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Google: updating AdWords

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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. 


Written by markusw

February 20, 2007 at 1:51 pm

2 Responses

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  1. Thanks for this update Markus! I’ve been struggling with this issue myself over that past couple of days.


    February 20, 2007 at 2:14 pm

  2. You are welcome. I appreciate you comment. Keep me posted if you come across something interesting. I agree with your most recent post, AdWords does seem very confusing and complex in its algorithm.

    Markus Weickenmeier

    February 21, 2007 at 4:21 pm

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