Quality score dynamics can vary between different advertisers and PPC markets
In an earlier post, it shown that the relationship between CTR and position can vary for different advertisers, especially in the higher positions. These differences can potentially be explained by differences in brand traffic or are real differences in the click-through related to the dynamics of geographical PPC markets or the nature of the advertiser’s business. It is interesting to note that the CTR in the higher positions seem to be considerably better for advertisers in less mature online markets namely Australia and South Africa. We investigated this further by only focusing on non-brand specific keywords. To achieve this we included a factor indicating the brand or non-brand status of keywords in our model. Figure 1 compares the four advertisers on all non-brand keywords with a QS of 7. Even after non-brand differentiation we continue to observe substantially higher CTR in the top positions for Australian and South African advertisers compared to their UK & US counterparts used in the same model. This could be reflective of a lower level of competition relative to more developed markets resulting in a smaller number of competitive ads on a search results page, which in turn drives higher click-through in top positions. From this it is also clear that there are no fixed thresholds for determining quality score, rather it is determined on the relative CTR which varies across advertisers and potentially also geographical regions
Figure 1: CTR by position across four advertisers for all non-brand keywords with a quality score of 7.
Effects of Site Links on Adwords Campaigns
One of the recent new features on Google Adwords has been the ability to add Site links to certain campaigns. These campaigns are the ones that Google deems eligible to display additional links in the Adwords advert (similar to what they’ve been doing for quite a while on the organic search results (see fig. 1). On the SERPS, these additional organic links provide the user with a quick way to navigate to subsections of a website without having to go the homepage first, effectively saving the user the effort of an extra click.
Fig. 1: Site links on organic results
So at first sight, it seems like a good idea for Google to implement the same feature on Sponsored Links because it adds value and relevance to the user. But could there be other motives behind Google’s action?
The first thing to point out is that in reality, Google (currently) only seems to display site links on ads with a very high Adrank, which basically means ads linked to brand (or trademark) keywords. Now there has been a lively debate in the search marketing world over whether or not one should bid on one’s own trademark. After all, why would you spend money on clicks that would find you in the (free) organic results anyway? That is a valid argument but unfortunately it is also a bit naïve. As Fig. 2 shows, if you don’t bid on your brand, someone else eventually will and no matter how good your organic rankings, you will lose clients to your competitors. Cause the truth is, Google does not make any money from organic results and if possible they will try to put a sponsored link above the organic results. Your competitor doesn’t even have to bid on your brand, Adwords’ Expanded Broad Matching might automatically match your competitor’s brand to yours. (Example: Google will match the keyword ‘Avis’ ,broad, to a user searching for ‘Hertz’ – i.e. without Avis actively bidding on the Hertz keyword). Have a proper look at your search query reports and you would be surprised at how frequently this occurs.
Fig. 2: Competitors reducing the effect of organic site links
With the site links feature, Google provides a trademark owner the ability to appear more prominently on the SERPs but only if they choose to bid on their trademarked keywords. If we look at fig. 3 it is obvious that site links make a sponsored link appear more prominent for a trademark owner, even as the organic results are being pushed lower down the page.
Fig. 3
This post is based on qualitative observations on popular brand that does not belong (or is related) to our client portfolio but we have quantitative data to back up our theories (more on that in a next post). Unlike in the organic results, site links are not only intended to increase user relevance, but also to increase Google’s revenue by making the competition for prime SERPs advertising space more fierce. Organic (free) listings are being pushed lower down the page, forcing lower ranking websites to start paying for more prominent sponsored listings. For trademark owners site links provide a competitive advantage but at the bottom of the ladder we suspect that competition and click prices will increase.
In a next post, we’ll take a more detailed look at the impact of site links on a campaign’s performance based upon our experience of the last few months.
The relationship between quality score and click through-rate by position
The factors that affect quality score are hotly debated in many blogs and online forums. This motivated us to look for answers in our own data. From what we see in our own data, we have little doubt that click-through rate (CTR) is the most important factor in determining quality score (QS). When studying the relationship between QS and CTR it is important to take into account the effect of position in that analysis which is often over-looked in other analyses. Clicks2Customers, as a company, works with clients in a wide variety of industries and PPC markets around the world, which allowed us to make comparisons from the above dynamics across four clients from PPC markets in different geographical regions.
Logistic regression is a useful and appropriate statistical tool for studying the relationship between a binomial variable or rate, such as CTR and other factors (in our case quality score and position). We selected 4 clients representing a range of industries and geographical locations and modeled the observed CTR as a function QS and position. It is important to note that QS does not affect CTR (in fact causality happens conversely); however the regression model is a useful descriptive tool for highlighting the underlying relationship between the above factors.
In figure 1 we plotted the above relationship model for the four selected clients. Similar to the analysis referred to above, it was observed that quality scores of 8 and 9 are rare, therefore focus was on quality scores of 6, 7 and 10 where there is more data to model. Furthermore, we restricted our analysis to the top positions. The relationship between CTR and both QS and Position proved to be significant, though perhaps predictable. Clearly, a higher quality score implies a higher CTR at a given position. It is clear that the QS for a keyword is determined by the CTR relative to the position the keyword is at. For example, let us consider the data for the large US retailer in figure 1. Keywords in position 1 with a QS of 10 have a CTR of around 10%, while a QS of 10 corresponds to a CTR of around 5% in position 3. In case you are concerned about the use of CTR in determining QS related to position, you have no concerns as it seems as though Google has thought it through.
