Andrew Goodman is clearly one of the most informed and deepest thinkers on the insides of Adwords. His comments on the recent changes are worth reading and thinking about.

I particularly like the way he defines assumptions as to why they’re making these changes:

1. New advertisers (and unevenly-engaged advertisers returning to refresh their memories) do keep pouring into the space, especially internationally. The optics of high minimum bids don’t look good. They’re alarming and off-putting to newbies.

2. Google likes its black box, and likes to avoid black-white distinctions. Building very flexible (read: confounding) architecture helps Google achieve a number of goals. And even those goals are subject to change.

3. Yet Google faces pressure for additional disclosure. So for every layer of complexity they build in, they try to offer up at least an equivalent step forward in terms of disclosure.

4. At Google AdWords, CTR is king. Clicks drive revenue, and continue to be a reasonable proxy for relevance. This is the biggest constant since 2002.

5. The platform as it stood at version 2.6 (my nomenclature), contained pockets of inefficiency. It did a good job of ramping up the “quality” bar, to the delight of users, but as even Sergey sheepishly admitted to investors, they might have “overtightened” the calibration of the platform, showing too few ads for advertisers’, Google’s, and investors’ taste. The new release is intended to offer Google the ability to “untighten” selectively, without giving anyone the satisfaction of being able to point definitively as to exactly how that is being achieved.

Go read his initial conclusions.

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.

In my ‘Three Challenges’ Post I wrote the following to describe one of the fundamental reasons why I think the process of managing paid search needs to be improved:

There is a lack of clarity. It is amazingly difficult to get accurate and complete data on campaign performance and results. Much of the data you need to see is scattered across three to five different tools and interfaces. Other data is presented in formats or based on calculations that just aren’t right. (they’re wrong.) Still other information is seemingly unavailable. There is no quick and accurate way to get reports which are satisfying.

Since then I’ve written four posts in an attempt to explain and expand. But I’m not sure I captured it.

To manage something effectively it’s necessary to see cause and effect. The paid search networks use such complicated rules and hide certain key data elements which make this impossible.

Search queries, which are the primary driver of search success, are a key example. But it’s really the full relationship between queries and keywords and match types and quality score and text-ads and landing pages. The truth lies in that matrix somewhere, but nobody is letting you see it.

You see a pile of queries over here (partially, sometimes). A bunch of keywords over there. Some ads further off in the distance. Want to understand the relationships? Put them together in your own head.

Clues are great in a mystery. Not in a business transaction.

How many keywords should you place in one ad-group?

It’s an age-old question for paid search marketers.Traditionally ad-groups have been considered organizing baskets for keywords. All the variations on a particular keyword, and/or all the keywords driving to a particular product or product category, are often placed into a single ad-group.

It’s common to see campaign and ad-group structures which mirror product categories and sub-categories, for example.

When the question of ‘how many’ comes up, the answer is often given as a number. I’ve never understood this. Why does the number of keywords matter?

Even the Yahoo Smart Start Guide (PDF) suggests “While there isn’t a magic number of keywords to include, you may want to start with no more than 20 - paired with two or more ads - and adjust from there.”

Consider The Text-Ads

Here’s another way to think about it. What you’re really organizing with ad-groups is text-ads, not keywords.

Each text-ad in an ad-group should be a different attempt to answer the same questions, or attract people with the same interests. It doesn’t matter how many keywords you place in an ad-group as long as the queries each of them is likely to be matched with are all appropriately served by those ads.

You’re playing Carnac, writing answers to questions that are going to come along later. The keywords you put in that ad-group are your only chance to ensure that your answers are going to be relevant to their questions.

If there are 20 keywords then there are 20. If there are 100 then there are 100.

When To Split Ad-Groups

Leaving the numbers aside, there are two smart reasons to subdivide the keywords in an ad-group. Both are based on the idea of matching your text-ads more closely to the search queries and keywords.

One is to separate keywords by subject terminology - a focus primarily on nouns - so that the specific keywords are repeated in your text-ads and on your landing pages. This is done primarily in service to the gods (or slave drivers) of quality-score.

The other is to separate keywords by qualifiers - verbs, adjectives, or other modifiers. This is done primarily to better align your text-ads with the expressed or implied intent of the users. In most cases it also brings along the quality score benefit too.

Would you want to present the same text-ad to someone looking to ‘buy a house’ as someone trying to ’sell a house’? How about someone wanting ‘bell bottom jeans’ vs one looking for ’stone washed jeans’. ‘discount headphones’ vs ‘3-driver stereo headphones’?

The more narrowly you can segment your user queries, which you control via keywords and match types, the better your click through and conversion rates will be.

Divide and Conquer

The topic of organizing campaigns is one I hope to cover extensively in the coming weeks. This post was inspired by one over at PPC Hero talking about the benefits of breaking down ad-groups.