Wednesday, October 22, 2008

Google Adwords Lets More Ads Display - No More Minimum Bids

Adwords does away with minimum bids.

In a run for more revenue Google does away with minimum bid levels. Advertisers previously had to bid a minimum amount per-click in order to even show up in search results. The minimum bid system did well in letting advertisers know the market going rate for advertising leads in their industry; however a major drawback was that it prevented advertisers from taking
advantage of smaller opportunities, such as a local campaign.

Minimum bid levels are driven by aggregate keyword auction, but when that auction takes places in a specific region, the competition can be very different. A minimum bid meant that the cost would be artificially increased to the average market values.

Keyword Expansion
Our local search marketing strategy has always included a broad expansion of keyword terms and permutations, sometimes taking advantage of up to 2,000 keywords per ad-group. This new change means that ads which were deemed below the minimum threshold will now surface. Our long-tail, expansive keyword work is now paying off by potentially providing more leads at the same or lower costs… incidentally it is also paying Google.

Economic Timing
It is perhaps more than a coincidence that the timing of this comes at a time when the economy and future earning revenues may be compromised. The elimination of minimum bid will more than likely bring in additional revenue.

Google KB – what happened to minimum bids
Google KB – what does the removal of inactive for search mean

User Outlook
One user benefit to minimum bids was to prevent spam-like ads from showing. We may see resurgence in arbitrage as advertisers take advantage of the bake sale on long-tail keywords.

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