There is nothing like a downturn to force a company focus on the bottom line, even a company like Google whose bottom line is still growing at a healthy pace. Continuing its recent efforts to juice advertising revenues wherever it can, Google is changing the way ads are placed on its search results pages.
One of the two biggest determinants of where an ad ranks compared to other ads on the same results page is an ad’s “quality score” (the other is the amount an advertiser bids for a particular keyword). Google is making two tweaks to how the quality score is calculated that could have a major impact on which ads appear at the top of the page.
Lots of factors go into Google’s algorithm that determines the quality score for any given ad, but how many people actually click on the ad is one of the major ones. Ads that appear first, though, get a boost in click-through rates simply by being listed above all the other ads. Google is now taking into account the boost in click-through rates an ad gets by dint of its position, and backing that out from the quality score. That should result in a boost to overall quality scores.
The second change will be more visible. We’ll be seeing a lot more ads above search results in addition to the side because Google also just made it easier for ads to occupy those slots. In the past, only ads with that were both ranked the highest and met a minimum quality score would be placed above the regular search results. Here’s how Google explains this change in its AdWords blog:
To appear above the search results, ads must meet a certain quality threshold. In the past, if the ad with the highest Ad Rank did not meet the quality threshold, we may not have shown any ads above the search results. With this update, we’ll allow an ad that meets the quality threshold to appear above the search results even if it has to jump over other ads to do so. For instance, suppose the ad in position 1 on the right side of the page doesn’t have a high enough Quality Score to appear above the search results, but the ad in position 2 does. It’s now possible for the number 2 ad to jump over the number 1 ad and appear above the search results. This change ensures that quality plays an even more important role in determining the ads that show in those prominent positions.
The change also ensures that there is a larger pool of ads that can be placed up top. Those ads occupy the most valuable real estate on the page. Putting more ads there should result in more clicks, and thus more revenues for Google. And remember, because of change No. 1, there should be more ads with high enough quality scores to make it to that coveted spot.
In the past, Google has been conservative about which ads it would place above search results because it does not want to dilute the overall search experience. By redefining what makes a quality ad, it can put more ads up there and still feel good about itself.
Interesting… but by the reports they’ve given us, the top ad on the right out performs the second ad over the search results. In the end, it paid to be either first or third when two ads were above the search…
In general, I’m all for “quality” being focused on, as Amazon will always be able to out-spend me in my niche.
I’m a fan of the quality score addition. I think it forces advertisers and do-it-yourselfers to develop more relevant ads for their audiences. As a result, customers will get more satisfaction out of the higher quality leads they generate. I also like the idea of making it a combination of quality + what you’re willing to pay.
kind of a reverse click fraud (abuse). I want my ads on top, so I click my own ads more to bring up their performance (while paying for those clicks)?
If you click on your own ad you will get caught and warned/banned.
I’ve never seen an advertiser warned, much less banned, for clicking on their own live AdWords ads.
In fact, it’s a pretty common “trick” among SEMs – clicking on your own ads when you launch a new campaign to boost your initial CTR. It’s effectiveness is questionable, and I haven’t seen any empirical evidence that it works. But I still do it.
Smart move on Google, another cute little tactic they can preach to companies telling them they will have more ads at the top and highlighted resulting in more traffic. This probably hurts the little guy though.
Craig
http://www.budgetpulse.com
One has to argue in favor of the ‘QUALITY’ of those sites that appear in the number one position on the organic results on the SERPs.
Putting any ad above the organics – regardless of the so called quality – is insulting to those sites who have worked years to get there. Whose existence has been validated by clicks-throughs and high quality backlinks, as well as dozens of other complex algo measurements imposed by Google.
Money buys everything.
And your site wouldn’t even be there if it weren’t for this practice, as google would have long gone bankrupt without such ads.
Glad someone brought this up. The G is all about the $. They don’t give a crap above relevancy except that which gives them more green.
I am still surprised in this day and age that advertising itself can sustain a business. I hope this trend goes away and people get realistic about budgets & spending. Get a real business plan.
I know that google has done well till now, but seriously take a look at their stock price and forecast how long this can continue. When they economy finally stabilizes (in the next two years or so) I don’t think that google will again attain such inflated pricing as it once had. At least not from ads sales alone.
And if your quality score isn’t there yet you are forced to bid up to get back in front of those ads that just leapfrogged you – driving up bid costs for everyone
Why? The article just said that it doesn’t take into account the extra clicks you get from being higher up.
If Google can really improve quality results then I am for it. But doing so for revenue purposes, dilutes the intention. Why not just leave the ad on the side ranked on quality? Because they want the revenue.
If a searcher wants to click they will find it, top placed ads might just get clicked on because they are there, which costs the advertiser more money.
That makes sense. Reward those that attract more attention. I wonder if Google factors in “back” button percentages to weed out those with clever ads, but little substance.
Yes – landing page performance is part of the Quality Score. However, it does not negatively affect Quality Score. Landing pages will either have no affect or a positive affect on the Quality Score. So, theoretically, sites with ‘good’ landing pages will have higher Quality Score and those with ‘bad’ landing pages will have not effect to their Quality Score.
Advertisers call this the “bounce” rate, and I’d be shocked if Google didn’t take this [and the average time spent on the advertiser's landing page & site] into account. It’s probably one of the single most important metrics to measure the relevance of an ad placement and its’ creative/copy.
It all comes down to improving your quality score by focusing on relevant titles and ad copy, fast and relevant landing pages, and high conversion rates. If you have all of those things you’ll get higher placements without placing higher bids.
Do no evil.
smart move by google
they will reap bigger profits soon
“Google is now taking into account the boost in click-through rates an ad gets by dint of its position, and backing that out from the quality score. That should result in a boost to overall quality scores.”
This has been the case for quite a while now, you’re quality score click-through impact has been pro-rated by your position for a long time, this isn’t a new item. On Google’s Adwords blog they say “In the coming days, we’ll update the portion of the Quality Score algorithm that accounts for ad position.” An update means they are updating the logic of this, not that it is ‘brand new’ as you seem to portray here.
Also your logic that this should result in a boost to overall quality scores is flawed for two reasons. First we don’t know if Google’s update is going to get rid of overly large influence of click-through for position, or too little influence of click-through for position. So a more accurate assessment would be that it will result in a negative normalizing of those quality scores that have been impacted too positively by high position and an positive normalization of quality scores that have been impacted negatively by low position. Regardless of your flawed logic, this ALREADY exists, they are just tweaking the logic, as per their blog.
The second item you mention, leapfrogging to be above the organic search results is actually new.
Money buys everything. I not think so, Money not everything, Quality is everything
I used to work on the ads quality team so I feel the need to jump in an defend my friends a bit here.
I think this post’s implication is that Google is sacrificing user experience by redefining quality in an effort to make more revenue. This isn’t true.
It’s important to note that the team that makes these changes is “Ads Quality,” not “Search Monetization.” The team’s job is to drive quality and the metrics they are driving have been the same for many years. What’s really nice about websearch advertising is that making the user experience better also maximizes long term revenue because people trust your ads and keep clicking on the ads.
The team makes decisions very carefully and with a lot of data to back up these decisions. Ads quality at Google is an extremely principles driven team. This group is still run by the same people it has been run by for many years and they wouldn’t sacrifice user experience (as measured by the same metrics they’ve always used) because it would go against the team’s mandate and their own principles.
Whether goal is ‘quality’ or monetisation, it’s clear they are relaxing the QS score. I’m in favour, because the QS score is way too aggressive.
One of my clients is a travel based website and the old QS score mean’t we couldn’t afford to bid on certain locations despite the fact we regularly arrange travel to them. No brand names involved, just unfair taxation of certain terms.
Very interesting move on google’s part.
- Scott from http://venturedig.com
I think that the quality score is obviously going to be helping out not only the google advertising department, but also the users who are looking for fast and effect search results. My only problem with it, which I don’t really have one, but if I was an advertiser who put a lot of money into advertising for google, I would definitely feel like I was getting the shaft.
How are they going to fix the click abuse? I think this is the most urgent issue that needs to be investigated.
More ads for search! Yuck, although everything Google does w/ search faces some backlash. I just can’t see why a consumer would want more ads above the organic search. .
The quality (relevance) of the organic results can have a big impact on the CTR of the Adwords ads. You can have a highly relevant ad, yet lousy quality score, because the organic listings are too good. Lower CTR = worse “quality” score.
Google assert that lower CTR, therefore less relevant, when in fact lower CTR can be due to better (more relevant) organic results. Google compensates for the fewer clicks by whacking up the CPC.
Good point!
And why shouldn’t they? If the organic results are more relevant than the ads, then why have ads at all, or at minimum make them expensive. This supports their objective of giving the users what they want. If CTR normalized for position for ads is not an indication of what a user wants, then what is?
“when in fact lower CTR can be due to better (more relevant) organic results.”
That sentence means “better than the the typical search results Google churns out”, not “better than the ads”.
It’s like a drug, they giving it to people in small doses.
Tune in for 2010, where everyone will pay just to get listed. Brilliant scheme, small doses.
Google’s QS has brought out the real market price of each keyword for a given site. In some cases, price can go up more while advertisers are still making money. This can be seen as the revenge of the nerd / publishers / affiliates for getting the wrong end of the deal from the advertisers for a long time.. also profit is the reward of the talents, and Google must be proud of making more of it with the innovative talent pool they have.
Squeeze more from less. Can’t last as a long term fix.
Good Topic. Nice
Wow, I’m glad they finally changed that. Their new system was frankly getting a bit ridiculous in my opinion.
the way google places its sponsored links is still better than some other search engines on which you cant even distinguish natural ranking from ads
I find AdWords very frustrating. Oftentimes Google won’t show my ad for a relevant keyword even if NO ads are showing. Even if the ad itself has the keyword included, the keyword is in my list, and there is no “minimum bid” specified for the keyword!
Until Google are more transparent about ‘quality’, this system should be viewed with extreme suspicion. Their approach seems to be: 1) cloak the help system with obscurities and vague references to user experience, 2) create distrust by serving irrelevant ads (think eBay), 3) offer a lifeline by letting advertisers show ads by bidding $5 per click… i really hope a competitor designs a better solution soon.
Dang Mike,
I see you know your stuff when you yap about Google I see. Well, just stay on your grind with that Googles and Googles chatter…lol
Really it makes sense, Google wants to reward the most relevant sites.
We use both Google Adwords and Adsense. I like both. I understand Google needs to keep improving the users experience and think what they are doing is a big positive for everyone. My website ezdate123 would not be up if it were not for Google. it is very tough getting a website noticed these days….With a little SEO and Adwords everyone has a chance to compete no matter what your budget may be… Mike/ezdate123
Very helpful. This is the only obstacle preventing me from engaging in a successful Adwords campaign.