Quality elements in paid search bidding: a third-generation auction

Andrew GoodmanPage Zero Media

2SES Chicago Dec. 2006 – Day 1

Three generations of paid search ad ranking• (1) GoTo.com / Overture model: pure bid-for-

placement– Variation 1: AdWords 1.0, CPM-based, fixed– Variation 2: Overture folds in “click index”

• (2) AdWords 2.0: Max Bid X CTR– Various approaches to CTR “cutoffs” and other

factors

• (3) AdWords 2.5, 2.6: Quality-Based Bidding– Yahoo’s version coming soon, too

3SES Chicago Dec. 2006 – Day 1

This session may mean very little to you if…• You have high QS across the board (this is normal)• In this ad group, 9 of 428 keywords were deactivated.• As it turns out… 8 of 9 were being bid at .01, and the

min bid is .03 • The only “rotten result” was for the keyword

“yahtzee” – for some reason min bid is .30• This is a normal, granular, relevant campaign

4SES Chicago Dec. 2006 – Day 1

How it Works

• Two Quality Scores– One affects minimum bid (keyword status)– One affects ad rank

5SES Chicago Dec. 2006 – Day 1

QS and keyword status

• Predictive or historical CTR• “Other relevancy factors”– Tightness of relationship keyword – ad – landing

page

• ***Landing page and site quality***• Types of keywords? Editorial policies?• Result of low QS: high min. bid

6SES Chicago Dec. 2006 – Day 1

How it looks to have low QS

7SES Chicago Dec. 2006 – Day 1

If you fix it, it won’t necessarily activate (changed destination URL’s to be more granular)

8SES Chicago Dec. 2006 – Day 1

How it Works: Landing Page and Site Quality Assessments

• See Google’s guidelines• Human coders used to train algorithm• Principles for ad quality raters are derived

from user feedback on a large scale• Yes, Virginia, “arbitrage makes up a high

proportion of the complaints we receive”• AdsBot crawls landing pages looking for

“markers” – a formula will determine likelihood of poor user experience etc.

9SES Chicago Dec. 2006 – Day 1

QS and Ad Rank – CTR’s still key

• CTR and Max Bid still predominant• Other factors? How important? Unclear• Landing Page Quality not used here• Position based mainly on bid + CTR• CTR is still normalized for ad position

10SES Chicago Dec. 2006 – Day 1

Which does lead us to the next question…

• Is Google really targeting arbitrage, or not? Just look at all those eBay ads etc… (we’ll get to that answer shortly)….

11SES Chicago Dec. 2006 – Day 1

[…and don’t even get me started on the quality of the organic SERP’s]

12SES Chicago Dec. 2006 – Day 1

Case #1: Fix What’s Broken

• Advertiser (a sports training facility) using separate page to test response on different domain

• AdsBot clearly believes this is a spammy, shifty site– No business info disclosure– Looks like a templated “come-on” page– An orphan page, no conventional navigation

• Solution: simply revert to original domain which has a similar landing page with full disclosure & conventional navigation;

• If necessary alert Google to the change

13SES Chicago Dec. 2006 – Day 1

Case #2: Don’t Be Stoopid

• Advertiser X panics with low quality score– Cranks up bids to $100– Ponders landing page design in minute detail– Finally admits, a popup was to blame– And the popup said… “next time you come back to

the site, don’t use a search engine… each click costs us money!”

14SES Chicago Dec. 2006 – Day 1

Case #3: Cheesy Landing Pages + Deceptive Offers – “There is No Sanctuary”

• AdsBot flags offer as being unrelated to keywords• Editorial review confirms this• Company is well known in “data collection”• Google hates “data collection”• Google is a leader in “data collection”• Solution? Really there is no quick fix if you’re

substantively at odds with Google; it’s an editorial issue and your account is flagged

• Consider a long term plan to rebuild the business model around original content and a genuinely interested audience (permission marketing)

15SES Chicago Dec. 2006 – Day 1

???? Panama ???? – Will roughly follow suit

16SES Chicago Dec. 2006 – Day 1

Interesting Trivia

• Google may relax minimum bid amounts:– “In countries where market is less mature”– In various countries, for other reasons

• Upshot is, study global opportunities

17SES Chicago Dec. 2006 – Day 1

Arbitrage vs. Garbitrage: Compare this landing page…

18SES Chicago Dec. 2006 – Day 1

Or this popular restaurant review destination…

19SES Chicago Dec. 2006 – Day 1

With the world’s most indispensable resource on… er… Overture links to ads about jelly beans.

20SES Chicago Dec. 2006 – Day 1

Who’s to say what quality is?

• Is Google acting arbitrarily?• Or are users providing feedback? Users seek

real content or real shopping, not another page of links.

• Search engine results and ad results quality dictate repeat usage of search engines; search engines must protect their real estate

21SES Chicago Dec. 2006 – Day 1

User behavior & response can be measured over time

• “Although paid search and Google Search operate independently, Google’s thinking about quality is by no means siloed”– Nick Fox, Product Manager, Ads Quality, Google

Happy holidays!

Andrew GoodmanPage Zero Media