Here’s a good article on Google’s update, the First Page bids is a great improvement over deactivating terms.
Aug. 21, 2008 at 9:00pm Eastern by Barry Schwartz
The Google AdWords blog announced three major changes happening to the AdWords marketplace. First, Google will now calculate the quality score of your keywords at the time of the search query. Second, Google has removed the “minimum bid” metric and replaced it with “first page bid.” Finally, Google will no longer mark search ads as “inactive for search.”
Google said they will be rolling out these changes to a “very small segment of advertisers within the next day or two.” Google will be watching how this impacts those advertisers and will then decide when to launch this on a broader scale. Let me explain what these changes means in greater detail.
(1) Google will no longer assign a keyword a “static” quality score, instead, Google wil calculate the quality score at the time the search is done. The quality score will take into account the searchers location, query phrase and other factors. If Google sees that for a specific advertiser, a searcher in one location, who searches for a longer tail version of the advertiser’s keyword is more relevant, then that ad will receive a higher quality score at the time of the search.
(2) Google is doing away with the popular “minimum bid,” replacing it with “first page bid.” Why? Well, Google is no longer marking ads as “inactive for search,” and thus there is no minimum bid for a search ad to be displayed. Google does explain that a past ad that had a high minimum bid or that was placed as “inactive for search,” would likely not perform well with the new quality score because of the nature of the ad. So by changing it from “minimum bid” to “first page bid,” Google is able to give advertiser’s “better guidance on how to achieve your advertising goals.”
(3) Inaction for search is no longer going to be used, meaning, search ads will never be inactive. All your ads have the ability and chance to show up for keywords, expect for the ads you have paused or deleted. Google adds that keywords previously marked as inactive, will likely not perform well, “because their combined per-query Quality Score and bid probably isn’t high enough to gain competitive placement.”