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How Google Ranks Ads: A Peek into the Black Box
Andrew Goodman, Principal, Page Zero Media, Toronto, CanadaDec 20, 2006 - 5:31:00 PM
The way that top search engines assess and rank sponsored listings has begun to resemble their approach to measuring the quality and relevancy of pages for the unpaid, "organic" search listings. Advertisers are now being judged on "quality" criteria that aren't fully disclosed.
An Historical Perspective
How did we get here? Let's go back a little closer to the beginning.
In February 2002, Google did something remarkable. They began pricing their text ads next to search results (also known as sponsored links) using a formula, not a straight auction. Google's main competitor at the time, Overture (now Yahoo Search Marketing), operated an auction that placed these types of listings higher on the page strictly based on the bid amount, on a cost-per-click basis. (In fact, Overture showed searchers exactly how much the advertisers were bidding, a level of disclosure which was later dropped.)
Google's new formula folded relevancy into the mix, as measured by how often users clicked on the ads. The formula was: AdRank Score equals Max Bid multiplied by click-through rate. By improving ad relevancy, advertisers were able to rise higher on the page without necessarily increasing their bids. A side effect was that this formula helped Google maximize its revenues from the auction. It also increased user satisfaction with the ad listings.
There were a couple of additional rules intended to maintain ad relevancy. Roughly speaking, keywords in your AdWords account had to maintain an historical click-through rate of at least 0.5%, or they'd be disabled. Later, Google experimented with a variety of cumbersome methods of keeping irrelevant ads out of the auction, such as putting keywords "in trial" or warning you that some were "at risk" of being disabled.
Enter Quality Scores
In August, 2005 (after earlier undisclosed experiments), Google switched gears again. They dropped the old ad ranking formula in favor of (undisclosed) "quality scores" assigned to each keyword in your account. Although they assured us that this was predominantly based on Max Bid and click-through rate as before, other factors, like "keyword relevancy" and "other relevancy factors" (huh?) were incorporated.
The quality score assigned to your keyword, relative to those of other contending advertisers in the auction for a given search query, determines where your ad shows up on the page, as before. Just as important, a low quality score will make it more difficult to keep your keyword active in the system. Google assigns high minimum bids to keywords with low quality scores. A normal minimum bid is about $.05. But low quality scores will generate minimum bids of .30, $1.00, $5.00, you name it. You can get out of the doghouse, but it'll cost you.
Landing Page and Site Quality
In December 2005 and thereafter, Google began refining a controversial new component of the formula: the assessment of landing page and site quality. Some advertisers – those who have been running misleading campaigns that search engine users dislike -- have been punished disproportionately, and have complained of a "Google Slap."
Advertisers needn't obsess about "optimizing" landing pages to the nth degree as a means of improving their ad rankings. Google's landing page quality initiative is mostly intended to target "no-no's" -- pages and sites which offer users a particularly poor experience, and businesses that make deceptive offers and offer insufficient disclosure of business information. Certain classes of complaint are common: pop-ups and misleading navigation; "email address squeeze page" offers that promise much but disclose little to the consumer; and "arbitrage plays" that take consumers from a Google AdWords sponsored link to a page dominated by more sponsored links, rather than directly to an offer or content.
Google uses a combination of human and automated means of catching offensive sites and pages. Advertisers must make their landing pages accessible to Google's AdsBot crawler, or face low quality scores.
Most advertisers haven't been unduly affected by the so-called Google Slap. But as Yahoo also intends to institute a Quality Index into its own ad ranking methods as part of its new Panama platform, one thing is clear: quality-based bidding is here to stay. Advertisers will need to focus a little more on a few core skills: improving the relevancy of their ads; adding negative keywords to campaigns including broad matches in order to increase click-through rates; and updating their sites and landing pages to be relevant and free of user experience no-no's. In cases where you're doing everything right and you seem to be a victim of "false positives" (getting caught in the net intended to catch less scrupulous advertisers), it might make sense to contact your customer service representative for editorial advice or help.
More broadly, advertisers should understand the general principles of targeting, and the consumer's wish to follow the "scent" of relevant offers from the query stage right through to purchase. The more your campaign feels like it's bothering people, the search engines will reason, the more you ought to pay for the privilege.
If you'd conclude from this that long-term branding and awareness-raising campaigns cannot live on search alone, you'd get no argument from me.
Useful Resources:
- Google's Landing Page and Site Quality Guidelines: https://adwords.google.com/select/siteguidelines.html
- Bryan Eisenberg, et al., Waiting for Your Cat to Bark (Nelson Business, 2006), ISBN 0785218971
Andrew Goodman is founder and principal of Toronto-based Page Zero Media, a marketing agency which focuses on maximizing clients' results from paid search campaigns from the planning stage, through the first click, right through to purchase or lead.
