Google announced today that it will be updating its ad ranking algorithm for AdWords, and making that process a bit more transparent for advertisers.
Before the end of the month, Google plans to implement an improved quality-based bidding system, updating the current AdRank algorithm that first launched in August 2005, and has been updated consistently since then.
The last major updates came in December 2005, and again in July 2006, in the form of landing page quality scoring additions that left many advertisers upset with Google's lack of information regarding how that quality score was reached. Another ad quality update in November drew criticism for making changes in the midst of the busy holiday shopping season.
The changes this time around will not add new elements to the score, as much as change the weight that each component receives in the scoring, Nicholas Fox, senior business product manager for ad quality, told SEW.
"This is a change to the algorithm itself, updating what we call 'prediction confidence' to improve the accuracy in determining quality score in cases where we have less data," Fox said. In effect, Google is becoming more lenient with ads that it knows nothing about, but could become stricter with ads once it has gathered some data, he said.
The quality score will continue to take into account the historical performance of a given keyword, relevance of keyword to ad text, landing page quality, and other factors. The biggest change will show up for newer, or low-traffic ads, for which there is not a lot of data to come to a conclusion on the ad's quality, Fox said.
The net effect could be the re-activation of many keywords that were previously deactivated when their minimum bids had risen above the advertiser's desired cost-per-click (CPC) bid. As those minimum bids are recalculated under the new algorithm and fall below the advertiser's bid threshold, those ads will be reactivated, unless the advertiser deactivates them or lowers their bids below the new threshold. In other cases, certain ads will be treated more harshly under the new algorithm, and their minimum bids will increase.
To help advertisers prepare for the changes, Google is adding a new quality score column to the advertiser's AdWords account interface. Beginning Thursday, advertisers will be allowed to activate the new column on their accounts, and begin making plans for the new algorithm. A limited test group of advertisers began seeing this column around Christmas.
The tool will show advertisers an estimate of their ad's quality -- in general terms like "great," "ok" or "poor" -- as well as the estimated minimum bids associated with them. The scores and bid estimates will be updated at least daily, with more frequent updates in certain categories.
"Advertisers have asked us to provide more transparency into the process, and now we're able to provide that visibility," Fox said. "This is the first step of many in that direction that you'll see in the next few months."
Though Google was the first major search engine to incorporate a quality score in its ad ranking algorithm, it has since been followed by Microsoft's adCenter and Yahoo's Panama platforms, both of which include a quality metric with varying degrees of transparency.
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