Google has released their new "simplified account management" system which does away with keywords being "on hold" or "on trial". Now keywords will be labeled as either active or inactive. Additionally, any disabled keywords will be purged from the system in a few weeks. Google announced the changes several weeks ago, (see Google Adwords Gets Rid of on Hold Keywords.

In Google's FAQs, they say the following:

"We've created this system to give you more control over the quality and cost of your own ad. By choosing highly targeted keywords and creating relevant ad text, you can pay less per click. On the other hand, if you want to run on an obscure and less-searchable keyword, you can. But you'll likely have to pay a higher CPC for it."

This seems rather counter-intuitive. If the goal for the new system was to increase quality of the ads, then I can understand them charging more for less relevant ads on popular keywords, but why charge more on obscure and less-searchable keywords with little to no competition?

My guess is this new "simplified" account management system may be a wolf in sheep’s clothing. If what they say is accurate about having to bid more on obscure keywords is true, than this could be no more than a way for Google to drive up their average cost per click fees on people who have done their research to identify non-competitive keyword niches.

It may not be "fair" but it should be good for Google's balance sheet. First they get to purge out a large amount of disabled keywords that are clogging up their databases, and secondly they get to drive up costs for inexpensive keywords without having to come out and say "We are increasing our minimum CPC". In fact they way the have approached this so far, they have actually indicated that the minimum CPC could drop below $0.05, but if you read carefully, this would only happen on highly completive keywords and already bid up keywords. So on those you might be able to bid $0.01 but your not going to show up.

Nice! What are you thoughts on the new system?