By: Dezmon Landers

Google’s new algorithm change to Adwords is simply a way to make more money. That’s it. Don’t think it will really improve the quality. There is no way that adding a part to the algorithm that favors those that spent the most money is going to improve quality.

Who will this hurt most? Small businesses that can compete against big businesses because of quality.

Here is a great breakdown from SEOMOZ:

“This is a very smart move in terms of Google’s potential revenue and the impact this change will have on business bidding behavior:

1. Supply is limited to 1-3 positions above the organic results.
2. Business owners who see their competitors take the top positions will want to out-bid that person by raising their maximum bid, thereby gaining control of the top position.
3. The ripple effect of one competitor raising their bid is tremendous, especially with the bid management software and bid management companies available today - somebody is keeping an eye on things. When one competitor is bumped into a different position, the bid is automatically or manually changed to compensate for the lost/preferred position.
4. When the top bidder raises their maximum cpc, and several others follow suit, the costs incrementally rise because everybody wants to have the higher max cpc even though they rarely pay their maximum rate! Raising your max cpc will inherently increase your costs.
5. These costs are ultimately going into Google’s pocket, and I have to tip my hat their way because this was a genius, strategic move on their part while trying hard to make it a win/win situation.”

We work with more small businesses than big businesses so I’m looking forward to the challenge but I hope the spending does not get out of control.