Okay, so it took a few re-reads before I got a handle on the new Adwords quality score update. Basically, what you need to understand:

The key change to the formula will be how we consider price.

Instead of factoring quality score and actual CPC, they are going to factor quality score and maximum CPC.

The Adwords team tries to convince you that this gives you more control over your placement:

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.

Whatever, that’s fine. I understand Google wants to make more money, I have no problem with that. Just don’t tell me you’re trying to increase the ‘quality’ of your ads.

This change is designed to improve the quality of our ad results…

I’m speculating here, but do you think that turning the dial all the way to ‘quality’ last year started to make ‘too much’ of an impact? Now the dial is going to be somewhere between ‘we like high bids’ and ‘we’re rich as hell’. Maybe, just maybe, the quality score was partly responsible for the drop in net profit margin from 29% last year to 23%?

Yesterday the Google Adwords team posted a mea culpa to advertisers regarding the latest quality score adjustment.

You say, “Jeff I don’t have time to read that stuff, tell me what they said”. And I say, Grasshopper, the whole thing boils down to one sentance:

“the Quality Score doesn’t incorporate any conversion information”

Hmmmm…….

I’m thinking maybe conversion is a good indicator of quality, no? Other folks have shown hard data that clearly illustrates there is a problem with their algorithm.

The tone of this post kind of reminds me of George Bush talking about Iraq. He can say whatever he wants but intelligent people all over the world know it’s seriously fubar. My message to Adwords? Your intentions may be good (maybe), but you are driving people away in droves. And not neccessarily the kind of people you want to drive away. I’ve seen far too many real campaigns from real advertisers get smoked with the new LPQS changes.

Anyhow, I won’t complain, I’ve always said we need at least 3 major, competitive, PPC platforms. Right now we have approximately 1.5. The more Adwords tries to make sweeping overhauls with poor execution, the more opportunity for someone else to step in and take that business. Anyone? Buhler? Anyone?

An early Christmas present was waiting for me today when I arrived at my computer. Our Yahoo Panama upgrade had been activated on one of our MCC accounts. I don’t know why I was so excited given all the frustrations with Yahoo over the last few years. I guess I just really hope that this upgrade gets Yahoo back in the game.

So, what’s it like? I can’t tell you just yet because I haven’t had time to thoroughly check it out. Doh! Stay tuned!

This was actually announced some time ago in a meeting with agencies, however, you might not have seen them. This is an excerpt from the Yahoo newsletter detailing the new account structures, a la Adwords. So, if you’re frustrated with the current Yahoo interface, just sit tight, a new and improved version is on the way.

“Current Account Structure vs. New Sponsored Search
When your account is upgraded (these transitions will begin in fourth quarter 2006), some of the account structure terminology that is currently in use will change, and we will add some new terminology. Here is a summary of those changes and additions to the way your ads are organized:

Current: Listings
“Listings” have been the combination of keyword, bid, title, description and URL.

New: Ads
The marketing messages that your potential customers see will be “uncoupled” from keywords, and be known as “ads,” but they are similarly comprised of a title, description and URL.

New: Ad Groups
“Ad Groups” are the combination of multiple ads (your creative) and keywords. You may set one bid for your entire ad group, or use individual keyword bids.

Current: Categories
Categories have served as the organizational structure you assigned to groups of keywords that are similar in a particular way, for purposes of bid management or reporting.

New: Campaigns
“Campaigns” replace categories, and will consist of a combination of one or more ad groups that share the same budget, schedule and geo-targeting criteria, usually created to achieve a particular marketing goal.

After your account is upgraded, you won’t need to manage your account at the listing level anymore. Instead, you can manage and optimize your account performance at the account, campaign ad group or keyword/ad level. We recommend starting out by managing at the ad group level, in which you can use multiple versions of your creative (titles and descriptions). The benefit of using ad groups is that you will be able to test different versions of your creative, and have more impressions shifted to those ads that provide you with the highest click-through rate.

Preparing for the Account Upgrade
When we upgrade your account, we will move your account categories into campaigns with the same names. So if you haven’t already done so, it’s very important that you start to group your current listings that are related to each other into categories.

By completing this organization before your upgrade occurs, your ads should be much better organized after we move your account to the new structure. Then you’ll be able to “hit the ground running” as you take advantage of our new interface and tools.

Example: If you sold “SeeClearly” televisions, under the new Sponsored Search you would probably want to have a “SeeClearly” campaign that included ad groups for the models “SeeClearly X100″, “SeeClearly X200″, “SeeClearly HDX1000″, etc. Using this example, we recommend that you set up a “SeeClearly” category now that would contain all of your SeeClearly listings.

Summary
1. Keywords still serve as your foundation.
The keywords that describe your business can remain the same. These are still the connecting point between you and customers who are searching online.

2. Individual titles and descriptions will apply to multiple keywords.
Titles, descriptions and URLs-known as “ads” in the new Sponsored Search-may apply to more than one keyword. This should cut down on the time you have to spend generating advertising messages.

3. Keywords and ads will be organized into ad groups.
Ad groups can contain multiple keywords, along with up to 20 ads (titles, descriptions and URLs) that apply to those keywords. This will allow you to test multiple ads to find the message that works best with prospective customers.

4. One or more ad groups will make up a campaign.
Campaigns may contain multiple ad groups. Some new features will enable you to set up geo-targeting, scheduling and budgeting at the campaign level. This should give you more control, and help ensure that your campaigns are working as efficiently as possible.

5. Your account will be comprised of all your campaigns.
Your campaigns will make up your new Sponsored Search account, which will still apply to one market only, i.e., the United States (which includes English-speaking Canada). To advertise in more than one market, you will need to have multiple accounts.”