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Google AdWords to reward advertisers for over-bidding?
by Tim Dineen

Google announced Wednesday that it will change its method for determining top ad positions - those text ads that appear above the natural listings on its search results pages.

The AdWords Blog and gave an overview with more details at the FAQ. Barry Schwartz covered the topic at Search Engine Land and there are several discussions on the topic at Sphinn.

My take: It seems to me Google is going to be rewarding advertisers for over-bidding.

I'll hold judgment until after it takes affect, of course. Maybe it will be positive.

But my feeling is that there are enough people who manage their keywords in an un-sophisticated manner (bidding to position rather than cost-effectiveness) that this actually adds an incentive to over-bidding while also not changing the advertiser's actual CPC as a result. (Adding some extra cost for this would at least cause a slight penalty for increasing Max CPC to this end.)

The results may prove otherwise, but I don't feel this change is truly in the best interest of the typical Google searcher OR a conscientious advertiser.

Posted 8/9/2007 - 9:44 PM

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