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CTR adjusted for position
How clever is Google?
JonBoy

10+ Year Member



 
Msg#: 300 posted 7:56 pm on Feb 2, 2003 (gmt 0)

CTR affects Position - that's an invariable part of the equation. Position is given by ranking ads by Bid x CTR.

But also empirically everyone knows that Position effects CTR; the higher you rank the more clicks you get.

SO CTR effects Position, and Position effects CTR.

Question: Can this cause a virtous upwards spiral (or a vicious downwards circle)? Will ads that bid high get an high position, thereby getting high CTR, thereby being able to maintain their position without the high bids that originally got them there?

I hear people saying both yes and no.

Andrew Goodman in his (not that good) "21 ways to maximise your profits using Google Adwords select" report boldy and clearly says yes this is the case, and recommends bidding high at the beginning for this reason. I've seen quite a few posters here at WebmasterWorld say the same thing, including someone in a recent post which was what set me to typing away here.

BUT, in the Member's pages at SearchEngineWatch (Up Close with Google AdWords", Danny Sullivan quotes Google spokesperson David Krane back in the early days of adwords select who clearly says that Google is cleverer than this. To paraphrase Krane:
If on average position #1 gets 2% CTR and position #3 gets 1% CTR, then we know that a specific Ad in position #1 that gets 1.5% CTR is a worse ad (has a worse 'underlying CTR') than an ad in position #3 that gets 1% CTR. The #1 ad is doing worse than average for its position, whereas the #3 ad is doing better than average. Krane says this applies for both ranking and threshold purposes.

What do the sages here think? Has anyone else asked Google?

 

vitaplease

WebmasterWorld Senior Member vitaplease us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 300 posted 7:17 am on Feb 3, 2003 (gmt 0)

JonBoy,

sounds very possible that Google discounts positioning in their calculations.

I guess it would be quite easy to do a test and find out.

webdiversity

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 300 posted 12:06 pm on Feb 3, 2003 (gmt 0)

My understanding is that CTR affects position and price.

After all Google are trying to get people to spend money, it's one of the reasons they send high CTR ads up top, because they know they can extract a lot out of a campaign by doing so, and more so if the person advertising has set their daily limit high.

The positions go in rotation, but obviously there will be some factoring for those ads that get good CTR, but also for those that are prepared to pay for the priviledge of being there. Ultimately Google want everyone appearing on the first page to pay the same for the traffic, but in some cases it will be by someone paying 20p for 100 visitors, or someone paying 40p for 50 but they both end up spending 20. It's for this reason that we don't "junk" a campaign, because although each keyword has it's own CTR the overall success of your campaign will play a part in your positioning (sort of like a seeding process).

Our aim is always high CTR & low cost. CTR comes with writing good ad copy, low cost comes from having high CTR and occupying a position that someone else is paying twice as much for half as many.

Hope that make sense.

grnidone



 
Msg#: 300 posted 8:22 pm on Feb 3, 2003 (gmt 0)

because although each keyword has it's own CTR the overall success of your campaign will play a part in your positioning (sort of like a seeding process).

I have always wondered if that is the case.

What it seems like you are saying is it makes sense to have a few terms you know will have a low roi but will have a very high click through rate to help your very specific terms that may not get a many click throughs but will have a high roi.

So the campaign as a whole is evaluated more so than the terms by themselves...am I reading right?

webdiversity

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 300 posted 12:21 am on Feb 4, 2003 (gmt 0)

So the campaign as a whole is evaluated more so than the terms by themselves...am I reading right?

The impact of adding or removing a good/bad keyword will have an impact on the overall campaign yes.

It's why you should place your good keywords in isolation rather than leaving them in groups with poorly performing keywords or the "critical mass" keywords. I call it the panning for gold technique. Keep refining the keywords and the ad copy and the landing page and then you will strike gold as sure as the sun rises in the east, it may take a few attempts to get there, but you will.

Most of our campaigns have fewer than 6 keywords in them and no more than 2 ads. Average CPC will vary according to industries, but generally isn't less than 5% on high volume stuff. One client averages around 7% (70,000 clicks) on a million impressions at a CPC overall of 12p.

I think using the power poster facility will help some people to keep things tidier, but it's usually only if you get close to the maximum number of campaigns (30) that you need to start worrying about placing stuff in the same campaign but under different groups or with different landing pages.

Out of the box Adwords is designed to be easy to use and easy to take your money. It achieves both.

vitaplease

WebmasterWorld Senior Member vitaplease us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 300 posted 9:21 am on Feb 4, 2003 (gmt 0)

It's why you should place your good keywords in isolation rather than leaving them in groups with poorly performing keywords or the "critical mass" keywords

Webdiversity,

can I rename you Aduniversity?

Very good tip, never knew it was that way, I thought Google looked at CTR per keyword, thanks, some homework to do..

..but it's usually only if you get close to the maximum number of campaigns (30) that you need to start worrying about placing stuff in the same campaign but under different groups or with different landing pages.

What does a site do with a need of over 30 campaigns?

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