Have you ever known something without completely understanding it? Or, that you understood it, perhaps, but it never really clicked inside your head. And then when it clicks, you think, ‘oh… I must be stupid’. Well, that happened to me today.
It was something to do with the top three spots on Google. Or, as I have collectively dubbed them, the funny coloured box. Or, as Google accurately (boringly) refers to them, the ads that appear above the search results.
This may have been completely obvious to everyone else. But it was such an interesting moment in my head, that I thought I would document it anyway. At the almost certain risk of declaring my stupidity to the world.
This epiphany (of sorts) sprung from a question that I have asked myself on numerous occassions but never bothered to examine properly. Never bothered to answer it definitely. Just one of those things you accept. Like a caveman would the stars. But nothing so significant. Or dramatic.
The Question:
Here was the question I posed myself: Why is it, that sometimes, only one ad appears above the search results in the funny-coloured box. Why does this happen, even when there are more ads down the right hand side, that could surely move up to fill those top 3 positions?
Here is the question in visual form:
Yeah. Why does that happen?
The Answer:
Because Google added some parameters to the algorithm that determines ad position. Parameters that must be fulfilled before an ad can be promoted to take its spot in the hallowed funny-coloured box. I never knew that!
The Explanation:
The full explanation requires an understanding of how ad rank works. The formula for ad rank looks like this:
Cost Per Click Bid X Quality Score = Ad Rank.
Let’s examine that further. An ad’s position (or Ad Rank) on the Search Network is determined by the matched keyword’s cost per click (CPC) bid times its Quality Score (QS). A keyword’s Quality Score for ad position is based on its Click Through Rate (CTR), the relevance of the ad to the search query, the relevant of the keyword to the search query that triggered it, historical performance of that keyword in your account and on Google in general, and other relevancy factors (Google’s way of saying, “mwahahaha”).
Now I knew all that. And assumed it applied to all of the ads, all of the time. When I was presented with only one ad in the funny-coloured box, I essentially did a mental shrug and dismissed it. However, it so obviously doesn’t fit within that algoritm of ad positions. Yep, I’m pretty dumb.
The difference? For ad placement in the top positions above the Google search results, the same formula is used, based on Quality Score and CPC Bid. However, only ads that exceed a certain Quality Score and CPC Bid threshold are eligible to appear in the funny-coloured box. The CPC threshold is determined by the matched keyword’s Quality Score; the higher the Quality Score, the lower the CPC threshold. In other words, you can buy your way there. But if your Quality Score is horrid, it could potentially be a big leap up from the right-hand positions.
Google has provided no details on the actual mathematical formula used to set this threshold. It’s Google… what the hell did you expect? Jokes. Jokes. Love you, Google.
However, the reasoning behind it is sound. Google advises this was done to ensure that quality plays an even more important role in the ads displayed above their previous natural search results. It makes sense!
It’s such a simple little thing and means hardly anything in the grand scheme of optimising AdWords accounts. I mean, it’s not like you weren’t going to strive for better Quality Scores and cheaper ads without this tidbit of information anyway.
At least I learnt something new today…