As you might know, click through rate (CTR) is arguably the most significant component of Quality Score, and ads in higher positions tend to earn better CTR than ads that display in lower positions. Google decided that to accurately calculate the Quality Scores, the “influence of ad position on CTR be taken into account and removed from the Quality Score.”
As a result, Google has now updated the portion of the Quality Score algorithm that accounted for ad position. It is their belief that this new adjustment will result in a more accurate Quality Score and ensure that ads compete fairly for position based on their quality and bid, while rewarding high-quality advertisers with better ad positions.
In the past, here at JumpFly, we have certainly seen the advantage of placing some clients’ new keywords in prominent positions to start, and then pull them down later based on performance. The advantage of the increased CTR from the higher initial positioning would work to their advantage down the road. From the sound of this latest update, this particular strategy may no longer be necessary. It will be interesting to see.
The second update going live today is an “improvement” in the way Google determines which ads show in the prominent yellow region directly above the search results. Google believes that given the prominence of these positions that it is especially important for ads to be high quality. Therefore, to appear above the search results, ads must meet a certain quality threshold.
You may have noticed that sometimes Google chooses not to display any ads in this position. Previously, if the ad with the highest Ad Rank did not meet the necessary quality threshold, they would not show any ads in these positions. With the new update, Google will now allow an ad that meets the quality threshold to actually jump over an ad in a higher position and be displayed in this prominent position. Again, quality plays a very important roll in being able to show in higher positions.
There is no doubt that these new algorithm changes by Google will cause some ads to experience a change in position, spend, and/or performance. Changes in Google’s ranking algorithms can affect even the most stable Google AdWords PPC account. Talk to a professional PPC Management Company today about how this recent update might affect your Google AdWords account.