With the announcement of upcoming changes to Google’s Smart KeyWord Tool, I was looking forward to writing a brief but positive post about how I thought this would impact advertisers, which I could then follow up shortly after the change is instituted. 'Cause I mostly like Google. No, really I do.
But then I encountered another issue. When one of my clients was unhappy because he wasn’t seeing his ads, I called Google (again, I had to talk to several people before I got one who would help… and my rep never did return my call or e-mails. I wonder if he’s even still working there.) One of the explanations offered was that the campaign may have been effected by regional variations in ad service. (I thought, "What's this? Dang, has Google snuck up and whumped me again when I wasn’t looking?")
About a month ago, Google made some changes to their algorithm which make the position of ads vary depending on the local click-through rate. So if the click-through rate on a term is low in Seattle, the ad may be served up in position #10 to searchers in that area, whereas if it’s strong in Dallas, it may be #1. This localization may (or may not, you know - can't actually tell you) be as specific as a single IP.
The rep suggested that my client may not be seeing his as because he had searched on the same term too many times, unintentionally spamming himself. While this sounded good for a moment, it doesn’t explain why his ads would be effected more than his competitors. Clearly I didn’t understand how it worked… so I decided to do a little research.
What I found was not any clearer explanation. What I found was many advertisers who are having problems which seem to be attributable to this algo change, and a great deal of confusion.
The first and biggest problem: There was no announcement of the change. A year prior, there had been a vague announcement of "series of ad quality improvements designed to provide the most relevant, targeted ads possible," but more recently, not so much as a “we’re instituting some changes this week, and you may see fluctuations.”
In fact, this is still not something that I can find in the AdWords FAQs. Since it has not been announced or explained to all advertisers – most will never figure out why on AdWords they see an average position of 1.8 and then consistently see their ad at #12, or not at all, when they check. It will be hard for the poor employee who is not a specialist but is responsible for PPC to explain to their boss why he or she is seeing rankings that don't match the data.
Even more savvy advertisers were confused when they found that although the stats on Google showed an average rank of, say, 2 – they were not showing up at all when they searched. Many of them raised their bids as a result – artificially inflating CPCs and raising the cost per acquisition.
This change lessens the control an advertiser has over how his ad runs and how efficiently it runs. We cannot accurately monitor rank in comparison to competitors. We do not know which regions the ads are actually even showing in, or at what actual rank I those regions. We see only an average. That average may be skewed higher, because the regions where the ad is running in the top spots will get more impressions and clicks… so you may be #1 in one region and #10 in half a dozen. Hard to tell.
Ads are being served up based on statistics we can neither see nor effectively impact. Advertisers do not have access to the regional stats, nor can they adjust bids or copy regionally.
Since the algo is based on CTR, not conversions, some advertisers are finding their conversion rate dropping and/or their cost per conversion going up. Keywords may be showing in the #1 position in areas, and getting a high number of impulse clicks. Many of us would prefer not to be in the number one spot, and base out bidding strategy on aiming or a lower spot. As it stands, we have no way to prevent being put in top spots and getting more junk clicks. (Allowing advertisers to set a max position might help with this.)
Finally – there is the mystery of why an advertiser searching on their own terms would negatively impact their rank relative to their competitors. Assuming all the ads are served up, and not clicked on, why would they not all be effected equally, and thus remain in the same relation to one another? Yet this has been offered by Google as an explanation, and seems to be experienced by many advertisers.
The clearest explanation we’ve gotten is that there are any number of filters which may or may not be applied to any user’s search such as IP, search history, geographic names in the search term, and many others. (Hey, if any of you can explain it more clearly, or has suggestions on how to monitor it - help a girl out and let me know!)
As it turned out, regional differences were not the problem my client was having at all… (yes, the Google rep who suggested it was incorrect) but it seems that many others are. I would be interested to see if I can find any fluctuations in the recent history of other clients, whose cost-per-conversion went up around the end of June, which may have been attributable to this change. Were we Google-whumped when they changed the rules without telling us? With no announcement that the product we are paying for was now functioning differently – how would we have known?