The Google ‘Inside AdWords‘ blog has announced changes to how they calculate quality score and rank ads. The changes will remove the bias of ad position in calculating your quality score and also tweak how ads are promoted to spots above the search results.
Quality Score Update: Google have confirmed that click-through rate (CTR) remains the most significant component of the quality score, because it directly indicates which ads are the most relevant to their users. However, they’ve now removed the influence of ad position on this calculation.
This is because ads higher on the page are more visible and usually get more clicks over those in lower positions for this reason alone, not necessarily because it’s a more relevant ad. In an effort to show the most relevant ads, Google will adjust its calculations to remove the influence “position” has on the CTR.
Ads Above Search Results: Google have also tweaked for formula to determine which ads are displayed in the yellow section above search results. Previously, ads displayed in this area had to meet a certain quality threshold, and if the first listing didn’t have a high enough AdRank (quality score x CPC), no ads were displayed in this section.
Now, Google are allowing ads in position 2 and 3 to leapfrog over position 1 and appear in the yellow section if they have a high enough quality score.
Overall, the changes appear to be placing less importance on how much your bidding, but rather what your quality score is.
For those of you who are unsure, quality score is Google’s version of PageRank for AdWords. It takes into account a range of factors to rate the quality of each keyword in your ad group/s.
These enhancements will be released shortly by Google, so keep an eye on your ad position, spend and performance over the next few weeks!