ClickEquations Blog

Average Position occupies an important place in the mythology of paid search.

Many people covet or chase higher positions, and there are several possible reasons:

1. The assumption that ads in higher positions get more clicks simply because they’re in higher positions.
2. As we all know ‘higher is always better’ – especially when it costs more.
3. And of course, eye tracking studies prove, um, er, that people look higher more often.

(The empirical and anecdotal evidence I’ve seen suggests that the power of higher positions is much less than most people seem to imagine. In a future post I’ll go into this in great detail. This is not the real subject of this post.)

As a result, there is a lot of attention paid to the Average Position metric. And a LOT of money is spent on upward bid changes made because of the number this metric reports.

So how good is this number? Probably not very good.

Let’s take one tiny little case study to demonstrate.

The keyword is ‘cat treatment’. And on Saturday Jan 3rd it produced about 25 clicks in one of our accounts. The average position for the term (in broad match) was listed as 4.55. This is the average of all the positions in which it appeared during the 1543 impressions it enjoyed that day.

Now be honest, despite all you know about averages (including the fact that it could have appeared in position #1 760 times, and in position 8 783 times) when you see that 4.55 was the average it makes you think it spent the day bouncing between position 4 and position 5. Right?

But did it?

Let’s look at Google Analytics’ handy Keyword Position report for this keyword on that day. This shows the position the keyword was in when it earned its 25 clicks.

Yowza!  This keyword covered more ground than Paris Hilton in NYC on Saturday night. (I always wanted to see how much Google traffic a single Paris Hilton reference caused.)

It was in all three top positions, and everywhere on the right side from position 1 to position 6.

Keep in mind that this is a map of clicks, not impressions. So maybe the impressions did cluster closely around the 4.55 average and the few stray impressions way up to top 1 and down to position 6 just all got clicks. Or maybe the actual impression distribution was extremely broad and the 4.55 average, while it is true, is really not useful to us in terms of analyzing keyword performance or making bidding decisions.

At this point only two things are really clear;

1. We really need better information. If the search engines won’t provide the actual impression and click position distributions, and/or make the the position-at-time-of-click a macro that can be delivered in the target URL, they should at least provide the standard deviation for the average position so we have some idea of what it really means.
2. We should resist the urge to put much faith, or make too serious of decisions, based on the reported Average Position of any keyword.

After all the recent attention on Quality Score, I had planned to turn my attention to bidding, and write a series of posts on this important PPC topic.

But I think Ad-Rank deserves a little attention first.

Ad-Rank doesn’t get very much attention – certainly a lot less than bidding, and even a lot less than Quality Score. But Ad-Rank determines your position, and to some degree whether your ads display at all.

Ad-Rank Defined
According to Google, “Ads are positioned on search and content pages based on their Ad Rank. The ad with the highest Ad Rank appears in the first position, and so on down the page.”

Ad-Rank = CPC bid (Max CPC) × Quality Score

So we bid to gain Ad-Rank.

And we care about Quality Score because (among other things) it helps us achieve Ad-Rank.

Ad-Rank and Quality Score
Quality Score is important because it is weighted equally with your bid in determining where/if your ads run. The two factors are intertwined and the result is interdependent.

As the chart at right shows, you can get the same Ad-Rank with a lot lower bid by improving your quality score.

And as Quality Score gets more important, bidding gets less important. Not unimportant, but less important. It’s a zero-sum game.

Ad-Rank and Bidding
Yet while Quality Score is getting more visibility and mind-share than ever before, I’m not sure its ascent is being considered when thinking and acting on bidding.

Creating bidding strategies and running bidding rules or using bidding algorithms that don’t take QS into account at all, seems strange and seriously sub-optimal.

Traditionally bids are decided in an effort to impact position, and often the assumption is made that when an increased bid resulted in a higher ROAS or ROI, it was the change to the bid that was the direct cause – but I don’t know of a rule or algorithm in any PPC software today that either a) checks the actual position impact or b) checks to see if a Quality Score change was a mitigating factor.

It should of course now be noted that both bid and quality score increases have other impacts beyond their influence on Ad-Rank; Google has said that minimum bid and quality score thresholds are set for achieving Top (as opposed to Right Column) positioning, for example. So there are cases where it’s wise to increase your bid regardless of Quality Score issues.

Ad-Rank and You
The core tenant of High Resolution PPC is that we’ve all been lulled into an over-simplified view of how paid search works, both to accelerate our adoption, simplify our understanding, and keep us from complaining about really unfair or opaque aspects of the system that is taking our money.

Ad-Rank is an open secret. It’s well documented, easy to understand, extremely important, and almost never discussed. Time to change that.

We’re pleased to announce that Google Adwords Quality Score and First Page Bid metrics are now available in ClickEquations.

All clients and trial customers can see these metrics in the Keyword Report tab. They’re also available in Excel via ClickEquations Analyst.

After our recent Quality-Score-palooza it’s clear the impact of Quality Score is growing for Adwords Advertisers.

We’re glad to be the first Paid Search Platform to deliver this important information in our product.

High ‘First Page Bid’ Problems
As with many metrics, ClickEquations Analyst makes it possible to turn data into actionable information and save a lot of time.

Our new First Page Bid Report template does just that. It reports your Google keywords sorted in descending order of First Page Bid, showing the current bid and amount to increase your MaxCPC to hit the First Page Bid (if that’s what you want to do).

This makes it easy to spot new high First Page Bids that might occur if your Quality Score drops, if competitors move in, or Google makes algorithm changes.

Click Image To Enlarge

The current Quality Score of the keyword is shown too, so you can decide if you’d like to change the bid or work on the Quality Score.

As with all ClickEquations Analyst reports, you can update the data with a single click, or run the report for different accounts or clients.

The new report will be provided to ClickEquations customers without charge.

Want your own First Page Bid Report? Start a ClickEquations Trial today!