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Friday, October 31, 2008

Ad Position, CTR & Quality Score - We're Going to do What we Already Did

New post at the AdWords blog this morning about our favorite topic, the quality score. Before I get to the meat of this post I wanted to highlight one line from that post:

"Clickthrough rate (CTR) is the most significant component of Quality Score"

(We already knew that...just added in case anyone is still unclear about how they can improve their quality score...)

Ok now on what this post is actually about. For years Google has said - in person and in writing that ad position is taken into consideration (normalized) in terms using CTR to determine the quality score. More precisely Google has said:

Misconception: Showing up in a higher position will benefit my Quality Score

Fact: Quality score is normalized to compensate for differences in performance for ads in different positions.
  • An ad in a higher position is predisposed to get a better CTR.
  • An ad above the search results is predisposed to get a better CTR.
I know I'm not the only one that's been given this information.

The post today on the AdWords blog says:

"As you probably have observed, ads in high positions typically earn better CTR than those in low positions, because ads in high positions are more visible to searchers. To calculate the most accurate Quality Scores, it's important that the influence of ad position on CTR be taken into account and removed from the Quality Score.

In the coming days, we'll update the portion of the Quality Score algorithm that accounts for ad position. This will result in more accurate Quality Scores, ensure that ads compete fairly for position based on their quality and bid, and enable Google to show the most relevant ads to searchers by rewarding high-quality advertisers with better ad positions."

Based on what Google has said in the past I think the majority of advertisers assume that what Google is saying they are now going to "update" has indeed already been in place for years. I mean can you make some thing more normalized?

A column I read at Search Engine Land this this morning further adds to the confusion. The article states:

"In the past, CTR was all equal. No matter how high or low your ad appeared, an impression on the ad was an impression and it counted towards your quality score equally. For example, if your ad was in the 8th position, on the first page of a search result, you were less likely to be clicked on than an ad in the first or second position. But since the CTR was calculated equally, Google did not take into account that the first or second ad would have a higher probability of being clicked on than an ad in the 8th position. This upgrade will change that and now will take into account the ad position while calculating the quality score. Google said this should make the quality score more accurate, allow ads to “compete fairly” and show searchers more relevant ads."

So after reading everything this morning I think we're left with 2 choices:

1) CTR already is and has been normalized by ad position in relation to calculating the quality score. Google's now somehow going to do this "better". If someone could explain to to a simpleton like myself how this may work I would appreciate it.

2) The SEL column is correct and up until this announcement there has been no normalization for CTR/quality score at all.

Personally, I lean towards #1 based on all the data I've seen over the past few years but given the fact that up until somewhat recently advertisers really couldn't even see their quality score with any level of granularity I won't say I could produce factual data to back up my assumption. I'm just curious how this could be done "better" as Google is now claiming they are going to do.

Any thoughts?


At 8:53 AM, Blogger rustybrick said...

Thanks for the reminder, I am pinging Google on this. You are right!

At 9:01 AM, Anonymous Chris1 said...

Google has definitely been normalizing CTR in its AdWords quality score/ranking algorithm for years. They must be making improvements to this. The SEL column is wrong.

At 9:28 AM, Blogger Jeremy Mayes said...

Thanks Barry, please let us know what they have to say. Their post is pretty vague.

Chris1...I've been a firm believer of that as well. I'm just curious how they could make it better. I mean, it's either normalized or it's not right?

At 11:36 AM, Blogger Jordan McClements said...

It does seem like a very strange thing to say. IF they are going to bring this up specifically you would think that they would provide more info - either that or not bring it up at all!

At 1:17 PM, Blogger Jeremy Mayes said...

The SEL column has been updated to include:

“The first change mentioned in yesterday’s blog post simply gives advertisers advance notice that we’ll soon be making improvements to the existing technology that we’ve already been using to account for ad position. We’ll employ fresher, updated data that will help us calculate Quality Scores even more precisely,”said a Google spokesperson.

At 1:17 PM, Blogger searchquant said...

I know what's really going on, but won't tell, at least until I have time to do a proper blog post...

At 2:25 PM, Blogger David Rodnitzky said...

As with every Google QS change, the change is made to improve the bottom line and for no other reason.

For this reason, I am 99% confident that QS has always been normalized by position - to not normalize by position would reduce Google's revenues since it would not maximize CTR in an apples to apples environment.

Interesting how there always seems to be a QS announcement at some point in the middle of Q4 . . .

At 2:25 PM, Blogger rustybrick said...

This whole post is strange. In any event, I appreciate all the help guys. Sorry about forgetting about CTR normalization - maybe it was the head cold. ;-)

SearchQuant, do share - comeon...

At 2:41 PM, Blogger Jeremy Mayes said...

"I know what's really going on, but won't tell, at least until I have time to do a proper blog post..."

Me too:

"As with every Google QS change, the change is made to improve the bottom line and for no other reason."

Joking aside...searchquant, spill the beans!

My hunch is they are raising the virtual bar - you better be able to get higher CTR in lower positions or you'll face higher average CPC's. There's a HUGE gap between what Google's getting for spot 1 vs spot 10 and they are making a strong push - the strongest in years - to squeeze every penny out of those page 1 results.

At 6:25 PM, Blogger Gregory said...

Do you think bounce rate on the landing page is a factor in Quality Score?

At 12:44 PM, Blogger tdwhalen said...

searchquant knows everything and don't doubt it - why, just this morning searchquant told me what i'm having for dinner tonight - that guy is GOOD!!!


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