November 8th 2005 Posted at Google
Comments Off on Adwords Algorithm Changes – Screwing the Advertiser.
I recently started working with TRN Mag helping to drive traffic to the site and the sales of their Making the Future Reports low cost reports that allow you understand what is going on in a number of different fields. For example one of the reports my father-in-law and I enjoyed was Alternative Computer Chips: Post Silicon Circuits.
This report covered the latest developments in chip materials and who the researchers were working in the field. Robert was interested for a lunar lander project at Boeing. Given the length of the lunar night (14 days), the resulting extreme cold makes it tough on traditional computer chips which must be kept warm. So they are looking at silicon germanium chips which have a greater operating temperature range and would work better given the extreme cold of the lunar night.
So to help kick start sales of the 16 reports that TRN Mag offers I decided to go to Google Adsense which I have always found to be reliable in generating leads. It had been a few months since I had set up a new Adsense campaign and was unaware of recent changes in pricing algorithm. I set up my campaign and set my bid at $.25, which I felt would be the maximum I would want to pay for these terms since they are fairly technical, fairly obscure and have fairly low search volumes. It turns out having a low search volume on terms is a SERIOUS problem with Google’s new bidding algorithm.
When I logged into Adwords again on Monday (I set the campaign up the previous Wednesday). I found that the campaign had been disabled and the minimum bid for most of my terms had been raised to from $.50 to $5. I was stunned to say the least. After spending a lot of time reading various FAQs, I decided a give Google Adwords a call. Their number for inquisitive is 1.866.246.6453.
The first rep I spoke with said I need to improve the quality of my ads. My ads were pretty focused so he suggested that I do one ad per keyword. I balked at this as this would require 160 ads for me (16 reports at 10 keywords each). I wanted to just do one ad per report. So as a test I agreed to do one report with 10 keywords as a test. Well I set up that ad test that night.
The next day I logged to check the campaign. Again Google had jammed up the mininum bids again. In the initial testing phases of a campaign I try to minimize expenses in order to get some form of insight on how to improve the ad. I am not simply going to spend $5 per click to get that baseline data. I called Adword support again. It turns out that without a sufficient body of searches on a term, Google’s quality algorithm simply doesn’t work. The Adword rep agreed that the ad was solid and that the problem was with the quality algorithm. The quality algorithm is designed to prevent people from buying massive number of keywords and driving them to their site (usually a generic search site and arbitraging the traffic). Google new algorithm judges the quality of the ad, the projected clickthrough rate based on previous searches etc (they are not telling how the algo actually works for some strange reason. You actually have to guess how to change your ad. At on point I grew so frustrated with the rep I asked,”How would you change my ad? I cannot keep guessing” The reply I received was your ad is fine, our system doesn’t really work well for your terms.)
Here’s one of the problems with the algorithm currently. If the search term is seldom used or rare, it lacks sufficient history to project the expected click through and consequently the price is raised. This creates an obvious problem . New products or new ideas that you might advertise through Adwords are too expensive. Without the history, the bid might be any where from $.50 to $5. The rep also told me my cost per click would probably decline once they had a sufficient click through history on my terms. So I would start high and then it might come down to an acceptable level (ie $.35 per click). This is a bass-ackwards way to work. Without a conversion history, I am just going to be throwing away money for awhile.
I also realized that this new algorithm accounted for Google beating the pants off the street’s expectations last quarter. They didn’t do this through adding new customers but rather through raising the costs to their EXISTING customers.
At the same time click fraud remains a serious problem at Google. My fraudulent click through rate varies between 15% – 30%. When I mentioned this to the rep, she told me that we could dispute this on a per click basis. That’s right – She wanted me to provide logs on every single individual “click” that I wanted to dispute. I was somewhat shocked. That would be tremendous amount of work, especially considering an Adwords campaigns of more than a few hundred clicks per day.
As an advertiser I expect certain things
1. Transparency in my provider. On both my calls to Google, they would only hint at what I needed to lower my bids or improve my click-through rates. They would only hint on how their bidding algorithm worked. That simply doesn’t work. At Overture if you want a fixed cost per click you can do it. With Google, you cannot. Google is able to do this because of their large reach of Internet users. Here’s a hint guys – using your monopoly position to screw customers isn’t a prudent long term strategy. Having transparency in the way your quality algo works improves the process for everyone. Advertiser will provide better ads, you will get a better click through rate. I know you want to preven people from gaming the system – here’s a hint they will anyway and all you have done is made the life of yor advertisers difficult.
2. Asking me to dispute every single click with log files is even sillier. For more than a few click this process is impossible. If you have several thousand clicks per day, it’s even sillier guys. I know fraudulent clicks – they hit the ad and almost never even hit the page. Asking me to audit you guys on a per click is an impossible task which is why I think that I was asked to do that. By shoving on the work on the customer, Google can avoid actually doing anything about click fraud while appearing to beneficient, “All you need to do is provide documentation on the 200 fraudulent click per day and we will refund you.” No small business owner has time to fight Google on this as they are too busy running their business. Google knows this and takes advantage of this fact.
3. Any brand new idea or service cannot advertise using Adwords as it will quickly become far too expensive. Google needs to find a way to fix technical searches.
Google needs to seriously listen to it’s advertisers or else it might find itself in trouble.
google click fraud
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