Rajwansh.com

A few weeks back google changed the look of their top ads from a blue background to yellow. Google today announced via its adwords blog that it is changing the formula for top ad placement on google.com. According to google the main reason for this change is to give advertisers complete control over their ad placement on google search.

Uptill now the top position was based on a factor of ad’s quality score(CTR X relevancy of the ad and the keyword/s) and the actual CPC that an advertiser pays for a click. According to folks at google, this does not give an advertiser full control over the placement of his ad since actual CPC is influenced by bids of advertisers below you. Thus, in order to provide an advertiser more control over its ad positioning, google will now take into account the max cpc for the keyword instead of actual cpc in the placement formula.

Google further adds that this step would also result in increased quality of top ads since more quality ads will be competing for the top position as a result of this algorithmic change.

What does this change means for advertisers?

- Advertisers who normally bid high would benefit from this change since their ads would now be more eligible to show in the top position. Such advertisers would see their average positions going up as and when this new placement formula gets implemented. This would directly mean more clicks for such advertisers.

- Small advertisers who rely more on their ad quality for achieving higher ad positions would bear the burnt. Small advertisers who compete with large advertisers on certain keywords might see their ad postions going down as a result of which thier clicks might also go down.

What does this change means for Google?

Huh! Thats not too hard to guess. It would only increase their revenues. Wall street and investors would really welcome this move. Be prepared to see google stock going up and improved earnings from google in the next quarter.