It was announced this week that Google’s Ad Rank thresholds would be updating through the end of May. As a result, performance metrics like Cost Per Click (CPC) and Average Position could potentially be impacted. The CMI Search team is reviewing all client campaigns to institute adjustments. This POV addresses what changed and how we should be responding.
Ad Rank is the score given by Google that determines what position a Paid Search ad serves in on the Results Page. Every time a search is conducted, Ad Rank is calculated based on the keyword’s bid, auction-time measurements of expected click-through rate (CTR), ad relevance, landing page experience and implementation of ad formats like sitelinks and callout extensions. As marketers, the variable we can most easily influence and control in this formula is bids. Advertisers implement keyword “max bids” to inform the search engines how much they’re willing to pay for that keyword. These bids are adjusted throughout the campaign depending on keyword performance. With only 4 ad positions available above the Organic Results (about 2 positions available above the fold on mobile devices), achieving top positioning can be essential to an ad’s success in highly competitive markets.
So What’s Changing?
While there is no defined weighting of how each of these factors impact Ad Rank, Google’s update outlines that bids will play a larger role now. This means that it’s even more important that we manage and optimize bids accordingly to ensure we’re obtaining our desired positioning while achieving performance goals and maintaining cost efficiencies. Additionally, this may also mean that CPCs could potentially increase in highly competitive keyword sets as advertisers increase their bids in an effort to further influence Ad Rank. See below from Google:
While ad quality continues to play a very important role in the Ad Rank calculation, this particular improvement adjusts the thresholds such that bids may carry a larger weight in Ad Rank than in the past for some queries. You may notice that on these queries, even though you continue to have high keyword Quality Scores, that you experience a change in your core ad metrics.
The CMI Search team will continue to closely monitor and manage keywords and bids in coordination with our Google Reps to ensure we’re reducing any potential CPC increases or decreases in positioning. While bids are weighted differently now, they still make up a fraction of the Ad Rank formula. It’s important that we continue to focus on the overall quality of our campaigns and ad copy while providing a positive user experience for our target audience. Only then can we hope to reach our brand goals and place our campaigns in the best possible position for success. It’s also important to note that while this update will impact performance of most campaigns in some way, it’s a small piece of a very big pie. We are reviewing the campaigns of all clients and adjusting accordingly. If you have questions please reach out to your CMI Search team contact.