A little more than a week ago, beginning November 6, 2006, Google unveiled its fourth Quality Score announcement. If you don’t advertise on Google, this might not mean to much to you, but if you do advertise on Google, especially if you operate in some form of affiliate advertising, then you already know where this is going. In the ad network business, the goal was always to show the optimal ad for any given impression, often described as the right ad at the right time to the right person. As an ad network, Google wants to show the right ad too, and right ad all hinges upon the notion of the Quality Score. In this week’s Trends Report, we piece together the history of this all important lever, and try to tease out some insights from both the blogosphere and Google’s own documentation.
August 7, 2005 – The beginning
In August, Google introduced the Quality Score for the first time as part of the launch of new keyword states and quality-based minimum bids.
Until this time, the notion of a quality metric didn’t exist. Google’s advertising system had already differentiated itself from Yahoo’s as it considered ad performance (click-through rate) in addition to the price. With the inclusion of the Quality Score, Google added another dimension to its calculation of an ad’s performance, one that looks at relevancy. We can think of it almost like a graph with an x, y, and z axis. Before it was just x and y. Now, there’s a z.
I don’t think any complained about the corresponding modification to the keyword statuses. Before the August 2005 change, a keyword was either normal, in trial, on hold, or disabled. In addition, Google could, and often did, slow down the amount of traffic an account received based on its ads’ performance. Google replaced those with active or inactive. New keywords are no longer disabled and have no minimum clickthrough rate (CTR) threshold. Instead, your keywords trigger ads as long as they have a high enough Quality Score (determined by your keyword’s CTR, relevance of ad text, historical keyword performance, and other relevancy factors) and maximum CPC.
You, as an advertiser, select a minimum CPC, the same as always, but now, it’s the Quality Score that decides your actual minimum CPC per keyword. A high Quality Score will result in a lower actual minimum bid and increase the likelihood that your actual minimum bid is less than your chosen maximum CPC. An example: If your chosen minimum bid is $.10 and your chosen maximum bid is $.25, but your quality score determined minimum bid is $.50 then your keyword is set to inactive status.
December 8, 2005 – Including the landing page
In December, Google started incorporating a new factor into the Quality Score – the landing page.
This change, like the last, focuses on the quality of the advertising experience. As written in the blog post announcing the change, “Have you ever searched on a keyword, found an ad that seemed to be exactly what you wanted, and then clicked on it only to find a site that had little to do with what you were searching for? It’s not a great experience.”
In this post and others, what we see is Google doing some strong positioning. Google built its brand on the power of its search results. It built its revenues on the power of the ads. Having ads is just like having another set of results. If they suck, two things happen, people don’t click and people end up coming back to the engine. The Quality Score is Google’s magic optimization lever to protect and increase its revenues and user loyalty, and they spell it out as:
Quality Score = (keyword’s CTR, ad text relevance, keyword relevance, landing page relevance)*
*Where the interactions between the Quality Score variables change as Google continues to refine how to measure and define quality in AdWords.
July 7, 2006 – The “Big One”
In August, the company announced the Quality Score. In December, they added the landing page as a component to the algorithm; it more or less collected the data that it used in July. The change would “affect a small number of advertisers,” but it would have “a positive impact on the quality of ads that our users see.” Or, in other words, this change would make the company more money and increase retention.
As “Andrew C.” said in the Inside AdWords blog, “From time-to-time, we improve our algorithms (think interaction between variables above) for evaluating landing page quality…Thus, over the coming days a small number of advertisers who are providing a low quality user experience on their landing pages will see increases in their minimum bids. It is important to note, however, that the vast majority of advertisers will not be affected at all by this change, as they link to quality landing pages.”
In atypical clarity, he also said that “…advertisers who are not providing useful landing pages to our users will have lower Quality Scores that in turn result in higher minimum bid requirements for their keywords. We realize that some minimum bids may be too high to be cost-effective — indeed, these high minimum bids are our way of motivating advertisers to either improve their landing pages or to simply stop using AdWords for those pages.”
Or, in other words, let the games begin. The games continue with Part 2.
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