Change to the Google Ad Placement Formula

Just over a week ago I wrote about the rules for when Google ads are shown in the yellow box above the organic results on the left hand side. To recap, you don’t always see ads there and it depends on whether the score of the top ranked ad is high enough to qualify for a position there. The score is dependant on quality score multiplied by the actual cost of the click.

A week is a long time in the adwords world and the formula for top ad placement is about to be changed again.

What will change is instead of the actual cost per click being used to determine the score, the maximum bid will be used instead. This is supposedly to get more ads over the threshold and eligible for the yellow box slot.

So, say an advertiser bids a maximum of 50 cents for a particular keyword. Due to the way the costing system works they may only pay 30 cents for a click depending on what the advertiser in the position below pays. This will all remain the same but currently the 30 cents may not be enough to qualify for the yellow box. When the formula changes it will be the 50 cents that is taken into consideration.

So, will there be an increase in bids in a move for the top box position? I doubt it for the majority of cases. I’ve been the only bidder a few times though and in cases like that maybe it will make sense to set a higher maximum bid to be promoted to the top left. Any thoughts?