AdWords: How Google is Making Changes to Ad Rank Thresholds

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Since the beginning of May, Google has been making changes to the way it ranks ad thresholds within a PPC campaign, meaning cost per click (CPC)s within AdWords have begun to fluctuate in price. This has influenced Google’s minimum threshold requirements regarding where an ad sits on a landing page, which will then dictate how users will interact with the ads.

Ad Rank determiners

An ad’s ranking will determine where it sits on a page. This is based upon a number of factors, including the calculation of max CPC; the expected CTR (ratio between users clicking and viewing an ad); the ad’s relevance, and the landing page experience.

By treating thresholds as minimum requirements, thresholds therefore need to be higher if an ad is to appear on the first page of results, whereas ads that meet lower threshold requirements will sit at the bottom of the search results page.

Changes to Ad Rank thresholds

Meaning of the query

Although it hasn’t been a factor in the past, Ad Rank thresholds can now be determined by the meaning of the query searched. However, this change doesn’t affect how bid adjustments are treated, which is beneficial for those who work in the industry.

In light of this change, Google are now taking context into consideration. For example, based on keyword focuses, Google will now determine whether a query is news-based, or if a consumer product has been searched.

This change will therefore increase or decrease the number of ads shown depending on the searched result. Since the query meaning will differ from search to search, the Ad Ranks threshold will be affected. For example, news-related queries will have higher thresholds, as fewer ads will make the minimum requirement in comparison to ads based on a product-related query.

Heavily weighted bids depending on query-meaning

These changes are working in tandem; depending on the query meaning or category, bids may be more expensive. Issues of quality have always been a major factor when determining the Ad Rank threshold, however, for some queries maximum CPC levels may hold more weight based on certain types of queries.

This means that even though keywords continue to have high quality scores, bids may carry a larger weighting in the overall Ad Ranking for some queries. This may become problematic, as even though the quality score of a keyword hasn’t fluctuated – the actual CPC may increase. If bid factors are being weighted more heavily in comparison to quality – then the demand for certain keywords may increase, driving up costs.

Changes are preliminary

These changes aren’t set to occur or have an impact until the end of May, however, with the addition of Google’s new historical quality score data, you may have experienced fluctuations to CPC.

If this is the case, you will now be able to witness CPC changes based on keyword quality information on a day-to-day basis, but until Google implements these changes fundamentally, it will be difficult to comprehend how significant a change this will for future PPC campaigns. To learn more about these developments, get in touch today and find out how Mediaworks can help you.


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