Google has just announced that it has implemented the change in the pricing for top ads in the special colored boxes above the organic listings.
http://adwords.blogspot.com/2007/08/improved-top-ad-placement-formula-now.html
The bottom-line that I see from the change is that it will now cost more to be in the top spot. Previously one got in the top spots based on performance – about 2.5% + in CTR. Now it appears that not only will the CTR and ad quality score be a factor, but what you will sign up to pay by your max CPC setting as well.
It appears to me that Google is posturing itself to charge the full max CPC in the account when an ad appears in the top spot from their comment “Review your account for maximum CPCs that are higher than the maximum amount you’re willing to pay.” Google has always said that it can charge the full max CPC in the account and now it appears that they will if an ad appears in the top spot.
Quality score has not been a huge factor for accounts that we manage as we work hard to get and keep a good score, and performance in most cases has not been an issue either, but now we will need to watch carefully that the CPCs set in the accounts do not hit figures that we are not really willing to pay in an effort to get into a certain position on the page.
This aspect will particularly affect an account or ad group where a clients is really wanting to appear in the top first or second position or possibly even the third position. Clearly they will pay more to Google to get there.