ClickEquations Blog

Why do some AdWords ads appear on top of the organic listing and not in the right-hand column?

So Google can make more money, of course.

How do you get your ads to appear on ‘top’? There is no guaranteed path, but here are the relevant facts.

1. There will not be top slots available for all keywords. Google decides which searches will display any top-listed ads. They also decide if there are 1, 2, or 3 slots available.
2. There is a minimum bid to get positioned on top. Of course it’s a secret. If you’re already at #1 on the right and want to force your way to the top, raise your bid – it may or may not work, Google will almost certainly get more money in either case, but at least you’ll find out.
3. If your bid is above the minimum required to be on top, but your ad rank (bid x quality score) your ad may ‘jump over’ other advertisers who had a higher ad rank but a lower bid. This jump will put your ad on top, while your competitors stay on the right.

There are significantly higher click-through rates seen by ads that make it to the top, above even those ranked #1 on the right. I’ve heard estimates as high as 3x-4x.

The first truth from our new ‘21 Secret Truths of High-Resolution PPC’ was leaked, on this very blog, in our New Years Day post.

That post, entitled ‘They’re Searching For Answers’ introduced the idea that every search is a question, and text-ads are an attempt to answer those questions.

(We’ll wait while you go read it.)

This is not just our first ‘Secret Truth’ but a kind of a guiding principle behind the entire collection.

It’s important because it turns the focus around and clarifies the fact that users (prospects, customers, searchers, whatever you want to call them) are driving this process. It’s demand driven marketing. They’re in control. We’re here to satisfy them, and only get to stay in the game as long as they think we are or at least might satisfy them. Our role is to anticipate and fulfill their needs. We can’t manipulate them.

In addition to getting us out of a dominant mindset and into a subservient one, this idea is also critical because so much of how we organize, target, option, value, and otherwise manage our campaigns – as we’ll explain in the 20 Truths to follow – can be guided and judged by how well it helps us to better align our answers to their questions.

Nearly every choice you make in the configuration of your paid search campaigns either clarifies or distorts alignment.

• If you put a lot of keywords into an ad group, they attract a wide range of search queries and the alignment between any one query and the provided ad copy can suffer.
• Organize ad groups into campaigns in the wrong way, and the campaign-level numbers you see won’t tell you if things are aligned or not.
• Use a lot of broad match, alignment will range from perfect to extremely remote.
• Bid too low, and your competitors will out rank you (and sometimes show when you don’t) for the most aligned queries.
• Fail to geo-target adequately and you’ll align with the right queries but from the wrong people – same bad result.

So it helps to have this simple prime directive : target the questions you want to answer, and then answer them directly.

When this rule isn’t followed, a lot of innocent keywords, text-ads, and landing pages pay the price.

Consider one example:

• If the keyword is ’snow plow’ running on broad match
• The search queries include many things like ‘who can plow the snow off my driveway in Allentown PA’
• The text ad copy says ‘J-Deere 150″ Plow Extensions for Your F-150″.

In this case the keyword is likely to have a terrible CTR and conversion rate. It might be judged a ‘bad keyword’ and paused or deleted.

But in-fact the problem is that we’re delivering answers that have nothing to do with the questions being targeted. What’s needed is more keyword negatives and probably a lot of keyword expansion (to grab all the words and phrases that broad match is eligible to capture in ways that we can organize and answer them far more accurately).

Poor results here are predictable. And the reason for them can clearly can be seen in the results. But many times we look at the metrics for our keywords, text-ads, and landing pages (not to mention campaigns and ad groups) and draw conclusions without taking the time to see if we were answering the question they were asking.

Paid search advertising is the process of paying to answer questions. It only sense to work very hard to answer them well.

Understanding that this is what we’re doing is the first step.

What do you think?

This blog post is a companion to our free ebook ‘21 Secret Truths of High-Resolution PPC’.

It will be available for download later this month.

Reserve Your Copy Today

21 Secret Truths of High-Resolution PPC is our soon-to-be released ebook that shares what we think are the guiding principles for efficient and effective paid search management.

The idea for ‘High-Resolution PPC’ was hatched two or three years ago, as we looked deeper and deeper into how paid search really worked, and how large and complex paid search campaigns should be managed.

At the time we were managing accounts for a range of very large advertisers. Like anyone else we were striving to produce better results. But we were constantly frustrated by the limits of the data we could access, the inflexibility of the tools at our disposal, and the general level of transparency we felt the engines were providing into how the choices we made impacted the behavior and performance of our campaigns.

To address the first two issues, we accepted a venture capital investment, built an in-house product development team, and created ClickEquations. To address the last item, we began development of what was originally called ‘the methodology’.

The methodology was an effort to document the facts about how search worked and the process that one should follow to build and manage accounts. It started as a collection of ideas, beliefs, and habits we assumed were best practices. Over time we pulled back to look at the shape and sequence of the overall process, and dove in to examine individual elements, options, and interactions.

Eventually a framework emerged. Groups of items and options that fit together. Stages of the process that had natural breaks and measurable outcomes. The framework provided a structure around which all the steps, options, measurements, goals, interactions, and components of paid search management could be organized.

It got the name ‘High-Resolution PPC’ because one recurring theme of the exercise was the fact that everything we knew before was right, but far too over-simplified.

• Keywords mattered, but only in the way they attracted search queries, which had a lot to do with how and when match types were assigned.
• Bids mattered, but only due to their influence on ad rank which itself influenced CPC.
• CTR mattered, but it (and nearly everything else) was reported as an average and if you accepted the number without really thinking hard about how it was calculated you were likely to be misled. The examples continued endlessly.
• The list went on and one. Most of what we knew or thought was in fact true, but there was always a but. And if you know about the ‘but’ you would take different action than if you didn’t.

It seemed like the conventional wisdom was paid search at 300-dpi, but with a little effort and thought we could understand and act at 2400-dpi.

More accurate info. More precise actions. Better results. Higher resolution.

For the last 18-months or so we’ve continued to refine the High-Resolution PPC framework, and research and document the information on which it’s based. We’ve talked a bit about the process of managing paid search in this way (the original outline is presented here), and some of the posts on this blog over the past year have discussed elements of paid search in the terms we see and use them within High-Res.

But our new ebook is the first complete summary of what we’ve learned, at least in terms of the facts and philosophies we’ve come to consider the structural base of High-Resolution PPC.

To keep the book snappy, and a reasonable length, it’s written in a concise style – with just 1 page per item. Over the next month, this blog will feature a behind-the-scenes tour of the 21 truths, with expositions, examples, and with your help some conversations.

Sign up below to get your copy. And if you’ll be at SMX, SES, or OMMA in March, please visit the ClickEquations booth for a full color printed copy.

Get a free copy of ‘21 Secret Truths of High-Resolution PPC’.

The ebook will be available for download later this month.

Request Your Copy Today

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In advance of our new ebook, and some other projects just behind it, I built a new website focused on High-Resolution PPC.

To support that site, I created a new AdWords account and added two small ad groups with a total of 9 keywords and two text ads. Every keyword is a brand or navigational variation of the term ‘high-resolution ppc’.

That phrase is in the domain name and all over the home page, which serves as landing page for both ads.

This is a story of how quality score evolves.

At First, They Don’t Trust You

This is a brand new account. It has no CTR history. The ads are new. There is no visible URL history. The website has existed, and been indexed in Google, for a few months but with just a few pages and virtually no traffic.

The keyword ‘high resolution ppc’ does have a CTR history, because in our Clickequations.com AdWords account we buy the broad match version and aim ads at a page for ebook sign-ups.

I added six exact match keywords (shown right) to the first ad group. The initial bid was set to $0.10.

A few minutes after creation, they were all listed with a quality score of 3/10 and a First page bid estimate of $1.00.

Interestingly, Relevance was initially listed as ‘No Problem’ but 14 hours later is listed as ‘Poor’ for every keyword.

Because the corporate account had bid on the keyword, I looked in ClickEquations to see how it was doing. ‘High resolution ppc’ (broad match) has a quality score of 7 and a Max CPC of $0.10. Relevance says ‘no problems’. The ad copy and landing page for that keyword also use the phrase in just about every place possible.

Given the lack of history, and knowing that history matters, I accept for the moment the fact that it’s necessary to bid $1.00 per click for a phrase I made up (ie the competition is light, on both content and competitive bidders). So I raise the bid on the one exact match keyword ‘high resolution ppc’ to $1.00.

The ad did not start showing in the SERPS. So I went to sleep.

Money Talks
This morning I checked again. The ad from the new account is now in position #1, at the top. It still has a quality score of 3, and a ‘Poor’ rating for Relevence.

Someone explain how these keywords could be more relevant for the search queries, text-ad copy, and target URL – all of which contain the exact 3-word phrase.

It had zero impressions or clicks overnight. To boost my CTR, I clicked it the time I ran my search to check it. Cost me a buck, but my CTR is now 100%!

There were only 3 ads shown the first time I searched. The book ad, the one from ClickEquations, and one from AdWords themselves trying to lure innocents into PPC for the first time.

Interestingly, and perhaps coincidentally, after my $1.00 self-help click, the phrase now returns 14 AdWords ads – due to broad matching on the ‘ppc’ part of the search query no doubt. I guess once Google sees that people who search this phrase will click paid ads, the ads come a-runnin’.

What Happens Next
There’s nothing too revealing in all this. The time frames and data sets are tiny, the behaviour is more or less consistent with what we’ve been told about quality score. Yet I find the rare opportunity to view a case study with so few complications appealing.

It won’t be pure, of course. Some of you will go run the query, depressing the CTR. A few will even click the ad, wasting a little money

But over the next few weeks we’ll see what happens.

1. How long will it take to get the quality score up from 3 to at least 7?
2. When will Google recognize that the relevance is perfect, not poor?
3. Will the CTR on the new version of the ads beat the old ones that earned the quality score of 7?
4. How long until I can get the bid down from $1.00 (which clicks are not worth) to $0.10 (which they may be)?
5. Once the account grows, what will be the best way to monitor and control lifetime account CTR history, and visible URL CTR history?
6. How much is this experiment going to cost? (Note: It’s not entirely an experiment, the ad and site are real and will live on – the learning is a bonus.)

Stay tuned….

UPDATES:

Day 2 – Quality Score 4, CTR 40%, Impression 10, Clicks 4
Day 4 – Quality Score 5, CTR 45%, Impressions 11, Clicks 5
Day 4 – Lowered bid from $1.oo (former ‘first page bid estimate) to $.80)
Day 4 – Added new ad group with 1 keyword – Craig Danuloff (broad match) initial QS=5
Day 4 – Noticed that navigational keywords (www.highresolutionppc.com) have QS=7
Day 6 – Quality Score 7, CTR 41%, Impressions 12 (So it wasn’t a volume issue). Ave CPC to date = $0.87 Ave Pos 1.1
Day 7 – Lowered bid from $0.80 to $0.25
Day 7 – First Page Bid Estimates on other KW in ad group, dropped from $1.00 to $0.20 where QS rose to 6 from 3-4
Day 7 – First Page Bid Estimates on other KW in ad group, dropped from $1.00 to $0.30 where QS rose to 5 from 3-4

For much of last year, regular readers of this blog know that we’ve talked about the idea of ‘High-Resolution PPC’.

High-Resolution PPC is about clarity. It’s about removing the confusion surrounding how things work, which measurements matter, and what you should do to drive better paid search results.

In the coming weeks and months we’re going to share a lot more details and thoughts about this new way of understanding and managing paid search.

One huge milestone in that process will be the release, later this month, of ‘21 Secret Truths of High-Resolution PPC’.

This will be a free eBook available to anyone who requests it, and we’ll have special full-color printed copies if you visit us at the SES, OMMA or SMX trade shows in March.

The book shares the 21 core facts and philosophies upon which we believe effective paid search management is based.

They’re called ‘Secret Truths’ because this isn’t a summary of the popular notions that typically pass for paid search best practices. This is a ground-up reconsideration of what each component in the system does, and a rebuild of how you should manage based on this fact-based (rather than faith-based) view.

One person who’s seen the final book is Avinash Kaushik. Here’s what he had to say:

“The glory of paid search is hyper relevance and how absolutely data driven it is. If your goal is to be the best you can be at paid search then your path goes through this e-book.”
- Avinash Kaushik, Author: Web Analytics 2.0.

You can sign up now to be notified as soon the the download is released. (Note: If you signed up from previous mentions, we have your name so you’re already on the list.)

Every time someone executes a search, they’re asking a question.

They search because they want to learn about something. Or find out where something is. Or discover who has it or knows about it.

They may just be curious. Or the question may have been provoked by an urgent problem. The question could be simple or complex and the searcher might be sophisticated or naive.

But every search is a question.

Search engines deliver answers. They look at the word or words in the search box, assume or infer the question being asked, and then put together a list of potential answers to that question.

Paid search is your chance to offer your answer as a part of that list.

This simple truth – people are asking questions and you’re trying to answer them - is a great way to frame the process of managing paid search accounts.

It makes clear the fact that every step you take along the way should help to either target better questions, deliver better answers, or ensure that you pay a reasonable price for the privilege.

There are many complicated aspects of managing paid search. Accounts are large and business conditions change rapidly. There are confusing options, evolving algorithms, and aggressive competitors. This isn’t going to be easy.

But it’s nice to have a simple mental model to guide us: We’re just trying to answer questions.

As promised, we continued counting ballots, and now can announce the top 3 blog post series of 2009 from The ClickEquations Blog.

Here they are:

#1 – Impression Share Deep Dive (Parts I, II, and III)

#2 – Thoughts on Revenue Allocation (Part I, Part II, Part III)

#3 – Avinash Revisited (SEM Analytics) (Part I, Part II, Part III, Part V)

Our New Facebook Page is looking for fans! If you’re a serious paid search marketer and enjoy this blog or like ClickEquations, please ‘fan up’ by clicking the button in the Facebook widget in the far right column.

Pundits are already calling 2009 “The Great Recession”. Search marketing has been more recession resistant than other industries, but advertising overall has taken a hit.

It’s no surprise, then, that when you look back at the year in significant Google AdWords changes one thing comes through loud and clear: Google is wringing every penny out of SERPs at the expense of organic search.

Advertising on the Google is becoming more competitive and more complex. The timeline below shows the key changes made to Google’s AdWords program in 2009.

As you can see, many of these changes pull attention away from organic listings: AdWords site links, Product extensions and even the location of the ads on the right, to name a few. (FYI – This timeline is embeddable on your site or blog).

If I missed a notable announcement, please comment.

2009 AdWords Changes Timeline

• January 13, 2009 – New Features in Google Maps Ads
  Google adds a new “info window” for Google Maps and extra analytics. Google is actually pulling some of the more common tasks users do for businesses (ex: getting directions) into the window.
  .
  This is significant, because each of these “micro-conversions” represents an action that approximates ROI for your local business. Analyzing and optimizing around these activities and others will help improve your ad spend.
  .
  It’s also interesting to note that Google is pulling more of the site experience to their site vs. yours, a trend we also see in the comparison ads (detailed below).
  .
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• February 20, 2009 – Updated Display URL Policy
  Disallowed multiple display URL domains within a single ad group. All text ads must now have the same top level domain.
  .
  For example, www.clickequations.com/blog, www.clickequations.com and www.example.clickequations.com would all be acceptable in the same ad group. However, you could mix www.clickequations.com and www.clickequations.paidsearch.com in the same ad group, for example.
  .
  The display URL affects your CTR, conversion rate and is a factor in your Quality Score, so it’s important to monitor changes to their policies.
  .
• March 4, 2009 – Expandable Rich Media Ads on the Content Network (beta)
  Expandable rich media, which offer interactivity and video streaming, was opened to beta advertisers on the content network.
  .
  Rich media has to be measured differently than traditional display ads, which is limited to impressions, clicks and post-click activity (though viewthroughs are now available, see below). Rich media, meanwhile, can be expanded and interacted with in a variety of ways: video plays, form completion, etc.
  .
  This also introduce an element of complexity in the analysis of your traditional display campaigns. How often are you competing against rich media ads? How does that affect your performance?
  .
  These questions aren’t easily answered today, but will become more important as the number of advertisers and media formats increases on the Content Network (see DoubleClick announcement below)..
  
  .
• March 11, 2009 – Interest Based User Targeting on the Content Network (beta)
  New behavioral and interest-based targeting on the content network. Content network targeting has been keyword based or placement targeted (you select from a list of sites).
  .
  Google is now classifying people into groups based on their visits to sites running AdSense, ex: Shopping – Coupons and Rebates. You can now target these groups without specifying keywords or choosing particular placements.
  .
  Display advertising is one of Google’s key focuses in 2010, so it’s likely that we can expect more targeting options going forward.
  .
• March 12, 2009 – Hal Varian’s AdWords Auction Video
  Google’s Chief Economist explains the AdWords auction. In this video, Hal Varian shared a lot of detail that helped illuminate some important concepts: clickthrough rate is the number one factor in Quality Score, your bid actually plays an indirect role in the final calculation of your CPC, and increasing your Quality Score could save you 20% or more.
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• May 14, 2009 – Google Loosens Their Trademark Restrictions
  You can use trademark terms in your ad text in the U.S. even if you don’t own the trademark. Previously, Google permitted you to bid on trademark terms, but not use them in your text ad. Now, “you can use trademark terms in your ad text in the U.S. even if you don’t own that trademark or have explicit approval from the trademark owner to use it.”
  .
  You can expect increased competition among branded and trademarked terms from retailers, resellers and affiliates. Tools like The Search Monitor can help you monitor trademark use.
  .
• June 17, 2009 – Import Google Analytics Goals into AdWords
  Advertisers who use Google Analytics can now import conversion goals into AdWords (click to enlarge). If you’ve tagged your site with Google Analytics, you can substitute that measurement for the Engine specific conversion tags to measure conversions and revenue.
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  To use this feature, advertisers must opt-in to share their data with Google products or Google products and their benchmarking services. Keep in mind that both Google AdWords and Google Analytics currently default to last click revenue attribution.
  .
  
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• July 24, 2009 – Local Extensions for Local Business Ads
  Displays address alongside the text ad for relevant searches. Local businesses can now link their Local Business Center account to AdWords.
  .
  Your location will now appear alongside your text ads in one of two ways. Either you can associate specific location extensions with individual ads or let Google dynamically match eligible locations to a user’s location (usual determined by IP) or geographic modifiers in their query (ex: philadelphia gym).
  .
  These extension replace the local business ads format, but differ in two important ways:
  - Business title: You will no longer be required to have your business title be the first line of your ad text.
  - Targeting restrictions: By default, enabling ad extensions at the campaign level will not limit your ad targeting.
  Unfortunately, Google hasn’t released any reporting to help you understand when local extensions appear and how they affect your performance. Make sure to test your text ads and set your geo-targeting options properly as you transition over.
  .
• July 30, 2009 – New AdWords Interface
  Google redesigned the user interface and features in their web-based editor for AdWords. Reaction was mixed, according to some polls.
  ..
  Most notable was the addition of the Opportunities tab, which pulls together a number of tools and automatically suggests changes or additions to advertisers accounts. Devin Sandoz said that this is a key area for 2010, which means we can expect to see more features.Right now, the tab primarily presents suggestions for keyword additions.
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  The relevance of these words varies wildly, so be careful with your additions and make sure to mine your search queries.
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• August 3, 2009 – Bid Simulator Launch
  Google new tool to estimate impressions, clicks and costs at different bids (click to enlarge). The data, calculated on a rolling 7 day basis and only for higher volume keywords, is an unusual move by Google to increase transparency into the bidding process.
  .
  You can see the potential (though theoretical) trade offs between impressions, clicks, CPC and total cost at various Max CPCs. As Hal Varian explains in another great video, you have to look at the incremental cost and profit per click, not just the potential traffic change.
  .
  This, combined with Google’s research showing that conversion rate doesn’t vary by position, can help you make more informed bidding decisions. Of course, you still need to optimize your Quality Score. For more detailed analysis, check out our article on Search Engine Land..
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• August 6, 2009 – Google Moves Paid Ads Closer to Organic Listings
  Ads on the right side of the search results are now closer to organic listings. Previously, ads were set to a fluid width. As a user’s browser screen stretched, the ads moved further away from the organic listings, staying close to the scroll bar.
  .
  Now, the ads stay fixed to the right side of the organic search results regardless of browser window size. While there aren’t any hard statistics, it’s likely that paid search clickthroughs increased at the expense of organic results.
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• September 17, 2009 – The DoubleClick Ad Exchange is Integrated on the Content Network
  DoubleClick Ad Exchange sites are now part of the Content Network. Google has been aggressively pursuing the display ad market, first with its acquisition of DoubleClick and then with the introduction of the DoubleClick Ad Exchange.
  .
  Now, that exchange is connected to the Google Content Network (sites which run AdSense).  This vastly increases the inventory of sites that your content network targeted ads could show up on. Make sure you run you run regular placement reports to see how these new sites could affect your performance and exclude sites where appropriate.
  .
  To learn more about the content network, download David Szetela’s book, Customers Now..
  .
• September 30, 2009 – Viewthrough Conversion on the Content Network
  New reporting about “where your ad is seen, but not immediately clicked on”. As part of Google’s expansion into display, they’re ramping up measurement and analytics. Viewthrough reporting attempts to show the value of an impression to conversions.
  .
  There are two key limitations: first, there is no proof that a user looked at your ad. Second, it requires that you have AdWords conversion tagging. Proceed with caution…
  .
• October 2, 2009 – Google Increases Advertiser Bans
  Google permanently bans advertisers “who’ve submitted multiple sites that violate our landing page quality guidelines”. A number of advertisers were excluded from AdWords in a short period of time, according to reporting by Barry Schwartz on Search Engine Land.
  .
  Some have speculated that these changes were related to Google’s introduction of product ads through product extensions (see below) and specific types of websites and landing pages. There’s no official word from Google on their blog.
  .
  This post provides a good process for appealing landing page Quality Scores.
  .
• October 29, 2009 – New AdWords Comparison Ads
  AdWords Comparison Ads launch for mortgage queries (click to enlarge). Google has offered search suggestions and other forms of query refinement options for a long time. Now, they’re extended that concept into a structured experience starting in the mortgage/refinancing industry.
  .
  The new tool features a number of options to drill down: location, home price and income to name a few. The ads only show up in a limited number of areas and advertiser participation is currently by invitation only. They haven’t shared any details of how this will develop next or what kind of reporting will be offered. If you advertise in one of these industries, I suggest you contact your sales rep for more details.
  .
  Like the changes on the local business ads, Google is pulling more of the site experience to the SERPs themselves. If your business relies heavily on these kinds of tools (Progressive, I’m looking at you), you’ll want to keep an eye on how these ad formats change. You may have to differentiate less on tools and more on content..
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• November 3, 2009 – Ad Sitelinks in AdWords
  Some searches will produce ads that display up to 4 additional display URLs can be shown for “for ads that meet certain quality criteria” (click to enlarge). These are similar to the sitelinks you see in organic search listings, but you can explicitly choose which landing pages and text are eligible to be displayed (up to 10).
  .
  To setup ad extensions, click on the Campaign Settings tab and go to the “Show additional links to my site” section under “Ad extensions”.
  .
  The conditions that trigger these new ads are still somewhat unclear. A few things seem to be true: it’s for ads in the preferred position (above the free results) and those with a substantially better clickthrough than other ads. This is likely to be primarily brand terms.
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  Like many of the other changes to AdWords, reporting features to analyze these new options aren’t yet available. I’ve heard anecdotal evidence from my conversations at SES Chicago that the links improve conversion rate. Of course, you’ll want to be mindful of how these links push down organic results and potentially cannibalize that channel..
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• November 11th and 24, 2009 – Product Extensions Open to All
  Product images, titles and prices from Google Merchant Center appear alongside traditional text ads (click to enlarge). This feature links Google Merchant Center (previously Google Base) to AdWords as an ad extension, similar to site links.
  .
  This is in addition to the Product Listing Ads announced earlier. Product extensions are charged on a CPC basis, while product listing ads are charged on a CPA basis. Product extensions are open to everyone, but product listing are currently in closed beta.
  .
  This is, perhaps, the most aggressive step Google has taken in their New Ads Formats Initiative (see The Future of AdWords below). According to Google’s own blog post, some companies have seen a 10% CTR increase with product extensions.
  .
  This has two practical implications. First, those extra clicks can only come from 3 places: organic listings, competitor ads, or users who wouldn’t have clicked on any ad at all. In the case of the first two, you could lose (or win) clicks, depending on where you show up on the SERP vs. yoru competitors. Given what a strong component clickthrough rate plays in Quality Score and ultimately your CPC, you want to keep an eye on it.
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  Second, (and this is speculation) it’s possible that the people who click on an image ad may convert better for your business than those who click on a text ad. If they can see exactly what they want before they get to your site, they may be better qualified.
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  The bottom line is that this is Google’s game, these ads aren’t going away anytime soon and you’ll need to run experiments to see how it works for you..
  

Here’s an alternate version of the events listed in an interactive timeline:

.

The Future of AdWords

Late in November, Google announced their “AdWords New Ad Formats Initiative” and declared “This initiative is Google’s next chapter in search advertising and over the next year it’ll be a major focus for AdWords”.

At SES Chicago, I asked Devin Sandoz, Product Marketing Manager for AdWords, about the guiding principles behind the initiative. He pointed to the evolution of organic search results, which have increasingly blended text ads with videos, images and news content.

While those changes occurred, PPC ads have largely remained text only. It’s possible that ads may not get clicked on as often.And now, they’re experimenting with videos, product extensions & location specific information to counteract the effect. For advertisers, this means you can take your existing campaign and Google will attach relevant information “when it makes sense.”

I think this is an important analogy which tips Google’s hand a bit about where AdWords is going. The evolution of the organic listings with universal search producing blended listings is likely to slowly make its way into the paid ads. Could personalized text ads be far behind? We already have session based retargeting with Broad Match (here and here).

It now means your performance has much more to do with the context of the SERP than ever before. Were you competing against product ads? Which sitelink did someone click? Are you fighting against a more robust comparison ad?

2010 is going to be a tougher year for AdWords advertisers. How are you planning to keep up?

The distinguished accounting firm of Anderson Cooper & Woods have finally tallied the ballots and we have our results.

The official top 9 best loved posts from the ClickEquations blog for 2009:

• The Economics of Quality Score
• Living In The Past: 10 Signs Your PPC Got Stuck in 2003.
• Broad Match is a Fishing Tool and You Should Be A Hunter.
• Keyword Suggestion: Think Like and SEO for PPC.
• Surprise: Bids Don’t Determine Your CPC.
• A Guide To Bidding on Brand Terms.
• Avinash’s Favorite PPC Tips.
• Why Adwords isn’t Good Enough.
• Introducing The DeTweet

Note that posts originally a part of a series were not eligible for this year’s awards. A separate ‘best series’ category has been created and winners shall be announced separately.