Archive for the ‘Quality Score’ category

Remember The Exact Match Option

January 7th, 2009

Starting small is golden therefore newbie’s performance numbers are usually not big enough. I mean say hundreds of or a few thousand impressions a month, and much much fewer clicks. If you have ever tried to ride a bycicle you know that while it can be pretty easy at a reasonable speed, as you are slowing your vehicle down, balancing might get more and more difficult. A newbie may be in a similar situation if he wants to investigate the relationship between the CTR of a broad or phrase match keyword and its Quality Score. (It’s common knowledge that CTR, or Click-through-rate, is the most important factor considered by the AdWords system in the calculation of your Quality Score. Now we are supposing that the beginner wishes to monitor in his account how his improving CTR will lead to better Quality Scores.)  

Paradoxically, he may experience a considerable increase in CTR associated with a worsening Quality Score or vica versa. The reason for it is that the AdWords system only gathers Quality Score data when a user’s query exactly matches the keyword in your account. E.g. in case you have the phrase match keyword “holidays” in your ad group it may happen that 10 users keying in the search query *summer holidays* see your ad and click on it. Say that 10 other users key in the exact search query *holidays* but none of them clicks on your sponsored link. In this scenario your phrase match keyword’s Click-through-rate is a fantastic 50% (10/20) while your exact match specific CTR is 0%. The consequence is that though you have a really high overall CTR, your Quality Score is pretty bad.

It may be frustrating and resulting in a distorted picture. It’s perhaps even more lamentable that you get the least information in this respect in the most sensitive first stage of your learning curve. For this reason I’d advise every newbie to list their broad or phrase match keywords as 2 match types — broad & exact or phrase & exact.  That way at least they are likely to grasp more quickly what is happening and why to the relationship between the CTR of their broad or phrase match keyword and its Quality Score.

Note that if the performance numbers are really huge, the above scenario is practically out of question. In such cases when you are improving the CTR of the broad match or phrase match, you should be statistically improving the underlying or embedded exact match CTR as well. However, this post is meant for newbies with low performance numbers.

High Minimum Bids Without Competition?

December 30th, 2008

All my former keywords (bids of a few cents for each click, #1 position) were suddenly doomed “poor quality” and “not relevant”. The minimum bid was raised to almost 90 cents though there is no competition.

It’s a complaint we hear most often from newbies to the Google AdWords advertising program.

You should see right away that the amount you bid is not the amount you pay. Google AdWords uses a so-called second price auction model the effect of which is that while you may bid 90 cents, the paid amount will probably be much less. The bid in this case indicates your seriousness, how much you *could* be paying. Of course, you can’t know for sure before you accrue clicks. However, based on general experience we may state that the price will be really lower since you have few competitors. Try to get a good click-through-rate and the actual CPC will go on lowering down to $0.10 or so. It should be noted that some savvy advertisers are known to have bid around $100.00 and paid $0.01. Generally speaking, your short-term competitors may increase the average CPC temporarily their actual costs, however, will get them to leave finally.

What you should achieve is to have a nice CTR in the region of 5% or higher, keyword search only. The Google AdWords system is considered to assume a cca. 2.5% CTR until you build up a meaningful history specifying your own actual CTR. Specialists argue the system seems to have a price goal for the space which is in fact a lower limit. In case your landing pages, ads and keywords are fine you may receive a good initial minimum bid. AdWords, however, modifies the minimum bids in stages. The second stage is the very first visit by the AdWords bot exploring your landing page quality and various relevance factors. If the bot results are poor you may see a sudden increase in your minimum bids which newbies are often upset with. Now you need to discover what the problems might be, create a new ad group and cancel the former one.

If the above remedies don’t cure the situation you are punished by a poor account history in the course of the AdWords auction. Established online businesses often rehabilitate such keywords by moving them to a new Google AdWords account. Small ventures, of course, are often unable to follow suite and have more difficulties with solving the problem. All in all, we may state that if you have few competitors you will not have to pay high costs per click for extended periods of time. Precondition is, of course, that you need to build up a meaningful history with acceptable CTR values so as to lower the actual prices. It’s plenty of work to do for any new advertiser.

Low Competition, Still High Bids?

December 19th, 2008

Many new Google AdWords advertisers complain that though they have managed to identify low competition keywords the AdWords algorithm assigns very low Quality Score to their keywords which leads to pretty high bid requirements for them. It defies logic – they argue since market forces are considered to ensure that low competition is coupled by low prices. In this article we discuss cases where the keywords are far from being popular among users.

1. “The system appears to be optimized for people selling goods of interest to millions of people, to huge marketers no matter what they are selling…” – this is an excerpt from a blog entry often cited by newbies. In some sense, it is true. It is much easier to advertise appropriate products using popular keywords searched for by hundreds of thousands of people especially if Google is *optimistic* about these keywords. However, Google is a profit oriented mass media and not a charity. Which mass medium would make life easier for someone with extremely uncommon keywords? Would TV commercials be helpful in marketing LaTex, a physics related “equation editor”? A new brand of shampoo is much more suitable for TV, isn’t it?

2. The problem is twofold.

- a. Historical CTR is a very important factor in your keyword’s Quality Score.

- b. Lack of previous history makes Google cautious.

(Google has good reasons for a./ and b./ and that boils down to *relevance*. However, this question is beyond the scope of this short article.)

Now, if your fellow advertisers used your keyword poorly in the past, Google is pessimistic about this keyword. If they did not use it in the past or just a few times, again: Google is pessimistic about this keyword. Google’s pessimism is, of course, reflected in your keyword’s low Quality Score which in turn means high bids for you.

3. Someone has recently asked me “Can only commonly-used search terms be used for keywords?” They are probably much easier to use due to 2.b. So what can advertisers affected by 2.b./ do?

First off, what would the equation editor’s seller do in regard to offline advertising? He may perhaps try to identify a periodical on physics which is read mostly by research team members and place an ad in it. Similarly, he can identify a few physics related websites allowed for placement targeting within AdWords and only run his ads there.

Others might be more interested in a general audience so they need to bid for keywords and the equation editor’s seller may also decide to bid for keywords in regard to his specific placements. The issue of 2.b is still to solve. Actually they need to alleviate Google’s pessimism about their keywords and as everything else, it costs money. If Google misses a good history, they have to create one themselves.

Though the bid is relatively high initially, they need to run the ad for some weeks. The turning point in regard to Google’s mood is believed to be around 2.5 CTR. If they can persuade Google through their results that they can produce a CTR above that value in the long run, they may expect the bid to fall drastically and remain low or even very low for the rest of the time. However, whether or not it’s worth the investment should be considered by themselves.

The AdWords Ad Ranking System & The AdWords Discounter

December 17th, 2008

During a discussion about the ad ranking system of the Google AdWords advertising program and the associated AdWords Discounter feature, a friend of mine has happened to tell me the other day that according to Google you will pay only a bit more for a particular ad position on the user’s search result page than the “owner” of the ad position that is below you. (If anyone of you accrues a clickthrough.) He concluded that it would make an actual CPC column like this one for example:

1st position: $1,04
2nd: $1,03
3rd: $1,02
4th; $1,01

The question is not stupid at all, my friend is following the right path, with a little misunderstanding, though. Google says that the AdWords Discounter monitors your competition and automatically reduces your actual cost-per-click so you pay the lowest possible price for your ad’s position on the page. It also says that eligible ads are arranged according to their Ad Rank where

*Rank = Bid x QS*,

where QS is the Quality Score that is determined by various factors, but first of all by the Clickthrough Rate and some relevance factors.

For various reasons, Google does not disclose every aspect of their algorithm but it is widely believed that the QS is *in fact* a number in Google’s algorithm while for us, AdWords advertisers, it is only a *concept*. (We know which factors it depends on but do not know how.) Now let’s say, that you and your only competitor both meet the minimum requirements set by the min. CPC bids and have the following data:

You// Bid: 9 QS: 7 Rank=9×7=63

Comp// Bid: 5 QS: 4 Rank=5×4=20

It is also widely believed that Google follows the rules of the so-called *second-price auction* and we’ll follow this model for now. In the above case, of course, you are the winner of the auction with your Rank=63, which means that your ad will show as first on the user’s search result page. Though your bid is 9, you will only be required to pay 3 because in that case your Rank is 3×7=21 that exceeds your competition’s Rank by an increment of 1. If suddenly your competitor changes his bid to 105, he will, of course, win the auction but will not be required to pay more than 16 because 16×4=64 which exceeds your Rank.

Some Considerations On Quality Score And First Page Bid

December 11th, 2008
Many newbies think they understand the concept behind Quality Score especially because every time they ask a question regarding the details they receive the same automated response from support. What they do not always understand is why the Quality Score incorporates such general issues that when they research their score no exact reason is given as to why it may be low. How are advertisers supposed to adjust their landing page or ad campaign if they are not sure what is prompting the negative rating?
The key concept of the whole Google empire is *relevance*. That’s what made Google the No 1 Search Engine in the world and that’s the cutting edge which continues to keep Google ahead of the competition. While in general *relevance* refers to the usefulness of information to a user, in terms of figures it is reflected by a keyword’s Quality Score which is algorithm based so that the AdWords system can calculate with it. Of course, any mathematical algorithm per se can only be an approximation e.g. as compared to the linguistic-psychological notion, conception or mental apprehension of what “relevance” means for us, humans. Even the best mathematical algorithm is nothing more than just an approximation. However, so as to achieve a good approximation, the Quality Score formula needs to be pretty complex and to include a lot of factors for consideration.

What is ‘Quality Score’ and how is it calculated?

Quality Score for Google and the Search Network
If you take a look at the above help page you’ll see that a really great number of factors are considered in the calculation. Some factors are within the scope of your responsibility while some are beyond. Accordingly, a low rating can be caused by any of them and only a very thorough investigation of your case can decide what the real reasons might be. Paradoxically, such an investigation cannot be algorithm based for the time being, it requires human intelligence in most cases.
Many people likewise wonder how it is possible to have a good average position of e.g. 4.5 but then not have a first page bid? If the average position is 4.5 doesn’t that qualify you to be on the first page?

The first page bid estimate only applies to search queries exactly matching your keyword, it may well not apply to phrase or broad match search terms. This translates you may accrue a good avg. position from phrase and/or broad match impressions while simultaneously the first page bid estimate indicates that your bid is too low for the first page. (In regard to an exact match impression, of course.)

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