketing shop out of Bend, Oregon. “It undoubtedly looks like they’ll have much more leeway to make a lot more funds.”

Meanwhile, as Jonathan “Best Ad” Rosenberg himself let slip in the course of that shockingly-newsworthy earnings call, Google continues to expand a coverage-happy AdWords beta recognized as “Automatic Matching.” Believe it or not, Auto Match spends your excess ad spending budget on keyword searches you are not actually bidding on, and judging from initial tests, it empties your wallet just as pointlessly as expected.

Testing Auto Match with a seasoned Google advertiser, the Dallas, Texas-based search marketing outfit KeyRelevance saw spending increase 600 per cent on a single ad campaign, and most of that additional dough was spent on keyword searches that had small or absolutely nothing to do with the advertiser’s goods.

“Auto Match decided the account required assist spending income,” says Jim Gilbert, the KeyRelevance ad guru who ran the tests. “So it started spending money.”

Google insists it’s only interested in serving up relevant ads, satisfying each advertisers and internet surfers. But this commitment to good quality goes only so far. Google is also interested in making lots of money, and as the economy continues to soften, it is worth remembering Mountain View has the power to juice profits whenever it likes. With AdWords controlling 70 per cent of the search advertising market, even the slightest turn of the dial can mean millions.

AdWords serves up text ads in response to Google keywords searches. Google bills it as an auction. You bid for a certain keyword or group of keywords – “leather mask,” for instance, or “my small pony” – and if you bid high enough, your ad will appear every single time someone searches on those terms. The winning bidder gets the leading spot on the page, the second place bidder gets the second spot, and so on. And if your ad really gets a click, you pay Google a fee somewhere south of that bid.

But this isn’t an eBay-style bid-off. Just before you bid, Google gives you a “good quality score,” and if your top quality score is low, it may restrict your ability to spot ads. In some situations, Google prevents you from bidding at all. In other people, it saddles you with a high minimum bid. And even if you can afford that minimum, a low quality score might bar you from best ad spots. You see, Google does not determine auction results with bids alone. It calculates ad spots by multiplying your bid and your quality score.

At least, that’s the way it works now. With an official post to the Official Inside AdWords blog, Google says it will soon revamp the quality score.

1st off, AdWords will now calculate this mystery number in genuine time, as the searcher is looking. According to Google, this will far better match ads to particular queries. “AdWords will use the most accurate, particular, and up-to-date performance data when determining whether an ad really should be displayed,” the weblog reads.

“Your ads will be a lot more likely to show when they’re relevant and less likely to show when they’re not. This means that Google users are apt to see far better ads even though you, as an advertiser, ought to obtain leads which are much more extremely qualified.”

At the very same time, AdWords will no longer bar “low high quality” ads from certain keyword auctions, and it will do away with the minimum bid. Rather, it will give you a “first page bid,” estimating what it would take to land your ad on the first page of search outcomes.

The way Google tells it, all this will increase its capacity to geo-target ads. To wit, your genuine-time top quality score might go up or down depending on where the searcher is searching from. But in dropping the barriers that so usually prevented advertisers from even joining an auction, Google might be expanding coverage as well, slipping far more ads into its much less-coveted ad spots.

But who knows? As often, Google keeps the particulars hidden. “We can guess that Google wants to boost its revenues and that’s what’s going to occur,” says Brian Carter, an AdWords consultant with the South Carolina-based search engine marketer Fuel Interactive, “but judging from the information we have, it is really hard to say.”

At the extremely least, the changes will result in more advertisers placing bids. And Google reserves the correct to do whatever it likes with those additional bidders. Place them on a page. Or not.

In other words, Google has even greater freedom to turn that dial.

Automatic Match is a much more obvious turn of the dial. This AdWords beta – which debuted in February with a handful of advertisers and has because expanded to who knows how many far more – automatically spends budgeted ad dollars you are not spending on your own.

“Automatic Matching automatically extends your campaign’s reach by employing surplus spending budget to serve your ads on relevant search queries that are not already triggered by your keyword lists,” reads Google’s initial email to beta testers.

That’s proper, Auto Match automatically spends your unused budget on keyword searches you are not actually bidding on. According to Google, it only chooses relevant searches. But tests from KeyRelevance tell a various story.

With his seasoned advertiser, Jim Gilbert setup bidding on the keywords “wedding table decorations.” And he designated this bid as a “phrase match,” meaning he only wanted an ad placed if a person searched on all 3 of those words, in that order (with or with out additional key phrases).

But the account wasn’t spending its everyday budget, and when Auto Match kicked in, it started placing ads against all sorts of other keyword combinations.

Some of these suited his advertiser, including “wedding table decor,” “decorations for wedding tables,” “wedding cake table decorations,” and “wedding table suggestions.” But a lot of much more did not, which includes “party table numbers,” “chocolate wedding favors,” “chocolate lollipops,” “Hersheys,” “wedding flowers,” “wedding flowers,” and “wedding gowns.”

With Auto Match turned on, spending on this single ad group increased roughly 600 per cent. And in the end, much more than 70 per cent of the visitors generated by the ad group was a complete waste. “I’ll give it credit for being somewhat accurate,” Gilbert says. “But most of the matches had been pure trash.”

Gilbert can turn Auto Match off. But it is turned on by default. The question is whether or not Google will keep this default when it rolls points out to the internet at huge.

Yes, Auto Match is a beta. And yes, Google may possibly increase its ad matching abilities before the program goes web-wide. But this sort of factor is never an precise science, and there’s no denying that Google is attempting to wrest even much more control from advertisers – while ensuring extra spending.

When Sergey Brin hinted that Google would soon expand its ad coverage, he didn’t say the firm wanted much more dollars. He mentioned that the firm was concerned that internet surfers weren’t seeing enough ads: “Our ads are an crucial addition, good quality wise, to our pages. They’re a quite critical source of details.”

But the truth is a small diverse. When you kind the words “chocolate lollipop,” do you want an ad for wedding table decorations?

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