The change in PPC ad-rank weighting
Back in May, Google began to roll out changes to its ad rank weighting process. The changes are now complete, so advertisers are starting to see what impact, if any, the change is having on them.
The ad ranking process
Advertising using Google AdWords works rather differently to advertising in other ways, in the sense that your bid is only one of the several criteria which Google uses to judge whether your advert should appear at all and, if so, in what position.
In essence, Google undertakes an evaluation of the relevance and quality of an advert as well as the bid price they are being offered to display it. They also rate the quality of the landing page to which the user is directed. The adverts that score best get the highest positions at the lowest bid price. Other adverts will appear lower down and/or pay a higher price.
The recent changes to the ad ranking process now include the meaning or intent of the query as part of the evaluation, for example, if someone types in “new iPhone”, Google will try to determine whether they’re looking for news on a forthcoming iPhone release or whether they’re looking to buy themselves a new iPhone.
This change means that Google can now apply different ranking criteria to the same search terms, when they are used in different contexts.
Impact on search volume and/or traffic acquisition
In very simple terms, this change allows Google much more flexibility when it comes to deciding whether to prioritise the value of the bid or the quality of the advert.
While it’s still early days, there is widespread speculation that Google will enforce high-quality standards when it determines that a user is looking for news, and will give more weight to the bid when it determines that they are looking to make a purchase.
This would make commercial sense on Google’s part, but could create challenges for advertisers since they could see their search volume and/or traffic acquisition decreasing, even though their quality standards remain high.
Impact on cost-per-click
The corollary to this is that, without careful campaign optimisation, advertisers could find that they need to pay more money just to stay where they are in terms of click-through-rate. In other words, if getting traffic becomes more about the bid and less about the quality, advertisers may find themselves pushed into a bidding war for keywords, meaning potentially higher prices.
While this is unlikely to be welcome news to advertisers, it could also be a helpful wake-up call to some and serve as a reminder that PPC campaigns need to be constantly monitored, updated and restructured to maintain ROI at target levels. In addition, it could highlight the danger of relying too much on one particular channel or strategy for internet traffic. While PPC is likely to remain the key driver of customer acquisition for most, advertisers would be wise to (continue to) also work on search engine optimisation (SEO) and on building their brand, for example through developing their social media and content footprint.
That way, if consumers are searching directly for your company/brand, then you will have multiple touchpoints available to them, thereby diluting your risk. If you’d like to know more, please email us at firstname.lastname@example.org.