Google Tweaks Its AdWords Algorithm

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Don Reisinger
TechCrunch.com
Monday, September 15, 2008; 11:37 AM

A slew of companies rely on Google's AdWords system to bring users to their sites. But in an attempt to improve the quality of AdWords, Google will unveil a new judging system in the next few days that could have a major impact on current AdWords users.

The most important change the company announced Monday has to do with how it calculates the AdWords Quality Score, which helps determine the order of each ad for a given keyword. Google said that it will now calculate quality in real-time as a Google user performs a search, along with its current practice of analyzing click-through rates. Google also said that it will less frequently analyze landing page quality than previously.

Google is also eliminating its "inactive for search' moniker for those keywords that would yield few (if any) impressions. The company said that all keywords are now available on Google.com and although the company said those keywords will probably still yield less than ideal results, they may add some impressions for those sites using them.

Finally, and perhaps the most controversial, Google announced that it will replace "minimum bid" prices with "first page bid estimates," which will probably see rates go up. According to Google, on those keywords that have few advertisers bidding for placement, the new bid estimate should be close to the old minimum bid. But for those companies that want first-page placement on keywords that are more popular among advertisers, the cost could be "significantly higher."

Google didn't give any word on exactly when the new system will be rolled out, but it should happen over the next few days.

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