Google announced today that it will be updating its ad ranking algorithm for AdWords, and making that process a bit more transparent for advertisers.
Before the end of the month, Google plans to implement an improved quality-based bidding system, updating the current AdRank algorithm that first launched in August 2005, and has been updated consistently since then. The last major updates came in December 2005, and again in July 2006. Enhancements came the in the form of landing page quality scoring additions that left many advertisers upset with Google's lack of information regarding how that quality score was reached.
The changes this time around will not add new elements to the score, as much as change the weight that each component receives in the scoring, Nicholas Fox, senior business product manager for ad quality, told ClickZ News.
"This is a change to the algorithm itself, updating what we call 'prediction confidence' to improve the accuracy in determining quality score in cases where we have less data," Fox said. In effect, Google is becoming more lenient with ads that it knows nothing about, but could become stricter with ads once it has gathered some data, he said.
The net effect could be the re-activation of many keywords that were previously deactivated when their minimum bids had risen above the advertiser's desired cost-per-click (CPC) bid. As those minimum bids are recalculated under the new algorithm and fall below the advertiser's bid threshold, those ads will be reactivated, unless the advertiser deactivates them or lowers their bids below the new threshold. In other cases, certain ads will be treated more harshly under the new algorithm, and their minimum bids will increase.
To help advertisers prepare for the changes, Google is adding a new quality score column to the advertiser's AdWords account interface. Beginning Thursday, advertisers will be allowed to activate the new column on their accounts, and begin making plans for the new algorithm.
The tool will show advertisers an estimate of their ad's quality -- in general terms like "great," "ok" or "poor" -- as well as the estimated minimum bids associated with them. The scores and bid estimates will be updated at least daily, with more frequent updates in certain categories.
"Advertisers have asked us to provide more transparency into the process, and now we're able to provide that visibility," Fox said. "This is the first step of many in that direction that you'll see in the next few months."
Though Google was the first major search engine to incorporate a quality score in its ad ranking algorithm, it has since been followed by Microsoft's adCenter and Yahoo's Panama platforms, both of which include a quality metric with varying degrees of transparency.
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Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.
Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.
With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.
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