Last week, Google Grants made a major change. Max CPCs were increased from $1.00 to $2.00. The old $1.00 max CPC restriction in Google Grants, made it difficult for participating nonprofits to compete in the auction. Now the $2.00 might make some room to allow nonprofits to compete. Most likely this change will continue to drive up CPCs even more.

Here’s the official email announcement to Google Grantees:

“As part of our ongoing efforts to grow our advertising program for nonprofits, we are making two changes to the Grants program. First, as of January 28, 2013, Google Grantees may bid up to $2.00 USD on keywords. This is an increase from the previous CPC bid cap of $1.00 USD and may allow your ads to enter auctions previously unavailable at the $1.00 bid cap. Second, to balance the interests of businesses who pay to advertise on Google search, your ads will now appear below the ads of traditional AdWords advertisers.”

The second part of the announcement, regarding Google Grant ads being shown below paid advertisers is a red flag. It is still unclear as to how this will affect average position, but it is most definitely something to keep an eye on.

To get more details on Google Grant bid and budget restrictions, please visit the help center.