Adwords Announcement: Improvement to Ads Quality

I received the following email from Adwords this morning. Please discuss, as I'm still not wide awake so only drifted through the update very quickly:


We're always working on improvements that will help us show the most relevant ads to our searchers, and we're excited to tell you that we'll soon introduce two changes designed to enhance how we calculate Quality Score and rank ads. The first change helps better evaluate the precise quality of your ad - regardless of its position on the page. The second change improves how we promote ads to positions above the search results. Let's take a look at both of these changes in more detail.

More precise Quality Score calculation
Clickthrough rate (CTR) is the most significant component of Quality Score because it directly indicates which ads are most relevant to our searchers. As you probably have observed, ads in high positions typically earn better CTR than those in low positions, because ads in high positions are more visible to searchers. To calculate the most accurate Quality Scores, it's important that the influence of ad position on CTR be taken into account and removed from the Quality Score.

In the coming days, we'll update the portion of the Quality Score algorithm that accounts for ad position. This will result in more accurate Quality Scores, ensure that ads compete fairly for position based on their quality and bid, and enable Google to show the most relevant ads to searchers by rewarding high-quality advertisers with better ad positions.

Higher quality ads above the search results
We're also improving the way we determine which ads show in the yellow region above the search results. These positions are particularly valuable to advertisers because they are prominently positioned on the page. Given their prominence, it's especially important that these ads be high quality; we therefore place extra emphasis on quality when determining which ads to show in this location.

To appear above the search results, ads must meet a certain quality threshold. In the past, if the ad with the highest Ad Rank did not meet the quality threshold, we may not have shown any ads above the search results. With this update, we'll allow an ad that meets the quality threshold to appear above the search results even if it has to jump over other ads to do so. For instance, suppose the ad in position 1 on the right side of the page doesn't have a high enough Quality Score to appear above the search results, but the ad in position 2 does. It's now possible for the number 2 ad to jump over the number 1 ad and appear above the search results. This change ensures that quality plays an even more important role in determining the ads that show in those prominent positions.

Keep in mind that these enhancements may cause changes to your ad position, spend, and performance. We're launching these updates soon so that you'll have enough time to review your accounts and prepare for your holiday season advertising. While we don't believe that any immediate changes are needed on your part, we encourage you, as always, to watch your key metrics and to make adjustments as appropriate.

We'll post again once these changes are live.

 

The first part sounds straightforward enough - they are updating their assumptions about what clickthrough rate you 'should' get in each position. I've had suspicions that adverts in lower positions are expected to get higher clickthrough rates than they actually do as a rule, so this should be a good thing?

The second part's more complicated. I understand that an advert could appear above the natural results, even if an advert that should appear above it doesn't, due to the Quality Score threshold.
But what happens to the cost per click. Does the advert that should appear top still have to outbid the advert that got promoted above it? If so, they are being penalised unfairly, I think. Alternatively, does the advert now only pay enough to appear above the advert that is now below it?

Hopefully, Google will clarify this...

 

Don't they do that anyway when CTR is normalized for position? Presumably they are refining that process and perhaps giving CTR a greater influence in the ranking algorithm

That aside, in both cases, it sounds like they are going to reduce the influence of the bid in calculating the positioning of the ad - good news for those of us with lots of 9s and 10s!

 

You will never know the exact method of calculating the quality score. That is a secret that even ex-employees cannot reveal without being sued by Google (it is in their employment agreements). You know already what goes into determining a quality score, all you can do is try to confrom to them as best you can.