Google announced pending changes to their adwords platform and keyword bidding policies today. We are tentatively optimistic about these changes. On one hand we should see a better opportunity to keep keywords running, on the other we are concerned about forced increases in costs per click across the board. Here is the meat of their announcement and some answers to some clarifying questions:

Google's Announcement:

What's changing

• Simplified account management: Your keywords will be active or inactive — instead of normal, in trial, on hold, and disabled. In addition, accounts will no longer be slowed. Currently, accounts are slowed when they don't meet our performance requirements and your ads appear rarely for your keywords.

• Quality-based minimum bids: Soon, each keyword will be assigned a minimum bid based on its Quality Score. Keywords with a higher Quality Score will be given lower minimum bids to stay active and trigger ads. Keywords with a lower Quality Score (including those that are currently on hold) will have the opportunity to run if your keyword or Ad Group's maximum cost-per-click (CPC) meets the minimum bid.
  

  
  

  The Quality Score is determined by your keyword's clickthrough rate (CTR), relevance of your ad text, historical keyword performance, and other relevancy factors.

  Ad Rank, or the position of your ad, will continue to be based on the maximum CPC and quality (now called the Quality Score).

  
  

Questions for Google:

Goyami:
Do you have a more specific target date for implementation?

Google:
Google has not set a specific launch date for this change to the AdWords system. The announcement indicates sometime in the next few weeks. We will notify you as soon as we have an update on the target date.

Goyami:
It says that keywords will be assigned a minimum bid based on it's
quality score. What is the range of minimum bids and where will we be able to see these bids?

Google:
The current range of bidding possible within the AdWords system is $0.05-$100. With this upcoming change, the minimum CPC will be reduced to $0.01, and therefore the possible CPC range for AdWords will be $0.01-$100.

Goyami:
When a keywords in deactivated, what is the process to re-activate?
Will the interface display how much you need to bid to display this ad?

Google:
After we determine your quality-based minimum bid, your keywords will fall into one of two states: active or inactive. If your keyword or Ad Group's maximum CPC meets the minimum bid assigned to it, your ad will remain active. If it doesn't, your keyword will be inactive. Our interface will show the minimum CPC required to reach an active status for specific keywords.

Goyami:
Can you explain in more detail how the Quality Score is calculated?

Google:
The quality score is the most important factor we use to determine your keyword's performance and ad's position on a search page in the Google Network. Your Quality Score is determined by your keyword's clickthrough rate (CTR), relevance of your ad text, historical keyword performance, and other relevancy factors. The first 3 factors mentioned will be weighed heaviest in determining ad positioning.

Goyami:
In the past you have looked at how others performed on specific
keywords to decide if terms should be placed on hold, will these new rules apply only to my individual account and performance on the specified keyword?

Google:
The keyword statuses normal, in trial, on hold, slowed, and disabled will be replaced with active (triggering ads) and inactive (not triggering ads). In addition, accounts will no longer be slowed. Currently, accounts are slowed when they don't meet our performance requirements. The historical keyword performance is one of the factors and this will incorporate historical performance for your specific account on a keyword as well as the overall historical performance of that term.

We will keep you posted as we learn more, also let us know if you have any additional questions / concerns for Google.