Big difference is CTR of two ads which isn't being reflected in CPC

[snoopy1122]

Hi guys,

I've got a query about how Google prices clicks, here is some data on two ads on the exact same keyword (both run at the same time), one ad mentions the price, one doesn't hence the big CTR difference,

Ad 1. (with price in ad copy)

CTR - Av. CPC
14.90% - $0.30

Ad 2. (without price in ad copy)

CTR - Av CPC
24.67% - $0.28

So the question is, given the CTR on ad 2 is 65% higher (24.67% versus 14.90%) than ad 1 why is CPC only 7% lower?

[LucidSW]

> Because I think the high CTR ad is subsidizing the lower CTR ad in terms of quality score.

There's no such thing as subsidizing in Adwords. Each ad is judged on its own merits and conditions at the time your ad runs. Ads don't live in a vacuum. Their ranking and costs will be determined by what is happening at the time. If a competitor's quality and/or bid changes, that will affect you as will a slew of other factors so you cannot make assumptions.

[snoopy1122]

> Because I think the high CTR ad is subsidizing the lower CTR ad in terms of quality score.

There's no such thing as subsidizing in Adwords. Each ad is judged on its own merits and conditions at the time your ad runs. Ads don't live in a vacuum. Their ranking and costs will be determined by what is happening at the time. If a competitor's quality and/or bid changes, that will affect you as will a slew of other factors so you cannot make assumptions.

You've said that several times ( or something close to it) but I've never come across anyone else arguing that quality scores are calculated on a per ad basis.

Personally I think it is done on the basis of keyword which would explain the CPC differences/changes in this thread, that also tallies with how quality scores are presented in adwords accounts.

[LucidSW]

Not to sound like a know-it-all or full of myself but, maybe others don't know what I do or just won't say it and keep it to themselves. I think it's the former.

Think about what you said. Sure, QS is shown to you at the keyword level. Actually I've wondered before why Google would do that. When Yahoo had their PPC before merging last year with Bing, they showed quality at the ad level, which makes more sense. A keyword has no quality by itself. It's not the one that determines if searchers will click your ad. Your ad determines how many times it will be clicked. It's what they see and react to, not the keyword.

[snoopy1122]

Not to sound like a know-it-all or full of myself but, maybe others don't know what I do or just won't say it and keep it to themselves. I think it's the former.

Think about what you said. Sure, QS is shown to you at the keyword level. Actually I've wondered before why Google would do that. When Yahoo had their PPC before merging last year with Bing, they showed quality at the ad level, which makes more sense. A keyword has no quality by itself. It's not the one that determines if searchers will click your ad. Your ad determines how many times it will be clicked. It's what they see and react to, not the keyword.

I'm not talking about what would be logical for Google to do, I'm talking about how things actually appear to work. I think it is probably a mistake to make an assumption based on how things should logically work.

Here is Google explanation of quality score and I think it is word for word right after seeing the data and how CPC has changed,

Quality Score for Google and the Search Network is a dynamic metric assigned to each of your keywords. It's calculated using a variety of factors and measures how relevant your keyword is to your ad group and to a user's search query. The higher a keyword's Quality Score, the lower its cost-per-clicks (CPCs) and the better its ad position.

[adwords.google.com...]

I've highlighted the bits I think are important above. It clearly talks about relevance to ad group (not ad) and is assigned to each keyword (not ad or combination of ad/keyword).

In a couple of days I'll pause the low CTR ad and turn back on the high CTR ad, what do you think will happen to the CPC of that higher CTR ad? Personally I think it will go far lower than it has ever been before.

I think what has come out of this is that the CPC stats provided by Google are not really reliable on a per ad basis when there is multiple ads. Each ad seems to effect the quality score and hence the displayed CPC of the other ads in the ad group.

[smallcompany]

In a couple of days I'll pause the low CTR ad and turn back on the high CTR ad, what do you think will happen to the CPC of that higher CTR ad? Personally I think it will go far lower than it has ever been before.

That's what I would hope for based on what you've gone through and saw so far.

You did not mention if there was any change in CTR of "more expensive" ad that is running in a single mode right now.

[LucidSW]

> I'm not talking about what would be logical for Google to do, I'm talking about how things actually appear to work.

What is logical and how things appear to work is one and the same. At least to me.

You got to learn how to read between the lines.

> Quality Score for Google and the Search Network is a dynamic metric assigned to each of your keywords.

No problem there, it's a statement of fact. They show QS at the keyword level.

> It's calculated using a variety of factors and measures how relevant your keyword is to your ad group

If you sell cat beds and you decide to use "dog collar" as a keyword and your ad mentions cat beds (logical since that what you are selling), what is not logical is using dog collar for a keyword. It's not relevant.

Therefore, there will be less interest in your ad driving down CTR for that keyword. The "cat bed" keyword on the other hand, for the same ad, will have a much better CTR. Its QS will be higher.

In other words, QS is calculated for that keyword AND ad. If you had another ad trying to sell dog collars in that group, the QS of both keywords would be dragged down because there's a 50/50 chance the ad is irrelevant to the keyword. It would be a great QS for both keywords if they were in their own groups with appropriate ad(s) for each.

Another way to look at it, a group contains ads AND keywords. They are inter-related. The conclusion is that each keyword will have a different QS for each ad. This affects their ranking and costs.

You can see that yourself. Unless your worst ad has a QS of 10 (and therefore that much better than competitors), you will see the QS drop after some time on each keyword by having only it being active. And assuming everything stays the same (competitors bids, quality and other things, a very big assumption), the CPC of that ad should be the same.

[snoopy1122]

Another way to look at it, a group contains ads AND keywords. They are inter-related. The conclusion is that each keyword will have a different QS for each ad. This affects their ranking and costs.

That is not what Google is saying, "how relevant your keyword is to your ad group ".

They clearly state they are looking at the ad group, nowhere do they say they assign a different quality score for each ad and base CPC on these individual quality scores. You can assume that they do, but it is just an assumption, and I think it is a wrong assumption.

What seems to be happening from what I can see of it is that each keyword has one quality score, based on all the ads, just like it shows in the stats.

I've changed things now so the only the high CTR ad is showing and the low CTR ad is off.

Will see in a few days what has happened to the CPC on that ad.

[snoopy1122]

That's what I would hope for based on what you've gone through and saw so far.

You did not mention if there was any change in CTR of "more expensive" ad that is running in a single mode right now.

There was no real CTR change for the ad (14.23% for the ad previously versus 14.66% after turning the other ad off), CPC went from 30 cents previously to 42 cents average over the length of that trial.

[LucidSW]

> That is not what Google is saying, "how relevant your keyword is to your ad group ".

And what does an ad group have? Ads.

You said it yourself: "each keyword has one quality score, based on all the ads".

[snoopy1122]

Lucid this is what you have been saying in this thread, a recap if you like

"The lower CTR ad MUST have a lower QS, whatever it is, and the cost calculated using it. Since it has a lower QS, your cost is higher. ".......

"If you stopped the higher CTR ad from showing, the CPC for the other ad would be the same."......

"Why expect the CPC to change for the same ad?

You should see a change in QS unless both ads have the same one.".......

"There's no such thing as subsidizing in Adwords. Each ad is judged on its own merits and conditions at the time your ad runs"......

"The conclusion is that each keyword will have a different QS for each ad.".....

All of the above statements are not correct, quality score is not calculated for each ad, it is an overall score per keyword, I think that is why the CPC's displayed are simply not reliable when running two ads for the same keyword, they are closer to an average for the ad group than a reliable indicator of cost.

The answer to this whole thread is the answer to this question of your's

"QS is shown to you at the keyword level. Actually I've wondered before why Google would do that."

That do that because that is how they calculate it, based on each keyword, not one quality score for each ad.