Google AdWords now personalized

Hat Tip: Found via Greg Linden's blog: Google AdWords now personalized. Below are my thoughts and questions:

Google is now reaching back into your previous search history and presumably choosing a better previous search if the current one is not sufficiently monetizable.

Questions:

• Is the goal of Google to increase the fill-rate of ads or to show more valuable ads in general?
  
• What criteria is used to reach back into a user's history? Boolean commercial/non-commercial then select last commercial search versus choosing based upon some selection algorithm from the last N searches (see previous point).
• Will the reach-back cross a topic boundary or is it only to enhance context for an ambiguous search?
  
• What effect will this have on the Google Keyword Tool that helps advertisers forecast demand and price for a keyword? The volume numbers must now be adjusted by the amount of time the impressions are shifted to alternate keywords.
• How much will this starve the long-tail of searches? Depending on the aggressiveness of the selection then long-tail searches may suffer a decrease in volume for adwords.
  

Even the most modest change of merely using recent previous searches only 'about' the current search to augment the adwords auction query should have a dramatic effect on the auction process. By definition it expands the number of bidders for a particular query. It may also curtail the effectiveness of arbitrage done by some adwords buyers who buy ambiguous lower value keywords as proxies for high value ones due to user sessions with query reformulations. Why? It should have the effect of driving up prices for the penny keywords if they are sufficiently related to high value keywords.

It will be interesting to watch what happens. This is likely not a non-trivial change in the keyword market.

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