Google Caffeine and Google Merchant Center is Stirring Up the Pot for Advertisers.

When it comes to Google Search, it becomes increasingly obvious that it’s evolving faster than ever. Advertisers who make a living from either natural search or paid search (or both) are now being forced into evolving with it. If you haven’t done anything NEW with you search marketing in the last year or so, you’re probably in for a rude awakening. Google Caffeine 2010 and the new Adwords updates are basically what’s taking off and leaving lazy, conventional advertisers in the dust.

Caffeine is the name of Google’s new method of ranking websites that has been in beta since last summer and has been tested on at least one of their known datacenters on IP: 209.85.225.103 since then. With it, come some new changes in how Google prioritizes websites. This week, Google is said to be officially rolling out the new changes on a permanent level. At this time, we will be conducting thousands of keyword tests to update ourselves on what strategies we will take to leverage these changes.

Some research thus far has shown us where they might be focusing Caffeine ranking changes. Caffeine is said to give emphasis to longer tail keywords and those more specific on websites. Also, it will add more weight to news and social media results like Twitter and Facebook. Domain age will play a slightly higher roll in ranking and domain name pertaining matching keywords will take a different roll as well.

Hopefully advertisers will take these changes seriously and play ball instead of waiting behind the curve. Overall, it’s nothing to be scared of, just an opportunity to outshine competitors who will wait or are just ill-informed.

Google Adwords has not gone unbridled either. Adwords is Google’s money maker and they pay close attention on where search is going so they can stay on top of it. It is no surprise that much of their search development for sponsored ads is surround that of the mobile search, image search using mobile application such as Google Goggles, and Merchant Center which allows advertisers to use their product feeds to display product images in the sponsored links. Until recently, only some advertisers were invited to participate in this program, but we are seeing more and more links to product images every day.

Recently, we posted and blog piece talking about how Google Adwords had forced hyper competition on the first page of Google by showing inside Adwords accounts that advertisers who aren’t bidding enough aren’t serving ads. They have also made it increasingly hard for some to gain higher quality scores, despite their published criteria being above par.

Quality Score has traditionally been based on criteria advertisers could control easily. Now, it takes longer and to get around some of the unpublished criteria Google uses. Through our own betas and confirmed through reliable sources, Google is now relying on industry averages in conjunction with more traditional determinates. There will be more to come later on Quality Score.

For now, we have found ways to tackle these obstacles but it still doesn’t change Google from widening the barrier to entry for new advertisers. It will hurt more especially if you are being shut out of an industry you’ve been successful in for 5 years already.

Whether you are actually being kicked off that boat or if the boat is simply just leaving you behind, it’s time to jump on it. These types of updates present not just awareness, but an opportunity to join top advertisers before everyone else does; before everyone is on top again. Underdogs are welcome to play too.

Though advertisers will typically maneuver around the new interface until they can navigate comfortably, most are not enthusiastically diving into routine account management. The result is less time being spend optimizing these campaigns in a time when it is most critical to do so. With less attention being spent in the advertiser accounts, that bigger problems are likely to go unnoticed.

It has gone without much discussion that Google has made changes that remove the “More Sponsored Listings” link at the bottom of the first page of Google search results. Actually, without the link itself, there is not much difference in the way ads are served (or not served.) How many people really go looking for Sponsored Results on Page 2 anyway? The link missing really serves as an calling that there is a much greater movement taking place in the background. It goes back to an earlier change made last year when we saw “minimum first page bids” for the first time.

What happened is Google had implemented visible “minimum first page bids” next to keyword data inside Adwords accounts. They were introduced as an alert for advertisers to increase their bid should they want to remain visible to Google users. Active Adwords advertisers were quick to put these bids in line with first page visibility but some others just let it go by neglect.

The real alert came when ads stopped appearing for Google searches. “Many of your ads may not be showing because they don’t meet the minimum first page bid requirement.” Now that sounds more important, right? If you care anything about your Adwords positioning, you will most likely make the bid jump. These notifications did not cause a huge panic. They were subtle. And most advertisers that noticed them made the bid adjustments paying no concern to what their competitors were doing.

So what has really happened? Google has neatly and quietly ushered all Adwords advertisers to compete for a placement on Page 1. That is of course, that you have noticed and are willing to bid for that necessity.

What happens when you put everyone on Page 1? It’s the same thing that occurs when you put a residential property on the market way below market value; hyper competition drives the bidding prices far above market value. The sellers make out like crazy and the buyers pay more than the property is worth. Advertisers have to pay more for each lead or sale they receive and Google’s stock goes up again.

So what can be done to combat this new competitive arena we are advertising in? After all, Google is unlikely to change it back in the future. It should be noted that these changes put a new burden on us to find out more about how profitable are products and services are.

Things that were profitable before may be less now and we don’t have the luxury of neglecting such data. Unprofitable keywords and adgroups don’t need to be deleted, but they do need to be scrutinized then optimized so that they do maximize the ROI. Making sure your dollars are spent in the most effective way will keep wasted dollars from leaking out the back.

The key is active management in some form. Whether advertisers do it themselves or if we do it, some PPC management is better than none. Keyword Search Pros has the sustained track record of keeping advertiser conversion costs down and in most cases, showing advertisers better performance than they have ever seen before in Adwords.