There are multiple observations and opinions on what Google AdWords account history is (“karma” based on expenses, keyword quality score, and / or something else?) and how it affects the pricing of current and new campaigns in that account. Let’s get to the details and find our own way through …

From here on: CTR = Click Through Rate; QS = Quality Score; CPC = Cost Per Click. Note that “karma” is my word for this problem, you’ll not find it applied by others.

What constitutes AdWords account karma?

Here are some proven and possible influence factors on account karma; by relevance for the advertiser:

  1. Accumulated keyword QS. It is credibly claimed that: running an AdWords account with low keyword QS values is bad karma, and the lower the QS values and the longer the time running that way, the worse the karma. The negative karma even affects campaigns on this account that target a different domain and completely different keywords – the karma “sticks with the account”. It is still unclear if this works also the other way round, that is, if a good keyword QS history decreases the minimum bids compared to a fresh account.
  2. Amount of expenses.  Just a claim, unproven so far. The idea is that Google might see it as positive karma if you spent a lot in the past within an AdWords account, assuming that you will be a good deal for them in the future. Handing out good karma for that would in effect be supporting high-turnover customers with a discount.
  3. Account inactivity. Just a claim [source], unproven so far and probably non-existent. From personal experience: we had run a larger AdWords campaign for 14 months, then suspended it for 7 months, then started it again. Keyword QS values were still all great and minimum bids had only risen a few cents, not above what we had expected because of the growing competition in our business area.

From what I read on the Internet, I did not find any evidence that Google puts “penalties” on AdWords accounts. (I’d like this to be understood so that penalties are one-time powerful, immediate price increases or other negative influences that hit you out of thin air, while good and bad karma slowly accumulates based on all your acts, not on one individual decision by Google). Most problems where people suspected AdWords “penalties” could be (at least probably) resolved by removing existing severe issues with the landing page quality. So one would not have to really fear this, as this type of “landing page penalty” would be correctable, whereas an alleged (but seemingly non-existent) penalty on the whole account could not be corrected but would permanently stick to it.

Effects of AdWords account karma

  • It is reported from tests that a “bad karma” account meant an eight to tenfold higher minimum bid than in a fresh account, with all other things kept the same [source; similar results in a comment; note: from 2007]. The interesting thing is that this is valid for the whole account; it’s not that poor past performance of one keyword increases the minimum bid of that keyword (this happens anyway) or of similar keywords, but of all keywords in all campaigns.

Recommendations of Best Practices

Correct me in the comments where I err, but you can’t sue me over these. No warranties whatsoevermore.

  1. Use one account for staging and one for production. The sole purpose of the production account is permanent low minimum and overall discounted bids for your important keywords. The sole purpose of the staging account is allowing wild tests and experimentation without adverse side effects. This kind of separation seems to make sense only for complex or expensive AdWords jobs, as the effect of karma is not too big ( for example you get the recommendation to only start with a new account if the old one run several months with very low QS values [source]).
  2. Set yourself a minimum QS and CTR for keywords in your production AdWords account. These limits protect the account from accumulating bad karma and that way help keep the CPC for your important keywords low. The main point with keeping good karma is reportedly to “have good [CTR] performance of all your keywords throughout out your account” [source]. But setting a minimum for both QS and CTR is meaningful because CTR is the hugest influence on keyword QS, but not the only one; keyword performance for other advertisers, past keyword performance, keyword relevance for the ads in the ad group, keyword relevance for the landing page, landing page quality and landing page speed are also incorporated. I would propose a minimum keyword QS of 7 (allowing some exceptions with 6) and a minimum keyword CTR of 2 – 4%, depending on your domain.
  3. If you screwed the karma of an AdWords account, start over with a fresh one. This is not dangerous as the “zero karma” of fresh accounts is quite a good start, as demonstrated by the experiment done by smaxor: a screwed account yielded position 150+, a new one position 10, all with the same bids on a keyword. However, note that this experiment is from 2007, and much might have changed since.

Discussion of Best Practices

Is there a penalty for advertising one website from two Google AdWords accounts?

The Google AdWords Editor help talks quite freely about managing multiple accounts at once, so the fact of having multiple AdWords accounts alone is no problem at all. At least when managing them for clients.

Now the Internet is mostly silent if this also applies when advertising the same website with multiple accounts. One author suggests that advertising the same website from two AdWords accounts would lead to the website getting “banned” from marketing it via AdWords [source]. But apart from a similar claim in the smae thread, I found nothing supporting this, esp. nobody who related such an experience.

Google AdWords help just says that one should avoid cases where two ads, leading to the same website, compete for one keyword [source; there, on “Avoid duplicate keywords across ad groups.”]. In the help article, this reffered to a case within one account, but a case with two accounts is a bit similar. However, the article did not say anything about “penalties”; just that it does not help you anything, as Google will show at most one ad per advertiser and search. However, if you want to be careful, try to avoid duplicate keywords between your two accounts. See AdWords Help on finding duplicate keywords.

The only other caveat that seems reasonable to me seems to be: avoid the impression that you want to artificially increase the CPC for some keywords [source]. I would expect that this does not happen when advertising one website from two AdWords accounts (as, according to the AdWords help article quoted above, these ads don’t compete with each other as they are mutually exclusive). However, I would not: target different sites with the same keywords from different AdWords accounts that have the same account owner. That would seem like tampering with the bidding system by “competing with yourself” and that way driving others out of business because they then can’t pay the minimum bids any longer.

Should I use a different domain as target for my AdWords experimentation?

It seems true that “bad AdWords karma” does not all stick with the AdWords account, some will also stick with the website [source]. AdWords tests and experimentation will necessarily result in some advertising with low-QS keywords etc.. But, tests only run for short times, most of the bad karma sticks with the AdWords experimentation account, and only a little bit will stick with the domain. You will probably not notice any results of that in your production account advertising, because production ads volumes are much higher and therefore the good karma generated by that outweighs the bad by far. In addition, creating a second website with same or similar content is way more “dangerous” in SEO terms than that tiny bit of bad karma on the domain … . So after all, it seems not at all recommendable to use a second domain for testing.

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