Google to Tweek Quality Score

Google has today announced plans for further changes to be made to their quality score algorithm following the changes to the Google scoring system which took place in September.

The latest announcements as announced on the inside Adwords blog are not yet in place but are likely to be in the next week so it is considering how they may affect your Adwords campaigns.  The changes come in two forms:

Position Normalisation on CTR Influence

Reading between the lines on the release (it isn’t Google’s clearest ever announcement!) Google are going to be accounting for the position of an ad when deciding how significantly CTR should apply to the quality score.  Traditionally CTR has played a huge part in the quality score algorithm and I have no doubts it will continue to do so, but the problem with it has always been, it can be bought.  The big spenders, with the deep pockets, can afford to bid to position 1 and buy a good CTR in a short space of time.  Through this latest change Google are aiming (at least I hope) to reduce the ability to do this by accounting for position when judging what constitutes a “good” click through rate.  So for example a CTR of 3% in position 5, would be determined a better judge of quality than 5% in position 1 where the ad is the first thing is searcher sees.  This should allow for a much more level playing field for the lower spending advertisers and negate, to a certain degree, the spending power of the big players.

Changes in Position 1,2 and 3

Traditionally the top 3 positions which appear above the natural search results are determined by whether the top 3 advertisers in the max CPC x QS model had a sufficient quality score to merit inclusion in the top bar (what quantifies sufficient is unknown).  These three positions are highly valuable and get high CTR due to their prominence on the page.  What the latest changes are going to do, in essence, is to place more emphasis on ad quality and QS in this equation and less on max CPC (see a trend here?).  So that if an ad in position 1 doesnt have the necessary CTR and ad quality to appear in position one, but wins the general auction, it wont stop the ads in position 2 and 3 from leap-frogging into these prominent positions.

My general feeling is that these changes will normalise the market for the benefit of the small business PPC marketer.  Obviously Google will still make their money as a lot of clicks at a medium CPC is better than a couple of clicks at a high one.  it could also prompt the big PPC spenders spend even more as they try to achieve the positions they previously hold, win win for Google!

I expect a pretty turbulent PPC landscape over the next week so Ill be keeping a close eye on things, I advise you to do the same!

Google to reverse minimum bid and introduce dynamic quality score

The Google Adwords blog has announced a number of “quality score improvements” (debatable use of the word improvements!) which will come into play for your Adwords listings in the near future.

Removal of min bid - Firstly it is removing the current system of allocating each keyword a minimum bid amount which must be met for you keyword to appear in the paid search listings. All listings will have the chance to appear on whatever keywords they wish with just quality score and max bid amount dictating the position of the listing (essentially a move back to the old system prior to min bid being introduced). The minimum bid system is to be replaced with a CPC estimate for your first page bid, that is, the bid amount Google estimates it would take to get your ad on the first page.

Dynamic/search query level quality score – Secondly the quality score system is going to be changed so that it is allocated at search query level rather than keyword level. This means an advertiser bidding on broad match phrase loan, will have a different quality score on the term secured loan to personal loan and the phrase loan itself. Also accounting for user data such as location (based on IP and Google account details).

What does this mean to Google?

More search listings!- These changes should see the appearance of an increased number of listings on any given search phrase. With people able to appear on any keyword they wish (so long as they are willing to pay) and a large number of previously inactive keywords will suddenly come into play. 

More money! - Essentially what Google are saying is, “You want to appear? Fine, but it’ll cost you!” and I’m sure many advertisers will pay that money….to begin with. Much like the changes in trademark bidding my prediction is a flurry of activity before things die back down and things return back to normal

More competition and increased CPCs! Linked to the above point, by telling people what it will cost them to appear on first page Google are prompting people to increase their bids to get the exposure. If an advertiser is appearing on the second page and sees that they could be first page for an increase of £0.20 CPC, there is the temptation there for them to make that increase which they may not have previously done. Once this temptation is there for every advertiser the whole market for first page listings should become more expensive.

What does this mean to advertisers?

The return of the long tail - Although it has remained beneficial to have a long targeted keyword list for a lot of advertisers the broad match system has allowed them to be relatively lazy. The inclusion of quality score at a search phrase level will mean that it will become much more important in terms of an increased QS and a reduced CPC to have all relevant keywords in your account

Increased brand term CPC? - This ties in very nicely with the removal of brand term protection a few months ago. The function that stopped this from being a long term issue was the minimum bid. Competitors were struggling to make the most of the changes as they were blocked by not having a high enough bid. With the latest announcement this has been removed. So although people will be forced to pay more to bid on a competitors brand, they will not be banned completely, probably producing the same surge in brand CPC as last time (approx 130%) which would equate to a 169% increase since the beginning of the year!

Higher first page CPC - As touched on in the section on Google the likely hood is that these changes will produce more competition for first page listings resulting in higher CPCs. By allowing people to see what it will cost them to appear on the first page you are giving them the push to bid to that level. Some will shy away and save their spend, to others it will be the carrot they need to make the next step.

The changes are set to be rolled out to “a very small set of advertisers” in the next few days according to Google but make sure you keep an eye on your campaigns as I expect the full rollout will follow on from this soon after.

Trademark removal – the aftermath

So after all the hoopla about Google removing the trademark protection from its Adwords system (of which I only got chance to write about once as I was too busy doing something about it at work!) what was the outcome?  The removal happened on Monday (bank holiday, coincidence? I think not) while most of us were enjoying the good weather or a badly played round of golf in my case.  You can be damn sure there were no affiliates out on the golf course as they were all in-doors getting on as many brand terms as possible to make the most of the changes.

The net affect from what I have seen is the obvious rise in brand ownerships CPCs (about 30-60p increase on average) which is a big deal if you are somebody who relies no their brand sales to bring down the overall cost of the medium.   Affiliates and clued up competitors are having a field day at the moment with not many people following Tesco’s moral stance of not bidding on competitors terms.  I personally think it will all begin to die down as people realise the inflated CPCs they are going to have to pay to bid on competitors terms due to their lack of quality score will see a lot of them decide it is not worth the bother.  But many companies are going to have to review their affiliate strategy and make sure they have clear guidelines on what is allowed and what isn’t otherwise they will end up paying out a small fortune to affiliates who are doing nothing more than brand bidding.