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Thoughts on Stats that contradict Google Adwords Algorithm?

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

Hi All!

Came across some interesting statistics while doing some campaign optimisation. 

Row LabelsCount of KeywordAverage of Avg. positionAverage of Avg. CPCSum of Clicks
121.30$3.641
422.10$4.505
583.41$3.1611
6143.70$3.5210
7104.71$7.5366
844.65$6.583
984.84$7.6859
(blank)
Grand Total483.96$5.29155

 

This sorta contradicts what is "supposed" to happen - higher QS (left column) means lower CPC /higher Average position?

Competitive industry, but stumped on how to present this to my team, considering it goes against everything.. QS of 2 that has the lowest CPC and average position of 1? Bid wise, all are on the same Max CPC - $10.

 

Would be great to gather some analysis from everyone!

Thanks in advance!

2 Expert replyverified_user
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Accepted by topic author Paula G
March 2016

Re: Thoughts on Stats that contradict Google Adwords Algorithm?

Top Contributor
# 11
Top Contributor
Hello, Paula.

Please keep in mind that higher QS should only mean a lower CPC for the same keyword and only when competition stays exactly the same.

It would make sense if you'd track your QS over time, for the same keyword(s) and possibly see the average CPC decreasing, provided that you're not going against a competitor that chose to bid in such a way as to outrank you (target outranking share). If anything like that happens and if your bids are high enough, you may easily see your QS rising and being accompanied by the CPC as well.

The only thing a higher QS does is to help you achieve a higher ad rank when you're bidding the same amount. What you end up paying in order to keep your position is a different story and is influenced by what others are bidding.

Here's a video that explains the whole process (although it no longer gives you the precise formula that Google used before the impact of the ads format came into play): https://www.youtube.com/watch?v=PjOHTFRaBWA

So if you're having keywords A and B and A has a QS of 10 and B has a QA of 6, you may well pay less for a click for B if there's lower competition for it than it is for A. However, if another advertiser realizes that keyword B is interesting and starts bidding for it, you may well work on your ads and formats and improve it to a 9 and see that you'll have to pay more for a click in the same position than you used to when you had a QS of 6. That's because, as Hal Varian states in the video, you'll only have to pay the minimum necessary to beat the advertiser below you. And that's variable. From auction to auction and from keyword to keyword.

Hope I managed to make myself clear. If I haven't, please let us know. But the bottom line is that it only makes sense to compare the QS/CPC variations for the same keywords, not for different ones. If you wish, you can even take a look at estimated first page and top bids for various keywords. They are not related to QS alone. I was just looking at a keyword with a QS of 5 and the estimated FPB is 0.01 while for a 10 one it is 0.84. Again, you have to bid (and will pay) a lot more to get a click for a 10 than you do for a 5. Why? Competition.
Calin Sandici, AdWords Top Contributor | Find me on: Google+ | Twitter | LinkedIn | myBlog
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Re: Thoughts on Stats that contradict Google Adwords Algorithm?

Explorer ✭ ✭ ☆
# 2
Explorer ✭ ✭ ☆

Those numbers make sense if you have stronger competition on the high-QS keywords.

 

Higher QS would mean lower prices if competition was the same for all keywords. Competition is never the same for all of your keywords. Not all of your competitors bid on all of your keywords, and their bidding priorities may be different.

 

Honestly, I wouldn't even bother with a report like this, because it encourages bad assumptions. It's not a correct assumption that higher QS keywords are always cheaper than low-QS keywords, and this table isn't giving you actionable information.

 

 

Re: Thoughts on Stats that contradict Google Adwords Algorithm?

Visitor ✭ ✭ ✭
# 3
Visitor ✭ ✭ ✭
Hi Michael, Thanks for the reply.

To be fair, a table like that is totally justified. There are many an article that state that higher QS leads SHOULD incur a lower cost to achieve the same position as a lower QS fighting for the same spot. This is the fundamentals of Adwords - Higher QS trumps Max CPC and CPC bids. Lower QS by google owns statements, many articles on search engine land and other sources, state that higher QS are rewarded for being just that - relevant. I'm not sure how a table like this is a bad assumption and not a (generally) accurate indication of what should happen for a QS 2 keyword when compared to a QS 9 keyword in the same ad group?

Thanks

Re: Thoughts on Stats that contradict Google Adwords Algorithm?

Explorer ✭ ✭ ☆
# 4
Explorer ✭ ✭ ☆
The fact the keywords are in the same ad group means nothing. You're not getting it.

The "X factor" here is something completely outside your account. CPC cost is determined by a bidding algorithm that takes into account your AdRank and your competition's AdRank.

You have no direct knowledge of competitor AdRank on a given query. You have indirect evidence of it here, but you're completely misinterpreting it, because you don't understand the fundamentals.

"Higher QS trumps Max CPC and CPC bids" is literally nonsense. You don't even understand how the auction works.

Re: Thoughts on Stats that contradict Google Adwords Algorithm?

Visitor ✭ ✭ ✭
# 5
Visitor ✭ ✭ ✭
Wow. Thanks for the input Michael - Might leave your comment there. Certainly didn't post with the intent of being told I don't understand Adwords fundamentals. A simple "there is clearly more competition for the QS 9 keywords" would have sufficed ( and was what I thought could be the reason.)
Thanks for your contribution - Will await other input or post on other forums in hope of actionable, valuable feedback that I can use.
Cheers, Paula.

Re: Thoughts on Stats that contradict Google Adwords Algorithm?

Rising Star
# 6
Rising Star
Hi Paula G,

If the stats you have provided is just for a single day then yes, such outcomes may be possible.
It is always recommended to use a long range data while doing any such analysis. There are a number of factors which effects the stats on the daily basis.
These includes Competitor's ad scheduling(for particular days/hours), ran out of budget and the keywords on which you and competitors are bidding(already explained by Michael).

The most important thing is it the the average position for all the impressions for a particular keyword which means your ads might have shown at different positions randomly based on the above mentioned factors.


Regards
Archit, AdWords Rising Star, Community Profile
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Re: Thoughts on Stats that contradict Google Adwords Algorithm?

Visitor ✭ ✭ ✭
# 7
Visitor ✭ ✭ ✭
Hi Archit,

Thanks for your reply. It's over a 14 day period.

Re: Thoughts on Stats that contradict Google Adwords Algorithm?

Rising Star
# 8
Rising Star
What is your ad rotation setting for all the campaigns:

Optimise for clicks?
Optimise for conversions?
Rotate evenly?
Rotate indefinitely?

Regards
Archit, AdWords Rising Star, Community Profile
Did you find any helpful responses or answers to your query ? If yes, please mark it as the ‘Best Answer.’

Re: Thoughts on Stats that contradict Google Adwords Algorithm?

Visitor ✭ ✭ ✭
# 9
Visitor ✭ ✭ ✭
Rotate indefinatley. Standard best practice settings.

How would that influence the QS/Average position/CPC results? (Curious..)

Thanks in advance!

Re: Thoughts on Stats that contradict Google Adwords Algorithm?

Rising Star
# 10
Rising Star

Ya, that's the point which you need to rectify.

 

FYI, Rotate indefinitely Show lower performing ads more evenly with higher performing ads and do not optimise Not recommended for most advertisers.

If lower performing ads will be given preference then the less relevant ads to the keyword may trigger due to which QS will come down and you will loose the ad position.

 

Recommend you to use, Optimise for clicks: Show ads expected to provide more clicks, Ideal setting for most advertisers.

 

Regards
Archit, AdWords Rising Star, Community Profile
Did you find any helpful responses or answers to your query ? If yes, please mark it as the ‘Best Answer.’