Hello everyone. I had a quick question about how Google uses CTR data for the positioning of an ad. Lets say you had an ad in the #1 position for a keyword and was getting a 10% CTR in that position, but then lowered your CPC bid a little bit thereby lowering your position down to #3. Would Google count the CTR that the ad had in the #1 position towards its rank for the #3 position? Or does Google only take into account an ads CTR for each particular position? I hope that makes sense.
Now that is patented technology you are after. If I am correct, and please correct me if I am wrong, no one except google knows for sure.
I think the above poster hit the nail on the head. Whatever happens, just keep working on that CTR and you'll eventually get top spot for muchos cheapness anyway. As for your question, I don't know the answer and suspect we will never find it out Cheers Stewart
My guess (and it is only that) would be that Google converts your clickthrough rate and position into a single figure for use in the QS calculation. My reasoning would be this: Your adverts don't always appear in the same position - Google moves them around. Google uses the Quality Score to calculate your position. So if there were multiple CTR inputs into the QS calculation depending on the position that your advert appeared in, Google couldn't work out where to put your advert. For example, if your advert worked better (relatively) in 4th compared to 3rd, then using the input from 4th position may give you a QS to appear 3rd, but the input from 3rd position would give you a lower QS, and only rank you 4th. Did that make any sense at all???
Yeah, the reason I asked is because I was thinking it might be a good bidding strategy to bid high right away to acquire a good CTR and QS and then gradually lower my mCPC until I found the ROI sweet spot. What do you guys think?
You should vary your bids to find your sweet spot, but personally I start at around 5th - 7th. Assuming that Google's adjustments based on your position are correct, then it doesn't make any difference to your Quality Score. There aren't many campaigns where the top positions are the most profitable for me, and often the budgets that I have to play with wouldn't stretch that far anyway...
Lets say that you are in the same position with the same mCPC bid for an extended period of time and you build a good CTR and QS for that position. Shouldn't you're actual CPC come down automatically as your CTR and QS go up?
If you have a good CTR over a period of time, then your QS will improve, and as a result, your advert will move up the search results (a very small improvement will reduce your CPC a little, but your CPC could actually increase as a result of an improved QS moving you up the rankings). Consider this example. Your advert is in 5th, with a bid of £0.50, and an actual cpc of £0.45. In order to appear in 4th, your bid would need to be £0.55. Over time, your QS improves, and you have to pay a little less to stay 5th - it drops to £0.44, £0.43, £0.42, £0.41. But your required bid to appear in 4th is also falling £0.54, £0.53, £0.52, £0.51. Suddenly, your bid of £0.50 gets you 4th place, and your actual cpc jumps from £0.41 for 5th place to £0.50 for 4th, so your cpc is higher than it's ever been! Your minimum bid quality score will probably also fall, but it's the Ranking Quality Score that determines your position...
That's a very good way of explaining that. Thanks for the help. What if you were using position preferences? Say you had a preference for position 4 only and you started out at an actual CPC of $.30, but as the CTR and QS improve wouldn't the actual CPC lower all by iteself without changing position at all because of the preference setting? There are so many different ways to approach Adwords it's boggling my mind
I never use position preferencing myself, because I can't see its purpose in most markets - there are probably a few where you don't want to appear at the top due to non-converting traffic, but not many. And why would you want to specify a maximum position? If your advert is profitable, why would you not want it to appear, rather than appearing in a low position? To be honest, I'm not exactly sure what would happen in your example - would your advert appear 4th, or not at all, if Google wanted to promote it to third? My guess would be not at all, since the cpc of the advert above is based on your adjusted maximum bid, and I can't see how that would work... I'd just forget about position preferencing - it makes life easier. And forget about the budget optimiser too. And the target CPA thing. That simplifies things more
You may be right. I haven't used preferences myself either, but it was an option I was thinking of tinkering with. I was thinking that if you knew that a higher position has a lower ROI because of a higher CPC and lower conversion rate that you may want to set a preference to keep your ad from going that high. I was just using the 4th position as an example in my last post. In reality you may want to set preferences at 4-10+ or 3-10+ or something along those lines. Sorry, if my thoughts seem to be all over the place. I'm fairly new to Adwords, and I'm one of those people that analyzes things too much.