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.
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.
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
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.