Originally Posted by AdSense Newsletter

Better and Better Ad Relevance

First, we're enhancing our targeting technology to deliver ads that are even more relevant to the content on your site. Over the past year we've been refining the technology we use to deliver ads to content pages by leveraging data from across the Google Network, monitoring results, and feeding this information back into the system. In other words, our technology is becoming smarter all the time. Now, in addition to understanding the overall meaning of a page, our technology determines the relevance of concepts found on a page to pick better performing ads. With this change we expect to deliver ads that better complement the content on your site and provide even more value for your users. The bottom line: increased relevance, and higher clickthrough rates.

Smarter and Smarter Pricing

Second, we're introducing enhancements to our pricing model for advertisers. Google's smart pricing has always provided better placement for better performing ads, and reduced the cost of a click to the least amount possible for an advertiser to stay above their competitor's ad. Now, with the new AdWords pricing model, weО©╫ll also automatically adjust the price of clicks across the Google Network based on their expected value to the advertiser. A number of factors will be taken into account when calculating the expected value, including the keywords or concepts that triggered the ad. For example, a click on an ad for digital cameras on a web page about photography tips may be worth less than a click on the same ad appearing next to a review of digital cameras.

For advertisers, each and every click will deliver the strong return on investment they have come to expect from Google AdWords, driving even higher advertiser participation on Google and across the Google Network.