According to Barry Schwartz over at Search Engine Land, Google is about to release a new algo update to determine who gets to be chief of the top spot in AdWords. It’s always been more of ‘who wants to shell out the most’ type of position, but now they’re supposedly allowing better performing, more targeted ads to get the top spot without having to bid the most.
Regardless of what they may say, it will be silly to think it isn’t going to take big bucks to run in that top spot. I see the whole thing as a ploy to keep people spending their money and trying to be competitive. If you’re competing with 10 other sites that have crazy budgets and your business is a fraction of theirs, outbidding will never happen. This can cause the smaller budget advertisers to get complacent and not try to do better. Tell them they have a chance of being top dawg without paying top dollar and they’ll stay on top of it. Just my opinion, of course.