The much expected revision of the Google API terms was released today by Rohit Dharwan on their Blog.

It’s going to have a major impact on bid management companies in the Google space, increasing their cost base dramatically. It will also impact the number of bids placed per day, given that there is a charge for every bid placed, in effect.

It also encourages advertiser to build their own systems, instead of tapping into 3rd party tools. My view is that 3rd party bid management companies are going to have to seriously look at the bid management strategies and start focusing on issues like quality score, instead of just price.

I am currently in Munich, Germany, and I spend the day with about 4 groups of people, explaining how Google Adwords is not a price war marketplace, as Overture current is today.

It’s astonishing to me how many companies feel that increasing prices on Google is the best way to increase their rankings. What’s even funnier is that Overture created this mentality amongst advertisers, and they’re jumping ship and going with a Google-esque system very shortly.

The top advertisers will attest that PPC management is not a bid war, it’s a user relevancy war. The more relevant your campaign is, the higher the rankings, the lower the max bid and the higher the Adwords discounter.

Hopefully these new Google API changes will reinforce these facts.