Google Using Organic Search to Determine Cost Per Click Values in AdWords

Jeremy Chatfield of Merjis has said it best in this post detailing why some keywords in AdWords accounts will never generate impressions. Additionally he predicted on 9-16-08 some of the impacts of the 9-15-08 AdWords quality score updates would actually mean for advertisers. His predictions have come true. Read this interesting article on how he feels that Google develops the cost per click for brand new accounts before the ads even start to run in this post from his blog from trends in organic search.

I have gone back to read this post several times over the last month and feel that Jeremy has nailed what happens in AdWords and that Google uses trends and histories accumulated from activity in organic search to determine the value of a click in their network. If you have ever wondered why great keywords in your accounts will not show impressions no matter what you do, you will find the answers in his post.

Jeremy Chatfield is a leader in the Google AdWords professional account manager community. We became friends in one of the Google AdWords support forums (even before social networking). I think that you will agree that several of his key points deserve particular merit and consideration.

1. …in addition the PageRank derived algorithms, some kind of AI that collects information about clusters of words and their proximity.

2. [In regards to cost per click]…The weaker the synonym, the higher the very first (Initial) MinCPC you are offered.

3.  …When I see “$0.22″ in a new account, I immediately assume that it is the Initial MinCPC, just after the AdGroup has been made, and that the keyword is a close synonym of advert copy. If I see a $0.50, I assume a weaker synonym.

4.  …[On the Google Slap] When this happens with rarer searches, and a business depends on that stream, it can look as though Google has made a decision to pull the plug on the business. Impressions on a carefully chosen set of keywords can die to nothing, overnight. Phone calls to Google will result in denials of any changes to the system. But still the business is in the pits.

Transparency has not been one of Google’s strong suits and with the Google announcement that they make between 10 to 50 quality score updates a month (see this past Wednesday’s post) it has to be assumed that this is really all about profit generation and not improving the consumer experience in reality.

Google’s motto used to be “Do No Harm”. I now recommend that the motto be changed to “Get What You Can, Fool!”

Unfortunately we in the professional and advertising community have helped Google to control us in this manner, we jumped when Google Analytics was offered! How do you think that Google has leared the value of a click and the value of click through rate on websites, but by taking the proprietary information, that we used to guard closely, that they now harvest from Google Analytics, as well as trends in Google.com search activity and history from iGoogle and personalized search results to create golden handcuffs for us and to bleed us for cash in AdWords.

What is particularly unfortunate in this whole scenario is that there is not really a strong viable platform alternative to Google AdWords. If there was, then Google would not be able to exert the control that it does on advertisers and their pocket books. If there was ever a case to prevent Google AdWords ads from showing on the Yahoo Search network, this is it!

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