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Google AdWords Top Ad Placement Formula Changes



2:43 pm on Aug 9, 2007 (gmt 0)

5+ Year Member

Has anyone seen this new massage? "In a few weeks, we'll improve how ads get promoted to top positions above Google search results, giving you greater control over the placement of your highest quality ads."

I am trying to determine whether their new Ad Placement Formula is another attempt to increase actual cpc's/increase revenue, or improve ad quality of their results?

Any thoughts?


1:37 pm on Aug 15, 2007 (gmt 0)

5+ Year Member

Rehan, that gap can't exist if you are already on top. It is impossible for it to exist. You can't being paying less than the threshold now and be on top. You actual cpc must be >= to threshold to be on top.

If the threshold is .30 and you are bidding .40, and the guy below you is bidding .2, under the current formula you wouldn't be on top anyway because you aren't paying .3, but rather .21.

If you are paying .21 as in your example, then you are on the side anyway. Under the new formula, you would move up to the top and then pay .3. If you don't want to be on top and paying .3, then just drop your bid to .29 and you will go right back to being on the side and paying .21.

The new min bid cant cost people who are already on top any more than it does now, because if you are on top now, you are already paying equal or more than the theshold. Otherwise you wouldn't be on top.


2:43 pm on Aug 15, 2007 (gmt 0)

5+ Year Member

But the new minimums will be higher than the old minimums, and that's what will create the gaps.


3:15 pm on Aug 15, 2007 (gmt 0)

5+ Year Member

They shouldn't be. As I said, I received an email from google stating that the thresholds will be the same.


3:33 pm on Aug 15, 2007 (gmt 0)

5+ Year Member

Sorry, I missed that in your earlier post. But to be honest, I don't believe them on that point. And an article at SearchEngineLand did say: "Google has followed up now to say that quality is weighted more heavily now and in the new system, the combined threshold of quality and CPC will be higher."


5:52 pm on Aug 15, 2007 (gmt 0)

5+ Year Member

I was told that there would be no change to quality score at all. This is straight from them. I don't know where that article got that info, but i asked them if quality was changing and they said no.


6:03 pm on Aug 15, 2007 (gmt 0)

10+ Year Member

Anyone seen any differences or changes yet?


6:38 pm on Aug 15, 2007 (gmt 0)

5+ Year Member

"quality is weighted more heavily now and in the new system

Quality - google should be more specific here!

It would be nice to have a matrix where I can see how I score on all quality variables. I want to know what I do right and where I need to improve or add something.

Too bad google will never let us see quality variables.


12:37 pm on Aug 16, 2007 (gmt 0)

10+ Year Member

Might be live. One keyword I have that was in avg. pos. 4.4 for months jumped to avg pos 2.4 last evening. Traffic jumped from an average of 200 clicks per day to over 600. Conversion rate plummeted by 2/3's. Lowered bid to try to get back over to the right side away from the lookers.


5:24 pm on Aug 16, 2007 (gmt 0)

5+ Year Member

I am having an extremely strong thursday traffic-wise, but it isn't converting very well at all. I'm actually in a slightly lower average position so I don't know if the new changes are live.

Surely they would tell us..


7:31 pm on Aug 18, 2007 (gmt 0)

5+ Year Member

Based on what Google has said and I think the consensus interpretation (guess) in this forum of how this will work (your ad will be eligible for a top spot if your max CPC meets the minimum threshold for that spot). I anticipate this will be good for my company AND good for Google.

All of our campaigns with very targeted keywords (the ones where I want to be in the top results) have average (actual) CPCs between .85-$1.25. Our overall avereage CPC for these campaigns is around $1.

It seems that for most of our keywords/ads in these campaigns the top placement "threshold" is around .50-.75. We have thousands of keywords that aren't hitting that threshold with their current actual CPCs, but have higher Max CPCs above those thresholds. Theoretically these should all earn a top listing under the new system and the actual CPCs would rise to the minimum threshold (approx. .50-.75).

If this is the case, we would have a tremendous amount of new clicks between .50-.75. For us, having top placement means 3-4x CTR relative to being to the right. Even though our CPC would go up for the affected terms, I anticipate that the additional volume of less expensive clicks will decrease our overall average CPC, and produce many more clicks. A very good thing.

Obviously this logic doesn't apply to all accounts. And some people don't want to be in the top positions because the decreased conversion rate and higher cost outweighs the value of the additional clicks.

I'm curious if anyone sees holes in this logic or if they think things would work the same for them.


11:51 pm on Aug 21, 2007 (gmt 0)

5+ Year Member

Ok, had a good chat with my Google rep today and he explained top placement a lot more clearly. As with everything Adwords-related the explanation was somewhat convoluted, but I'll do my best:

This change is apparently in response to advertisers complaining that they cannot achieve top placement on terms with lower CPC's. As clicks are cheap on some kw's advertisers are falling down the side of the page only and are not appearing *above* the organic results in one of the top spots, no matter what their bids. This is due to the fact that position is currently determined by actual CPC x Quality Score. In order for lower value terms to meet the minimum threshold for a top placement they are changing the calculation for T1-T2 spots to

MAX CPC x Quality Score

Our rep stated that your actual CPC shouldn't change ('shouldn't' being the key term here) and that Quality Score will not be weighted any differently than it has in the past. By using your Max CPC (typically higher than your actual CPC due to the Adwords Discounter pricing scheme) it should push ads into top placements where ads weren't meeting this minimum threshold previously.

While this all makes sense to me, the actual impact would still seem to be far greater. Our rep DID concede that Google cannot gauge how aggressively competitors may bid for these top placements, and that *theoretically* aggressive bidding could pull costs up all the way down the line and this would be something we'd have to monitor.

Though Google is apparently doing this in response to advertiser complaints it would seem that ultimately they will benefit substantially from these changes and the more aggressive bidding strategies that it opens on top placement.

When asked for some ideas on strategically managing the top placement algo change I was told it would be best to leave Max CPC's as they are for now and wait to see how bids and placements shift once it's rolled. He suggested two weeks would be optimum, but I certainly wouldn't sit idly by for 14 days if costs suddenly cranked up. He also suggested using the Position Preference tool to keep out of the T1-T2 placements as a means of controlling cost--but the reason we've avoided this tool in the past is that if your bid places you in a non-preferred position your ad will not be displayed AT ALL--which to me is potentially as dangerous as paying too much.

In any case, I do seem to understand the reasoning behind this and the calculation a bit better however I'm still pretty concerned about what this is going to do costs and management of our accounts overall.

Our rep did state the change was likely to roll within the next 2 weeks but that we would receive notification when it's live.


2:59 pm on Aug 23, 2007 (gmt 0)


The following 4 messages were cut out to new thread by engine. New thread at: google_adwords/3430360.htm [webmasterworld.com]
6:13 pm on Aug. 23, 2007 (utc +1)
This 72 message thread spans 3 pages: 72

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