Google's AdWords Algorithm Change Killing Advertisers

Source Title:
Sudden Drop Down In Ranks
Story Text:

Apparently Google has instituted an AdWords algorithm change that is seriously hurting advertisers. Google is now targeting ads regionally, with little overall thought or concern given to advertisers' preferences.

A simple description of the way the new algorithm works is that you bid for a position of 5. As it turns out, depending on the region your ad is shown in, you could end up in position number 1 or position number 20. For all practical purposes, an AdWords advertiser has absolutely no idea or control of what position their ad is in. People who are normally in number 1 position for certain keywords, for example, are finding themselves on page 4 and the reverse is also true. The net result of this algorithmic change is that Google is getting richer and advertisers are getting taken to the cleaners with increasingly poor advertising results for their money. In some cases people are losing their jobs, because they can't account for the increased spending and the diminishing ROI.


When did this happen?

I have 2 big AdWords accounts that had their ROI drop through the floor (was at very high ROI levels).


I have noticed changes this impressions/click/click rate/conversion.....but couldn't really figure out why....guess now I know.

See feedback from "AdWordsAdvisor" on WMW....

As part of our ongoing effort to improve the user experience, we've made recent enhancements that might have affected the ranking of your ads.

These system changes are designed to show your ads to users who are more likely to click on them, thus driving more qualified traffic to your site. For this reason, your ads might be shown in different positions to different users depending on search behavior, such as the user's location and search query. Even though your ad's rank might be lower in some cases, your overall campaign results - such as average position, clickthrough rate (CTR), impressions, and spend - should be improved. Therefore, we encourage you to focus on your campaign statistics to better understand your ad's performance.

Google AdWords Baloney

Around the middle of June, I believe. Go to the article source Sudden Drop Down In Ranks. People need to get the word out, because (I can only imagine how many) people are losing money and work.

Adwords is pretty much a

Adwords is pretty much a zero sum game is it not? If one advertiser drops another must take his place.

So what is the disadvantage of better targeting?

Re: Better Targeting

1. Worthless impulse clicks because you're at number one position and bidding the highest price. Many people don't want to be at number one, but now they strategically have no choice.
2. Your keywords appearing three or four pages down when you're trying to stay on page one.
3. Why have a bidding process when no real control exists as to where you'll be. Why bid $7.00 for a number one position that winds up on the third page when someone else bids $.35 and gets on the first page.
4. Accounts historically at number one get bumped to the third page, so the advertisers, not knowing any better, raise bid prices to "get back" to number one -- artifically inflating bid prices. (It's happening.) With inflated bid prices, ROIs go through the floor, etc. -- Google does very well

Read the source matter for this thread.


> Why have a bidding process when no real control exists as to where you'll be.

> bid for a position of 5

Google have NEVER offered the option to set your own position - there IS NO real control of that and Google have NEVER advertised that you ca do that. Sorry, but you are ranting about the lost of something that was there there.

> In some cases people are losing their jobs

Yeah, yeah, yeah we hear that ever time Google (or any other engine) "dare" to make any changes to their programs or algos. It is NOT Googles responsibility to keep you in your job - it is YOURS! If you don't know how to adapt to the ever changin nature of search marketing then you better leave it to the ones that do. I promise you, once you get used to these new changes they will change again. Get used to it!

I hate Google just as much as the rest of you :) But, please, find some real problems to complain about instead of this

Correct me if I'm wrong, but

Correct me if I'm wrong, but I only pay as much for a click as a penny above the guy below me don't I? Or some variation on that model.

So even if I bid 7$, if Google places me on page 4 I will just pay a few cents if I am clicked. This has been hapening since the start with regional Googles. Even though you are #1 on you may be in 15th place on for the same keywords. And you might pay more for 15th place on than #1 on

I am used to it already as I have been using geotargeting since the beginning. Believe me it helps you keep your costs down, not vice versa.

How do they determine what is 'regional'?

And, assuming they could determine what is regional to your topic, I don't understand how that necessarily would be a good way to determine that people would click on your ad.

If you host your web site in another state, then using IP's to determine 'regional' would give false results. Or, if they use an address on the site to determine 'regional', does that make it make sense to determine 'regional' clicks based on the fact that products are able to be shipped the next day?

I don't get this logic at all.

Re: How Do They Determine What Is Regional

You're not the only one. Go to the source for this thread, which leads you to another forum (WMW). The thread is serious enough, because it's 8 pages long...

I think that part of the problem here is that Google makes it so hard to reasonably calculate what your advertising's doing that you either have to blindly believe in everything they tell you or forget about advertising. It doesn't help that their estimators are on the blink.

I WANT to advertise with Google -- I spent a month researching their program on behalf of a big client -- and that time will apparently be wasted, because I can't work with an advertising program that gives me absolutely no clue as to where I'm at, and I'm no neophyte to the world of online marketing and advertising.

I only ever target the UK

I only ever target the UK but here’s an example of the more specific region targeting.

London based car dealer, you target “used cars” bid £1 and target the city of London. Since AdWords uses the visitors IP to determine their location you may be missing out on some London based visitors that appear further a field. So you can then create another campaign to target the whole of the South East and bid £0.75. As you might still be missing out on some London based visitors going through proxies etc, you can target the whole of the UK and bid £0.25 and use more specific ad text.
As far as i know there’s no way of viewing your ad for a particular region unless you happen to have a correct IP

Like slyOdlDog said "it helps you keep your costs down"

mayby it's not your ad that's regional?

I read the WMW thread yesterday and I know what everyone's upset about but perhaps it's other peoples regional campaigns which are determining your position and not your campaign?

You bid $1, that'll put you in an average 3rd place across all states. In one state there are 7 people bidding higher than you, in another none. It doesn't matter that you want to be nationwide, if they're promoting heavily to people who only want to be listed locally then nationwide campaigns are going to be effected.

>>if they're promoting

>>if they're promoting heavily to people who only want to be listed locally then nationwide campaigns are going to be effected.

Google isn't stupid. If the local guy is bidding peanuts he will only go above the generic bidder if his clickthrough rate is so much better it still earns Google more money.

This is only going to have an effect when regional ads really are getting much higher CTR.

Google & President Bush

I think a lot of similarities exist between the two. All you have to do is blindly "trust them" to take you through. Even though all facts may lead to the contrary, in their ultimate knowledge they always know what's best for you. Yeah, right!

Google Adwords Regional variances vs latest changes

There has always been the potential that there were different numbers of regional advertisers and ad position varied across the country.

The difference in that and this latest change is the change has suddenly and seriously impacted traffic and sales for many advertisers.

I have warned advertisers that searching on their keywords could disable broad and phrase matched versions. With this latest change I suspect those affected most detrimentally will be those who offer a localized service or product and searched on their keywords from within that area.

Every search without a click lowered their CTR for that keyword or keyword phrase so now their ads may cost them most and show best everywhere EXCEPT where they are.

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