Google sent out an email stating that they will now only display 1 advertisement per URL per keyword. Additionally people no longer need to signify their ads are affiliate ads since there is only one ad per URL.
They multiply CTR * max bid to determine the effective ad rank, and the top ad rank for any URL will be the ad that is displayed.
Lots of dynamic keyword insertion noise (such as eBay affiliates) have been ruining the relevancy of their ads so this one step they are taking to try to keep them relevant.
This change will have no effect of white label affiliate sites since they are on their own separate URLs. Some people will probably also find ways to bounce their affiliate ads to get around this change.
The email they sent out is in the extended entry. Google AdWords™ Announcement:
Affiliate Policy Change Google
Hello from the Google AdWords Team:
In January 2005, Google will incorporate a new affiliate advertising policy that is designed to provide a better user and advertiser experience.
What is changing:
With this new affiliate policy, we'll only display one ad per search query for affiliates and parent companies sharing the same URL. This way, users will have a more diverse sampling of advertisements to choose from. As always, your ad will be displayed based on its Ad Rank for given searches, which is determined by a combination of your ad's maximum cost-per-click (price) and clickthrough rate (performance).
For instance, if a user searches for books on Google.com or anywhere on the Google search and content networks, Google will take an inventory of ads running for the keyword books. If we find that two or more ads compete under the same URL, we'll display the ad with the highest Ad Rank.
How this will affect you:
If you're an affiliate, this means that you no longer need to identify yourself as an affiliate in your ad text. However, your current ad text will continue to display your affiliate status until you change it.
Affiliates or advertisers using unique URLs in their ads will not be affected by this change. Please note that your Display URL must match the URL of your landing page, and you may not simply frame another site.
What you should do:
We recommend that you continue to monitor your ads' performance and optimize your ads as needed to ensure they're bringing you the best results. Please visit our Optimization Tips page for more information.
By improving our ad relevancy, we believe that users will have a better search experience, which will help you reach more potential clients in the future. We'll continue to make improvements to AdWords over time to further improve the user experience and help increase the performance of your ads.
We look forward to continue providing you with the most effective advertising available.
The Google AdWords Team
Disclaimer: As a business Google must make decisions regarding the advertising we accept. As stated in our Terms and Conditions, we reserve the right to exercise editorial discretion when reviewing AdWords ads created within the program. This only concerns our advertising and in no way affects the search results we deliver. Google offers broad access to content across the web without censoring results.
Contact us: If you have any questions, please contact your Google representative or email us at https://adwords.google.com/support/bin/request.py.
Email preferences: You have received this mandatory email service announcement to update you about important new AdWords features.
>Google offers broad access to content across the web without censoring results.
Does anyone buy that Google is not forced to censor some stuff? I don't...
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