Previous Query Refinement is where Google shows different Adwords ads based on your previous search history. So a search for “weather” and then “spain” could result in your search for “spain” showing some weather related adverts.
This is about to become a big deal as Google is rolling this out to the organic results as well as the Adwords results so I decided to take a look at how aggressive it is. What I found was quite surprising. Take a look at the ads appearing when I search for “loans” and then “search engine optimisation”.
Google is showing 5 ads for the subject I am searching for and 4 for “loans”. Interestingly the coveted top result is for “loans” rather than “search engine optimisation”. The Previous Query refinement system isn’t new but I can’t ever remember seeing it in action before which probably means it wasn’t as aggressive as this.
I wonder what the CTR is on ads that are not related to the current search?