In the upcoming weeks, Google will be releasing an updated algorithm to determine the ads that are displayed in the top ad spot, above the organic search results.

The updated algorithm will continue to use the quality and cost-per-click (CPC) figure but will be slightly tweaked for that top ad position. Instead of using the actual CPC, Google will use the advertiser's maximum CPC in the overall equation. In addition, Google will be applying a stricter threshold on the quality component for the top ad positions.

Nick Fox, Product Manager of Ad Quality at Google, told me that this will help produce better quality ads in the top ad position because they are adding that stricter threshold for those ads. Plus, this will give advertisers more control over obtaining a top ad spot.

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