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Wednesday, May 14, 2008

Google AdWords Auction Has Hidden Minimum Bids

I wonder what prompted this statement on the Google Public Policy Blog:
Some people think that Google manually controls prices for the ads that appear on our site. But Google -- like all the major search engines -- actually uses auctions to price ads, meaning that prices are determined by advertisers.
They point to a post on the main Google blog, How auctions set ad prices, which reveals a fact about AdWords that I suspect most PPC advertisers are not aware of:
Google actually runs two auctions: one for ads at the top of the page, and one for ads on the side of the page. Only ads with particularly high quality are eligible to compete in the top-ad auction.
One big difference between these 2 auctions is that advertisers know the minimum bid necessary to be eligible for ads on the side. The other minimum bid is hidden. If you read "Did Google Kill the SEO Star?" on this blog last year, you would have been aware of this change and the 2 price hurdles advertisers must now jump:
  1. Minimum bid to be active for search
  2. Minimum bid to be eligible for top placement
I can understand why Google would not want to make it easy for advertisers to know the bid necessary to achieve top placement. However, I don't understand the explanation they give for determining that bid (emphasis mine):
First, your ad must pass our high quality threshold for eligibility to appear in top spots. If your ad is shown in a top spot, its price will be determined by the auction, but subject to a minimum price for top positions. This minimum price varies based on the quality of each ad per search query. For this reason, our system doesn't display the minimum price.
The min bid varies by quality for the other auction, so why is the top placement min bid hidden? BTW, you can see the min bid for the side ads auction via the Quality Score column in the AdWords interface:

adwords min bids

So, why do you think Google hides the minimum bid for top placement? Hiding it certainly doesn't instill confidence that Google is not, in fact, manually controlling prices.

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Anonymous Anonymous said...

looks like they just want to make people sweat about the quality of their ads..

Wed Jul 23, 12:24:00 PM EDT  
Blogger Affordable web design, graphic design and seo company from Amsterdam, The Netherlands said...

I was wondering if you place a minimum bid on all your keywords if you can get results, or will it affect your quality score and cost you money instead of getting (almost) free ad positions?

Wed Mar 10, 05:55:00 PM EST  

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