ClickEquations Blog

Google is again modifying both the calculation and impact of their ‘Quality Score’ metric. As with most Google changes, the stated goal is improving search quality and user experience. The coincidental result is that Google will make more money.

There are two changes this time:

• Quality score will now be ‘position adjusted’ to take into account the location of the text-ad when the click-through occurs. This makes it ‘more accurate’. Makes me wonder why this didn’t happen a long time ago. This increases the value of extensive text-ad testing.
• Quality score can now cause an ad to move above another ad it would normally rank below IF this jump pushes the ad to the top of the page (rather than the right edge). (That’s a bad quick summary, read the Google announce for the details.)

You can read some worthwhile thoughts here and here and here or here or here.

Beyond these details what strikes me is how important quality score has become to paid search management and results.

Quality score drives bid requirements, quality score drives ad position, quality score drives impression share, and now quality score drives the chance to leapfrog your way to the top center of search result pages.

What Do We Know About Quality Score?

Although quality score plays a central role in how your money is spent and made in Google Adwords, it is officially a ‘secret formula’.

Like PageRank on the SEO side, Google makes only vague pronouncements while pundits and practitioners share theories and recommendation endlessly – but nobody can tell you definitively how to maximize your quality score.

It still isn’t even that easy to see your quality score, although it is getting easier. Google recently changed the way they display quality score – giving it an integer value – but it’s still under a ‘work for it’ pop-up in the Adwords interface. On the positive front, they have finally added quality score to the API (thank you!) so third-party tools can begin to make use of it.

But also like PageRank the scores tend to clump around certain values, and the distinctions between close numbers aren’t obvious.

Also, and this is just a hunch, I’d bet nearly anything Google doesn’t maintain or use the number as an integer. So two keywords from two different bidders that both show a QS of ’7′ might in fact be one with a 7.0001 and another with a 7.9998.

Four Conclusions

1. Google has an awesome business. They sell a product with secret specifications which are subject to change, and charge whatever they want without even telling anyone why or how. Nobody but the Mafia selling protection services to local merchants ever got away with this before.
2. Advertisers have to really play the ‘chase the quality score ghost’ game. Obsess about CTR’s and align as many of the other known factors as possible. Live with the fact that you’ll waste time trying to please the QS algorithm because there’s no published list for how to get into quality-score-heaven.
3. Advertisers should continue to clammor for more openness from Google as to what counts, how much, when, and how we’re charged accordingly. Neither #1 or #2 should be true.
4. I need to spend a lot more time thinking and writing about Quality Score. It’s a big deal.

A nice surprise from Google today, with the release of independent statistics for ad-group performance on the Google ‘Search Network’ – sites like AOL and Ask.com.

This is no doubt related to the Google-Yahoo deal and clammoring on this blog and elsewhere about the issues involved in integrating those reports. It’s great that reporting is now separate – next we need separate bidding options like they provide for the Content Network.

Interestingly, in one of our campaigns the search network bid is set to ‘auto’. I don’t know what that means. Are they going to auto-lower bids on search partners? Better than keeping them the same as bids on the Google network, but I’d still prefer advertiser control.

Two years ago we took a deep soul-searching look at paid search management practices and technology and decided both were inadequate.

Since then we’ve developed completely new management practices and technology, and it’s time to roll them both out publicly.

The management practices are built around a framework called ‘High Resolution PPC‘. It’s based on the idea that there are three distinct stages in the paid search process and specific steps and checks to sequentially create a well formed and effective campaign.

The technology is our ClickEquations platform, and was developed based on the idea that paid search is not as efficient and effective as it could be because the software tools we have had are inadequate in a number of very specific ways.

Background
We’ve been professionally managing paid search accounts for about five years. As the market and engine platforms have developed, the size and complexity of the accounts managed has grown. Working with both venture-backed startups and Fortune 100 companies we live with high expectations, competitive sensitivities, and serious budget and ROI oversight.

While it’s been exciting to go along for the ride as the market exploded and the technology evolved, anyone who’s lived deeply in paid search management over the past years knows the day-to-day hasn’t been exactly a picnic.

It’s a lot closer to a horror show.

The search engines are opaque (to put it kindly) on multiple layers. If you try to actually figure out what’s happening and why, you find key information is missing, available information is contradictory, and things aren’t exactly consistent. The Matching Algorithms used by the Search Engines and their rules change constantly.

The image of easy-management and easy-money that caught the media’s attention in the early years is ingrained in the imaginations of VPs of Marketing, Merchandising Managers, and even some Directors of eCommerce. Which means they have expectations and make requests that make the PPC Manager’s head spin – on a daily basis.

But most importantly, the amount of change that the industry has gone through over these short, jam-packed years has not been kept up with by either the ‘best practices’ or the ‘delivered technology’.

Paid search management is a young profession, one in which everyone has been learning on the job, sharing info via the web, and attending  those endless conferences, but past a very small number of truly universal tactics there is no agreed upon ‘right way’ to organize and manage paid search, in even the most general sense.

That’s no way to spend $9 Billion or $10 Billion.

And the software tools haven’t fared will in this rapid-change environment either. The engines built interfaces that primarily serve their own needs. Instead of thinking about how paid search managers actually should and do work, and building tools to facilitate this effort, the tools are organized around the needs of the engines and their algorithms.

This leaves search managers often facing screens with 5 open applications, each which has one piece of the data or one tool they want, none designed for the whole job. In this environment work flow requires on a lot of application and context switching, cutting and pasting, and mental contortions supported by the acceptance of silly limitations and obvious inaccuracies.

We think it’s time for both the process and technology of PPC to catch up with the market realities and demands.

Introducing High Resolution PPC & ClickEquations
In the next few posts I’ll formally introduce both High Resolution PPC and ClickEquations.

High Resolution PPC starts with three primary goals – targeting the right prospects, assigning an accurate value to each, and then satisfying them. It provides the context for using the available paid search controls and options with clear ways to measure results and priorize work.

ClickEquations was and is being developed with three primary goals as well – delivering clear and accurate data, helping to prioritize opportunities and tasks, and automating as many PPC process steps as possible.

We’re excited to share the results of the last few years of work, and are eager to get your feedback.

After the upcoming introductory posts, I’ll deep dive into the specific components of each over the coming weeks and months.

Most of the comments and analysis on the Google Quality Score updates, including my own, had mentioned the fact that the changes as described seemed to deal a death-blow to the old ‘good-ok-great’ Quality Score ranking system, but didn’t mention any replacement.

Brad Geddes apparently has the scoop that there will be ‘more transparency’ in the new system:

More visibility coming to Quality Score. The ‘OK, Great, and Poor’ will be replaced with a much more transparent system. At present, the easiest way to see many changes is to run a keyword report and sort by minimum bid high to low. With the new system, you will eventually be able to run a report and sort by Quality Score so that you can get a much better view of your keywords quality score.

Excellent. Hope they’re available in the API!

I always wonder if Frank Luntz invented the name Quality Score for Google.

It just sounds like the man behind ‘climate change’ (which was otherwise known as ‘global warming’) would call something a ‘quality score’ when it actually functions as ‘advertising tax’.

The Quality Score is Google’s way of handicapping your keywords/text-ads, in the sense of both ranking and limiting their appropriateness and therefore likelihood to run.

The idea, as Google portrays it, is that keyword/ad/landing-page combinations which are more appropriate for a given search get a higher score, and those less appropriate get a lower one. A higher score helps ads run more frequently and be positioned higher, while a lower quality score drives them to be run less frequently and positioned lower.

This of course all aligns with the idea of putting user experience of searchers first, as better ads (more relevant and ‘voted’ so by clicks) get higher quality scores.

And oh ya, the lower your quality score the more you have to pay for the chance or priviledge of running your ads at all.

This is where the prime directive gets sold out – ads with lower quality scores (to a point) can run and even rank highly if the advertiser is willing to pay enough.

In some cases quality scores were so low that a ‘Minimum Bid’ was put into place, which is the moral equivalent of saying that we have no available seating for dinner this evening, unless you can find it in your heart to slip the maitre de a Benjamin.

Beyond a certain point, however, keywords have been shut down entirely (and marked ‘inactive’ until the words, ads, landing pages, or bids were modified and re-evaluated.)

Quality score is calculated using yet-another-secret-google-algorithm, but we know it reflects the symmetry of language between the query, keyword, ad, and landing page, click-through-rate performance, load time of the landing page, and other elements.

Quality Score Revised

The way Quality Score is calculated and applied is being changed, which as just announced in a blog post entitled ‘Quality Score improvements’. Luntz would be proud.

Here’s what they say about the changes:

A more accurate Quality Score

Most importantly, we are replacing our static per-keyword Quality Scores with a system that will evaluate an ad’s quality each time it matches a search query. This way, AdWords will use the most accurate, specific, and up-to-date performance information when determining whether an ad should be displayed. Your ads will be more likely to show when they’re relevant and less likely to show when they’re not. This means that Google users are apt to see better ads while you, as an advertiser, should receive leads which are more highly qualified.

Keywords no longer marked ‘inactive for search’

The new per-query evaluation of Quality Score affects you in that keywords will no longer appear as ‘inactive for search’ in your account. Instead, all keywords will have the chance to show ads on Google web search and the search network (unless you’ve paused or deleted them). Keep in mind, however, that keywords previously marked ‘inactive for search’ are not likely to accrue a great deal of traffic following this change. This is because their combined per-query Quality Score and bid probably isn’t high enough to gain competitive placement.

‘First page bid’ will replace ‘minimum bid’

As a result of migrating to per-query Quality Score, we are no longer showing minimum bids in your account. Instead, we’re replacing minimum bids with a new, more meaningful metric: first page bids. First page bids are an estimate of the bid it would take for your ad to reach the first page of search results on Google web search. They’re based on the exact match version of the keyword, the ad’s Quality Score, and current advertiser competition on that keyword. Based on your feedback, we learned that knowing your minimum bid wasn’t always helpful in getting the ad placement you wanted, so we hope that first page bids will give you better guidance on how to achieve your advertising goals.

It’s worth mentioning that the impact of these changes will vary from advertiser to advertiser; some might see no changes to their ad serving, while others may see a noticeable difference. As always, we recommend optimizing ads to prevent them from receiving a low Quality Score.

First Impressions
The core idea of calculating Quality Score on the unique characteristics of each search instead of coming up with a single score per keyword is clearly a step in the right direction.

The dynamic nature of the new Quality Score, however, may make it a lot more challenging to know and manage the implications of your Quality Scores. They don’t say if they’ll still report Quality Score in the Adwords interface, of more importantly if they’ll make any QS rating available via the Adwords API.

By scoring independently in each situation, many keywords may suffer what will in effect be a lower impression share – getting shown far less often than their potential – but it’s not clear that this loss will be reported or visible.

We may see volume drops for certain keywords and not have any clear indication that the reason is a low Quality Score in certain situations. And it’s not clear that there will be any feedback as to which situations – certain queries, certain network sites, certain times of day or whatever – are delivering low QS which therefore will make it quite difficult to take corrective action.

Similarly, while not having keywords marked ‘Inactive for Search’ sounds positive, it may be worse to have words running at extremely low impression counts if there is not a clear indication that this is happening or that it’s due to frequently low Quality Scores in the situations where the keyword is being scored and considered.

The ‘First Page Bid’ metric at least makes the process of bribing the matre de more transparent. There’s nothing worse than either slipping someone a $20 only to have them scoff at you because a $100 was necessary, except of course passing off a $100 when $20 would have done.

Having the price of admission clearly marked will enable advertisers to make their own decisions as to value.

One issue it would be great to have Google clarify is the way Quality Score is calculated, and therefore ‘First Page Bid’ too, over the life and history of a keyword. In the past the ‘Minimum Bid’ was frequently insanely and unjustly high for new keywords added to a campaign, and would decrease rapidly as a click-history was established.

This required paying up to $10 per click for terms without any competitive bids and which would later settle at bid prices as low as $0.10. Hopefully these types of ‘hazing’ fees for new keywords won’t be included in the new system – but of course only time will tell.

The Roll-Out
The new Quality Score changes are being rolled out slowly, so you may not see these in your account immediately. There will be another post at the Adwords blog before final system-wide launch.

Do you have Quality Score concerns? Post a comment!

Update: More info on new Quality Score reporting.

There are many amazing things about Google. The one I’ve always been the most intrigued by is their ability to manage so many projects so well at such a large scale.

We can hardly imagine the number of things going on there – big diverse programs, developments, acquisitions, global scaling issues, etc. Yet relatively speaking things seem to get done and run amazingly smoothly.

This extends to their ability to throw a party.

I spent last evening walking the famous “Google Dance” event with friend and advisor Avinash Kaushik.

If Martha Stewart threw a tech party, this would be it. There was no detail, no extravagance, no space or idea left incomplete. There were gifts, and caricature artists, and music, and food (of all kinds & everywhere) and light shows, and photo-booths, and volleyball, and on and on. With an industry full of people streaming in by the bus load.

And yet like the Google homepage it was simple, friendly, and casual.

I can’t imagine the effort that went into making this event so complex and so seemingly effortless.

It was a great event, but it inspired even more awe about what these guys are doing and will continue to do during work hours.

I’ve suggested before that you should think of each search as a question.

Paid search ads are run in an attempt to raise your hand and deliver answers.

Today Google noted that they are monitoring over 1 trillion URLs, for use in finding the organic rankings which are delivered on search result pages. Wow.

But I was glad to see how they characterized the reason why they’re doing all this work:

As you can see, our distributed infrastructure allows applications to efficiently traverse a link graph with many trillions of connections, or quickly sort petabytes of data, just to prepare to answer the most important question: your next Google search.

The search engines have an inventory of ad space they want you to buy. They want you to pay the highest price possible, although they obviously have to work within market conditions and create (or even deliver) value.

They operate highly complex, extremely secretive ‘auctions’ based on rules and algorithms they choose not to share – in small part for competitive reasons but mostly because doing so would degrade their revenues and the relationships they have with advertisers.

And when they make a change to the rules or algorithms under which we all choose to advertise, they inform us via blogs and notices within their software, which not surprisingly puts the changes in the best possible light.

The same is true when they simply try to explain how the system works in an effort to educate. This is fair and reasonable, to a point.

As mentioned in the earlier post on this topic, their job is to make money, yours is to be an educated and wary consumer. But there is a point where self interest and ‘marketing bluster’ turns into white-washing and deception.

How Honest Should They Be?

I think the line between marketing hype and accuracy should in part be based on the complexity of the topic, the chance that the advertiser can know or will likely be advised that the positioning is rather one-sided, and the magnitude of the cost of the deception, among other variables.

Against these measures, I think all the engines regularly go way too far in surrounding important and costly issues in friendly sounding and rather inaccurate language.

Take for example the following excerpt from a recent Yahoo blog post about what to do (and even think) when your ads aren’t displaying all the time:

If your ads are not being displayed as often as you like, it may be time to take a look at how your spending limits and bids are set. To help get your ads displayed more often, consider increasing your spending limits. If that’s not possible, there are ways to work within your means and still compete with the deep-pocket competition.

While you may not have the advertising budget to maintain round-the-clock ads in top positions, there are ways to help get your ads in front of searcher eyes more often at lower cost. First, go for specifics. Consider selecting keywords that have lower minimum bids and are targeted for a specific service or product that a searcher may specifically type in. Not only are these “tail” terms likely to be more affordable than general terms, they are less liable to blow your budget.

If you translate that happy sounding stuff into english, you find that Yahoo suggests spending more money and buying more of their unused inventory.

They do this while perpetuating the falicies that one searcher is as good as the next (regardless of the keyword they match let alone the query they type) and that higher positions are inherently better than lower ones. And they get a bonus 10 point for gratuitous use of the pop-culture phrase ‘tail terms’.

They also fail to discuss the many other ways you could likely work on improving the situation – the ones that don’t make them any more money.

Yahoo Fisked

Let’s take it line by line:

If your ads are not being displayed as often as you like, it may be time to take a look at how your spending limits and bids are set.

We start by subtly setting up what is probably a false premise, although they do it cleanly by disclaiming that ‘it may be time’.

If your ads are not displaying as often as you’d like, the first things you’d want to consider are the keyword selection itself and the associated match types, and then the reported (or likely) ‘quality index’ in terms of alignment between the keywords, ad-copy, and landing page terminology and content.

If a bike has a flat tire and rusted chain, pushing harder may work but it isn’t the best initial advice. Paying more is usually just pushing harder on a system where something is out of whack.

To help get your ads displayed more often, consider increasing your spending limits.

Again, the first suggestion is to push harder. There’s no margin in putting air in the tires.

If that’s not possible, there are ways to work within your means and still compete with the deep-pocket competition.

OK, a positive statement. You can find a way to make your business work. We’re here to help. Great.

While you may not have the advertising budget to maintain round-the-clock ads in top positions, there are ways to help get your ads in front of searcher eyes more often at lower cost.

Uh Oh. A quick drop into bad-assumption hell. Four things you may not neccessarily want to do – maintain round-the-clock ads, run them in ‘top-positions’, get your ads in front of more ‘eyes’, and even get a ‘lower cost’. It’s a nice sounding sentence, but based entirely on an over-simplified characature of how PPC works.

What we want, in the real world, is to get conversions at the highest ROI. From there we work backwards and get the best clicks (ie from the most qualified users as defined by the topic of their query and/or the history of similar conversions) at the lowest price. To do this we want the right people to see our ads, however many of them there are. Eyes are generically not valuable, cost is relative to return, and time of day and position are not ‘more is better’ things regardless of the common perception.

First, go for specifics. Consider selecting keywords that have lower minimum bids and are targeted for a specific service or product that a searcher may specifically type in.

The first piece of good advice thus far, ironically, is to ‘go for specifics’. To bad it’s passed off in such a general and ultimately misleading way. We want keywords that attract queries which are both highly relevant to our subject and if possible demonstrate intent towards serious prospects.

While we all want to have lower costs, making lower bids the (or only) criteria is silly. We want the lowest possible bids for keywords which generate conversions. If you really want lower minimum bids, leave Yahoo and go bid on a 3rd-tier engine. That’s not good advice because the traffic is of such substantially lower quality that it more than offsets the lower bid – obviously.

The idea of ‘going for specifics’ is excellent advice if it’s clear that it means increasing the targeting of your keywords (or more specifically narrowing the range of the queries you attract) and doing a better job of valuing specific keywords via the use of negatives, match types, and bids. I’m sure that’s what they meant.

Not only are these “tail” terms likely to be more affordable than general terms, they are less liable to blow your budget.

The tail wags the dog here, again. Buy cheaper words so you can stay in the game longer. Shouldn’t the idea of conversions, revenue, and return get a mention?

Are we playing at the $5 table in Vegas or Atlantic City because we know we’re going home broke but we really want to be able to play all weekend? Sure sounds like it.

Let Me Try It

This review may sounds a bit harsh and over-reactive. Yahoo is just trying to give some friendly advice, and taken with a less critical eye it’s just another generic piece of questionable advice.

But this isn’t advice from just another search blogger or ‘guru’. This is from a company getting thousands or tens of thousands of dollars from people who will take this advice to heart and move forward making bad decisions as a result.

Consider this alternative:

If your ads are not being displayed as often as you like, make sure you’re bidding on keywords directly relevant to your offer, and that your text ads and landing pages are directly aligned in both word usage and clearly focused context for those words. If they are, it may be time to take a look at how your spending limits and bids are set.

Your goal should be to see your ads displayed as often as possible to searchers who are likely to purchase your goods or services. With proper setup and management you should be able to generate a good number of sales within your means – even when competing with the deep-pocket competition.

Make sure that you’ve chosen as many different highly relevant keywords as possible – the more specific the better. Very general terms and category names usually have a lot of competitive bidders and therefore see higher per-click costs. If you want your ads to appear for these keywords it may be necessary to both raise bids and increase budgets – although a better Quality Index (a big part of which is higher click through rates that come from well written creative) can help minimize those.

More focused words and phrases are often overlooked by many bidders, despite the fact that advertisers often see higher conversion rates from more detailed keywords. So you may experience lower costs and higher revenues!

An approach like this gives more balanced information to search advertisers, helping them to become successful and therefore keep advertising. Which produces better long term results for Yahoo as well as their clients.

Sure it takes a little longer to think through and then write with more meat and less marketing fluff. And it both provides and expects more from readers – they may not undertand all the terms and concepts and will therefore have to seek out explanations.

But I think advertisers deserve and would appreciate the additional effort and information. And it would be great to not have to be so suspect of everything the engines say and do.

How do you think about the search engines? For most of us there is no easy answer, since we all have a number of different relationships with them.

• As internet users we’re all slighly in awe of their technology and thankful for the free service they provide.
• As business people we’re either stunned at their growth, power, and execution (for Google) or lack thereof (for Yahoo and MSN).
• And as marketers we appreciate the new channel they’ve developed and the new tools and information they provide as we all learn to take advantage of it.

But as search marketers, we need to keep a much more objective view. These are vendors who are trying to sell us things. They want our money. They want  to increase their profits.

They Want Your Money, That’s Their Job.
This doesn’t make them bad. That’s their job. But ours is to be skeptical, responsible, keep as much of our money as possible while getting the highest possible return from that we do spend.

When they develop and release new technology, they very well be genuinely trying to improve their service to end users, or to us advertisers. But they may also be working to cut their costs or increase their profits.

The same is true when they change the algorithms that control when your ads run, how they’re ranked, or how much you’re charged. They might be fixing or improving, or they might be just taking a larger slice of the pie for themselves. Often it’s a little bit of both.

Over the past few years there have been dozens of changes to the PPC game that have made it more complex, more opaque (as Kevin Lee reiterates in a very interesting ClickZ article this week), and more profitable for them.

This means they’ve made it harder and more expensive for you.

That Nice Man Gave Me A T-Shirt
But search marketers, like everyone else, seem to love to love Google, and to a lessor extent Yahoo. They’re great companies, impressive success stories, filled with nice people, they give away nice chotchkes and throw great parties at conferences. It’s hard to not think of them as friends, corporately or personally.

But from a business perspective, they’re vendors who want your money. Powerful vendors who work with levels of secrecy you’d accept from none of your other vendors. (Have any other vendors who don’t explain to you how much they charge you for each item you buy or tell you what you’ll pay the next time you buy it?)

In many ways I think they’ve got us all snowed. Congratulations to their PR and communications depts.

I point this out because their communications seem to paint every move as benevolent. Most discussion of the engines positions them as independant brokers simply working to intermediate between advertisers and end users.

Their motives aren’t questions nearly enough. There is not nearly enough push back to the increasingly aggressive and advertiser unfriendly changes they’re making month after month.

With Friends Like These
The most troubling of all their actions is when they mix education with positioning. That is to say, when they try to tell advertisers how to live with the latest bad-for-advertisers change to the rules or algorithms, and put a happy face on it when they do it.

Next Post I’ll dissect a recent Yahoo blog post that does just that.