When Google introduced the concept of a minimum bid into the Adwords platform, I guess few advertisers and perhaps not even Google realized the effect it would have on their business.

Publicly, Google always maintains that relevance and user experience take priority over revenue generation and so the minimum bid was introduced to ensure that search engine users would not be bombarded with poor quality advertising. By raising the bar, Google forced advertisers to reconsider the ROI of their Adwords campaigns rather than spam the search results with ads by bidding en masse on cheap, non-commercial keywords in the hope of getting a few extra clicks.

Noble as the minimum was intended to be, most Adwords advertisers will be able to tell tales of being ‘slapped’ with minimum bids of up to $10 per click. Needless to say that very few businesses would be able to pay those prices and Google was never very forthcoming with a helpful explanation in order to lower them again.

On a bigger scale, the minimum bid also completely negated Google’s argument that it does not behave as a monopoly in the search engine advertising market. By setting a bottom, the free market auction for keywords becomes a whole lot less free and Google theoretically can tweak the minimum bids to squeeze the most out of its advertisers and boost its revenue. That is a factor the company cannot ignore as it keeps increasing market share and attracts ever greater scrutiny from governments and competitors.

By abandoning the minimum bid for a ‘first page’ bid Google hopefully will introduce again greater transparency into its advertising platform. More practically, Google’s move will reactivate a sizeable portion of ad inventory that currently sits dormant on its platform and give the company a boost in revenue in time for the upcoming holiday season.

So although as an advertiser we welcome the perishing of the opaque minimum bid, we will be keeping a close eye on our costs as a mass of previously inactive keywords comes back online.