How Can I Get My Ads to Show Above the Natural Results

It used to be that Google would show Adwords only on the right side of the screen. There would be a maximum of eight ads for each page. Then, they started to show between one and three ads above the SERPs. There still are a maximum of eight ads on the right-hand side.

The question is more what makes sponsored results appear above the SERPs? Or as many call it, in the yellow boxed portion at the top and left of the screen.

There are two main conditions. Obviously you need to rank in the top three positions but you also need a minimum quality score. I believe this to be a score of seven. If your QS is below, even bidding high enough to get you to the top will not get you there.

There is not a minimum number of advertisers needed. In other words, you could have only four advertisers being served and up to three could still make it above the SERPs. Indeed, there could be only three advertisers and all three making it above the SERPs.

If no advertiser meets all the requirements, it is possible to see no ad above the SERPs. It is also possible to see only one or two. Three is currently the maximum but that could change in the future (I’ve seen Yahoo with four.)

My Account is a Mess. Should I Open Another Account?

First, Google’s TOS (Terms of Service) states that they do not allow you to
have more than one account. That rule needs to be explained further
however. If you have two or more accounts with the purpose of trying to
dominate the sponsored searches (called double serving) so that those
who click end up on sites that are duplicates of each other, that is definitely
not allowed. In fact, you are likely to be found out and permanently banned.

If however, you have two accounts but they are used for two sites selling vastly different things, there is no problem at all. However, there really is no reason to have separate accounts for separate sites. You can do all your advertising for all sites from one account.

As for the specific question, one type of “mess” you hear is that if your QS is low, there is no way out and you must start from scratch. There is NO “mess” that cannot be fixed. Quality Score is low? It can be improved and quite rapidly too with some effort.

Another similar theme that some suggest is that you have to dump your domain and get a new one. Somehow, they believe that the domain is cursed. There are some instances of domains being what is called slapped. This slapping is actually a flagging of the domain for doing things Google considers detrimental to its users, such as installing malicious software. Google doesn’t index that domain for organic rankings and doesn’t allow advertising to it as well.

I’m assuming none of you are malicious. A low QS very likely has nothing to do with being slapped for the above. It is simply because you are not doing things right. No need to get a new domain or new account. Simply fix the problem.

What is really amazing is that those who cling to this messy account myth suggest copying the account to another and copying the domain to a new one. Without making any sort of change. They expect that the Adwords routines will somehow disregard the way it calculated their score before. If you simply copy, you will get the same results. Guaranteed. Searchers are not any more likely to click the same ad now when they didn’t before.

What is the Average CTR on Adwords?

What is the Average CTR on Adwords? What is the Average CPC? Is a CTR of x% Good or Bad?

For some reason, lots of people ask these questions. I can only assume they are asking to figure out what they should do with their campaign. As explained, use the QS to determine how good or bad your click rate is, assuming you have relevancy.

I’m the Only Advertiser for This Keyword. Why Is There Still a Minimum and Why Don’t I Get a QS of 10?

First of all, you don’t know if there are other advertisers for that keyword or not. You may not see them for a variety of reasons, some of them I’ve pointed out earlier. There may be seasonal effects that others know about and why you didn’t see ads. Their budget for the day may already be depleted. They may show ads only on certain days or only during certain times of the day. Some may simply not be advertising for that keyword at this moment. Some may not be advertising in your area, doing so only in certain countries for example or even a specific city. If I advertise only in New York, you will not see my ad if you are in Miami.

So never assume you are the only advertiser for that keyword, no matter what you see when searching for it on Google.

Even if that were so, as seen in the Quality Score sections above, Google will not give you a perfect ten just because you may be the only advertiser at this moment. There is historical data they take into account. You also may not have good keyword relevancy which will drop your QS.

Minimum First Page Bids

You can bid any amount you wish on a keyword, all the way down to one cent. In the past, Google calculated a minimum bid for each keyword. If you placed a bid below that value, your ads simply would not be served at all. Since September 2008, the minimum bid requirement has been removed. You may now see next to your keyword “Below first page bid” with a minimum bid estimate.

Your ads may still be shown on the first page if you don’t meet this bid. After all, as mentioned, conditions change all the time. For example, advertisers pausing their ads, changing their bids, advertising only at certain times or having exhausted their budget or simply because their QS is decreased. Searchers may also go beyond the first page and if your ad ranks there, searchers will be exposed to your ad.

So in effect, you are not being asked to bid a minimum. The system is just letting you know that you may not be on the first page where you will maximize your exposure. It simply is a warning.

The bid amount is based on what the last advertiser’s ad rank calculation and your own ad rank, in other words your QS and bid. Suppose that there are eight advertisers on the first page and that the last one bids $0.50 with a CTR of 4% (I’ll use CTR instead of QS for simplicity). That gives him an ad rank of 200.

On the other hand, you are bidding $0.75 with a CTR of 2% which is an ad rank of 150. In order for you to overtake him and place on the first page, you would have to have an ad rank of 201 or, at the same click rate, bid $1. But if you increased your CTR to 3%, your bid would only have to be $0.67 to make it on the first page. Continue reading

How Bids and QS Affect Rankings and Costs

Obviously, any change in the system affects not only you but other advertisers as well. In fact, since CTRs change for each search, the system is in a constant state of flux. And this assumes the same number of advertisers at all times. In reality, new advertisers come, others leave, not to mention that not all advertise at all times. Some pause their campaigns on certain days of the week or even the time of day. Some have exhausted their daily budget. All this affects your rank and your costs and I haven’t even mentioned those who adjust their bids frequently.

Here are five advertisers. I’ve used one decimal point for the QS to illustrate, the price they pay is rounded to the nearest penny, just as Google does:

Advertiser Bid QS Ad Rank Pays
A1 $0.30 9.3 279 $0.23
A2 $0.28 7.5 210 $0.28
A3 $0.25 8.3 208 $0.23
A4 $0.25 7.6 190 $0.18
A5 $0.20 7.0 140 $0.20

If A3 increases his bid to $0.26, the following results (I’ve highlighted the changes in orange):

Advertiser Bid QS Ad Rank Pays
A1 $0.30 9.3 279 $0.23
A3 $0.26 8.3 216 $0.25
A2 $0.25 8.3 208 $0.25
A4 $0.25 7.6 190 $0.18
A5 $0.20 7.0 140 $0.20

A3′s payout went up by two cents. A1′s has remained the same but only because of similar ad rank between A2 and A3, while A2 has lost a position and paying three cents less because now he’s competing with A4. Now, instead of increasing his bid, A3 creates an ad with better CTR which increases his QS to 8.8 while leaving his bid at 25 cents, you get the following:

Advertiser Bid QS Ad Rank Pays
A1 $0.30 9.3 279 $0.24
A3 $0.25 8.8 220 $0.24
A2 $0.28 8.3 208 $0.25
A4 $0.25 7.6 190 $0.18
A5 $0.20 7.0 140 $0.20

That causes A3 to move up one position as it did when he simply increased his bid. He again affects A1′s payout but this time it is more pronounced. A1 pays one more cent than before. A1′s own payout increases by one cent instead of the two if he simply increases his bid. He therefore saves one penny by having a better ad. A2 has lost a position but paying three cents less.

A change of QS will have an effect on your payout but not as large as changing your bid. The moral is, always try to improve your ads for a better

Lesson 1 – PPC and Adwords Theory

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How Much Will I Pay When My Ad is Clicked?

I mentioned this briefly previously by saying you pay one more cent than the advertiser below you. In other words, if the advertiser ranked below you bids 21 cents, you pay 22 cents, assuming that is not more than your maximum bid.

This used to be the way Google calculated how much you paid. In fact, a few search engines (although they are rare) still use this Vickrey style of auction system. Google however has changed this formula and have even published it:

Cost = AdRank(b) / QS(a)

AdRank(b) is the ad rank calculation of the advertiser immediately below you. Keep in mind that the adrank calculation is their QS times their bid. QS(a) is your own quality score. So if both quality scores are the same, they cancel each other out meaning you end up paying your competitor’s bid, if it is equal or below your own bid.

So increase your QS, all other things being equal, you will reduce your costs. As QS is not related to your bid but to your CTR, the way to increase your QS is to create better ads.

More on Quality Score

After three pages explaining Quality Score, you’d think I’d have nothing else to say on the matter. But there is a few other things you should know and keep in mind about the QS.

In the previous sections, I showed how Adwords ranks ads by using your bid and CTR to calculate an ad rank. This ad rank in turn is used to calculate how much each advertiser pays. As mentioned, Google does not use CTR but QS. The calculations are all the same, simply use QS instead of click rate as I have done in those calculations.

But the QS you see in your account is a whole number between one and ten. It is very doubtful that Google uses those actual whole numbers. The QS that Google uses has much more precision and contains many decimal places. So, in Google’s eyes, your QS is more likely a number between 1.00000 and 9.99999, the QS you are shown rounded off. I also suspect that QS goes beyond ten in actual rank and price calculations. In the How Does Adwords Work section, I mentioned that CTRs are smoothed out to remove the effects of position. Mathematicians have words for this smoothing out called normalizing. This is done so that every advertiser is on a level playing field, no matter which position their ad is served, first or forty-first. Being in lower positions, ads are generally clicked less often, in absolute terms, than those in higher positions. It would not make sense to use the ad’s absolute CTR in the QS and subsequent calculations.

Quality score is also calculated relative to all advertisers for that keyword. This in fact is the whole concept of QS and one which you must know and understand. It is so important, it’s why I’ve highlighted this whole paragraph in blue. Continue reading

What is Quality Score?

So far, I’ve assumed the quality of an ad to be only its CTR. That was good enough to demonstrate the basics of how Adwords works. The reality is a little more complex.

As mentioned, Google invented what it calls the Quality Score to measure the quality of an ad. In fact, saying the quality of an ad is technically wrong. While we do talk about the quality of an ad, it is really the quality of the combination of the ad and keyword. The QS is calculated for each keyword-ad combination. The same keyword will therefore have a different QS for each ad in that group although that is not shown to you at that level. What happens when you have more than one ad? How is QS calculated if there are many ads and QS is calculated for each ad and keyword? Google simply averages out all the quality scores for all active ads. Of course, that means the QS for a keyword cannot be better than your best ad but neither can it be worse than your worst ad. It is also a reason you should test only two ads at a time. Having four or five ads with two bad ones will drag down your overall QS on a keyword. Having too many ads active at a time also does not provide a good testing environment.

While Google has never said exactly how the QS is calculated, they have made some information public, keep most of it secret but have also dropped some hints.

Quality Score is made up of three major components: the keyword’s CTR, the relevancy of the keyword to the ad and landing page and finally, other factors. What we don’t know for sure is the exact weight of each component. Again, Google has dropped some hints and has said that the CTR component is by far the largest. Continue reading