The Adwords team announced today that over the next few weeks they’ll be rolling out changes to the formula in their Adwords tool that dictates who gets the top spot in the sponsored listings on the search engine results page (SERP).
Today, the top spot is determined by a combination of quality score and actual cost-per-click (CPC). The new formula will be a combination of Quality Score and an ad’s maximum CPC. Here’s Google’s explanation as to why that’s a good thing:
Actual CPC is determined, in part, by the bidding behavior of the advertisers below you. This means that your ad’s chance of being promoted to a top spot could be constrained by a factor you cannot influence. By considering your ad’s maximum CPC, a value you set, you will have more control over achieving top ad placement.
I don’t like this for small businesses who do a better job of optimizing their campaigns to perform better than those of their larger business competitors. I notice alot of larger business campaigns put alot of money in, but just let the campaigns run without tweaking and making them better. I think this new formula will allow the larger businesses to dump more dollars in and overtake the top spot without spending the time to make the experience better for the user.
Maybe it’s just the wording of their release, but my first reaction to this news is that Google is saying you’ll need to dish out more to hit the top spots.