Google has recently announced it plans to make Alterations to its placement criteria.
If you are running a Google adwords campaign then you are probably aware that your Quality Score and how it is the greatest determining factor when it comes to your ranking on googles results pages.
Its now interesting to learn that Google has been recently working on making alterations ” We have been working on an improvement to the top ad placement formula that will soon offer advertisers more control over achieving top placement while increasing the quality of our ad results for users.”
The key change to the formula will be how they consider the price or bid. Todayâ€™s formula considers an adâ€™s Quality Score and actual cost-per-click (CPC). The improved formula will still heavily weight Quality Score, but instead of actual CPC, it will consider an adâ€™s maximum CPC.
Actual CPC is determined, in part, by the bidding behavior of the advertisers below you. This means that your adâ€™s chance of being promoted to a top spot could be constrained by a factor you cannot influence. By considering your adâ€™s maximum CPC, a value you set, you will have more control over achieving top ad placement.
In addition to increasing control for advertisers, the improved formula increases the quality of our top ads for users. This is due to more high quality ads becoming eligible for top placement, thereby allowing our system to choose from a larger pool of high quality ads to show our users.
The improved formula will go into effect within the next few weeks.
“The improved formula will still heavily weight Quality Score, but instead of actual CPC, it will consider an adâ€™s maximum CPC.”
Original Google Article: http://adwords.blogspot.com/2007/08/upcoming-change-to-top-ad-placement.html
So. my understanding is that the highest bidders will gain the advantage at the expense of the relevancy of the add.