If you have noticed changes in your AdWords Cost-Per-Click (CPC) then this could be due to changes in Ad Rank thresholds. Ad Rank, or your ad’s position on the Google search results page, is determined by a number of factors. Ad Rank is a combination of bid amount, auction-time measurements of expected CTR, ad relevance, landing page experience, and the expected impact of extensions and other ad formats. Google sets a minimum Ad Rank threshold for ads to show, therefore it’s possible for no ads to appear if they rank below the minimum threshold. To improve your Ad Rank in order to show on the top of the first page of search results, you can increase your bid, improve the quality of your ads and improve the quality of your computer and mobile landing page experience.
Since the beginning of May, AdWords has been adjusting its new thresholds for two important factors. The first is related to the meaning of the query which, surprisingly, has never been a threshold factor until now. The second is the “bid” which may be weighted more heavily now in the Ad Rank formula.
It seems that Google has now included context in its formula. For example, it will take into consideration if a query is about recent news, versus a consumer product. Consequently, the Ad Rank thresholds for ‘recent news’ and ‘consumer products’ may be different since the query meaning is not the same. This change can result in more ads for some queries and less for others due to the level of the minimum threshold.
Google officials have announced that bids will play a more significant role in Ad Rank which means that it has become even more important for advertisers to manage and optimize bids to acquire the desired Ad Rank while at the same time meet performance goals and maintain cost efficiency. What’s more, this new change will most likely increase CPC costs for highly competitive keywords since advertisers will have to increase bids for better positioning. It will no longer be only a matter of improving quality factors in order to achieve a better position, now with the bid being weighted more, advertisers may have to pay more for a coveted position on the top of the first page of Google’s search results.
The PPC team at Savvy Search Marketing, as always, will monitor closely these changes and manage keywords and bids accordingly in order to keep any possible CPC increases under control and maintain top positions for our clients’ ads. It’s important to keep in mind that even if the weight of bids has increased, they are only a small component of the Ad Rank formula. As a result, we will continue to produce campaigns and ads of the highest quality possible in order to provide the best user experience for our clients’ target audience. By maintaining quality at the highest levels possible, we will be able to obtain top Ad Rank positions and help our clients achieve success. If you have questions regarding this issue, please contact us today.