Mountain View, California-based Internet giant Google has made changes to the way its popular online ad  management program AdWords works that are expected to generate more revenue for the search leader by increasing the costs advertisers pay for the top ad spots. The changes included a new real time measurement of ads in the AdWords system that Google said was more accurate, and a method that will see some previously inactive ads generate revenue for advertisers, Google announced Monday. Landing Page Quality Checked Less Often In New AdWords Scheme AdWords is Google's popular online ad management program. The large majority of Google's 2007 $16.6 billion ad sale revenue came from sales of the small text-based ads shown alongside search results and on its ad networks, managed by advertisers who bid for keywords through the AdWords system. The rapidly-growing online advertising market is expected to see spending increase toward the $50 billion mark during 2008, a 22 percent increase from last year according to research company eMarketer. Over the next few days all AdWords users will see a new so-called quality score system put in place with three major changes, Google said Monday. "These improvements are part of a continuing effort to deliver relevant ads to our users, and also to provide you with more control over your bidding and more insight into the quality of your ads and keywords," Trevor Claiborne of the Google AdWords program said in a message announcing the changes posted on the company's Inside AdWords blog. Google said that its AdWords quality score measurements would come from some of the same places the system has used, with several new factors added in. "We will still consider your account's history, which consists of the clickthrough rate (CTR) of all the ads and keywords in your account [and we] will also consider your landing page quality," Claiborne said, but added that under the new system "landing page quality is evaluated less frequently." First Page Bid Estimates Replace Old Minimum Bid System By altering the way it measures how much advertisers must bid to place ads next to top search results, some industry analysts expect that Google could see revenue increases of hundreds of millions of dollars over time, as the AdWords program replaced a system that had centered around a minimum bid with one based on first page results. "'First page bid estimates' replace 'minimum bids' in your account -- providing a more actionable and useful metric to advertisers," Claiborne said in the message announcing the changes. Google said that under the new AdWords system "queries with a high level of advertiser competition may have significantly higher first page bid estimates, because you'll likely need to bid above the old minimum bid to rank higher than your competition and show on the first page," according to Claiborne's Monday announcement. By replacing the AdWords minimum bidding system with one based on estimated bids for first page results, Google expected to increase the average click-through rates seen by advertisers in the program. Google said that the new system would see more accurate quality score ratings by performing real-time updates to ratings, done every time a user performs a Google search. "Quality Score is now more accurate [...] because it is calculated at the time of each search query," Claiborne said. Another change has replaced a category that had labeled some AdWords keywords as "inactive for search" with a new system that treats all keywords as active, which Google said could display some ads that had previously gone unused. "Keywords are no longer marked 'inactive for search' -- all keywords are active because they are evaluated for every relevant query," Claiborne said. "For some currently inactive keywords, however, we may find that they perform very well for certain queries or in certain circumstances -- in which case, these keywords may begin to receive impressions," Claiborne added in the Monday announcement. Google AdWords Program Changes Expected To Increase Costs For Top Spots Among the members of WebmasterWorld, one of the oldest and most popular Web sites serving mostly the technically-savvy people who manage Web sites and specialize in Search Engine Marketing (SEM), AdWords users had mixed reactions to the changes being implemented by Google. A WebmasterWorld member using the handle "Swanson" said the the new  AdWords system might make quality landing pages -- the Web page a user first reaches when clicking on an ad or search result -- less important. "The changes we are seeing here are intended to make Google more money by showing more ads and getting higher bids," the member wrote, adding that a quality "landing page is surely less relevant in this new system." Another WebmasterWorld member saw the new AdWords system as largely beneficial. "I think it will make things much easier for new advertisers," noted a member using the handle "edd1". "The one thing that disappoints me just a tiny bit is not being able to see the quality score grades by default," the member added. Some members of the pioneering Web forum felt that the new AdWords system could be a mistake for Google. "I bet this causes Google to lose money, not make more money," suggested a member using the handle "limitup," while another member using the handle "Green Grass" noted that the changes could be "a dilution of the quality score, as it allows more ads to be shown. This allows more options for Google to use up ad inventory." Claiborne said the changes being rolled out over the next few days to AdWords users would improve the quality scoring system. "Our goal is to improve the search experience by showing only the highest quality, most relevant ads -- and this change further enables us to meet this goal," Claiborne said. Related Links:
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9:48 pm on Sep. 16, 2008 (utc 0)