Random Rants & News

Google announced today that it will be updating its ad ranking algorithm.  The last update to AdWords (which was launched in August 2005) was done in December 2005 and July and November 2006.  Before the end of the month, Google plans to implement an improved quality-based bidding system. 

Google has drawn criticism from companies for not giving much insight into how keyword quality scores are calculated. 

According to Nicholas Fox, senior business product manager for ad quality, has told SEW that Google will not ad new parameters to the calculation algorithm, but will moreover adjust the weight of the current parameters. “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.”

The quality score will continue to take into account the historical performance of a given keyword, relevance of keyword to ad text, landing page quality, and other factors.

The update addresses an issue which I have just addressed here earlier:  The biggest change, according to Nicholas Fox, will show up for newer, or low-traffic ads, for which there is not a lot of data to come to a conclusion on the ad’s quality.

The tool (AdWords) will show advertisers an estimate of their ad’s quality.  The scores and bid estimates will be updated at least daily and allow companies to purchase quality keywords more easily.  At the same time, keywords which have not been used recently may be re-activated, while keywords which have had consistently cost very little may be more expensive as their quality scores begin to rise. 

I have recently subscribed to the SearchEngineWatch’s daily newsetter.  SearchEngineWatch was founded by Danny Sullivan in 1996.  It has been sold twice since then, first to MecklerMedia in 1997 (MecklerMedia is now Jupitermedia) and then it was  sold to Incisive Media in 2005.

Today, SearchEngineWatch is run by Gary Price. The newsletter is compiled by the firm’s many staff writers and blog contributers.

In the February/March 2007 issue of BusinessWeek’s Small Biz magazine, Robert Hof writes about the changing face of keyword-driven search advertisements. 

Small text advertisements have been published on the web for several years and all of us have seen them on google.com, yahoo.com, live.com, as well as many others.  The algorithms (pioneered by Google) match keywords (purchased by companies) to search terms used by the user.

In the past, this form of advertisement has been heavily used by smaller to mid-size firms because it allowed them to reach their audiences at a relatively small cost.  The article is primarily concerned with the small baby products store “babyage.com,” which has in the past spent almost its entire marketing budget on search-driven advertisements.  Babyage.com was able to target its audience directly by purchasing keywords such as “stroller” or “toddler toys.”

More recently, within the last quarter of 2006, the price per click on search-driven ads has increased significantly.  This has happened for several reasons: Many larger firms are beginning to make heavy use of this advertising medium, shifting their budgets away from traditional advertising methods, driving prices for keywords up and often forcing smaller firms out of the market.  Babyage.com CEO, Jack Keifer, has said that the rising prices (up by 31% on average in the last quarter) of keywords have forced babyage.com to invest in less often used and more specific keywords (for example the specific name of a stroller,) which ultimately drive less customers to babyage.com.  On top of that, recent developments have shown that the ratio of clicks-to-sales has decreased significantly, the number of clicks has increased (which further drives prices for keywords up) while at the same time sales (generated by the ads) have decreased.

The CEO of US Airways, Doug Parker, was sentenced to one day in prison for driving under the influence of alcohol in Phoenix. He accepted full responsibility for his DUI charge by pleading guilty. Mr. Parker was caught speeding (he went 65 mph in a 45 mph zone) in Scottsdale, AZ. The local court ordered Mr. Parker to spend 24 hours in jail on March 15th, and additionally fined him $1,646.25. He was also ordered to receive alcohol screening at the Center for Recovering Families.

A US Airways spokesman has confirmed the report and also added that Doug Parker pleaded guilty against the advice of his attorney.

Fun fact: Doug Parker was arrested the night that Delta Air Lines rejected a takeover bid from US Airways!!