Along with the recent organic ranking improvements Microsoft has made to Live Search, it has also tweaked the algorithm it uses to rank ads. The quality-based ranking algorithm is now less rigid, according to a post on the adCenter blog. This will allow more advertisers to get their ads into one of the top positions above the organic results, which Microsoft refers to as "the mainline."
Ads must meet a certain quality score to be considered for the top spots. Among those contenders, the algorithm will consider a combination of click-through rate and maximum bid. Microsoft warns advertisers that ads may move in and out of the mainline position, which may or may not be affected by max bid.
All of our quality-based ranking improvements have been made in the context of the overall search experience -- we will take both the paid and organic listings into account when assessing the overall experience for the searcher, while at the same time endeavoring to balance the needs of the advertiser.
Over time, we will continue to improve the paid search listings on Live Search, specifically focusing on:
* Quality of ads – that the ad copy aligns with offer, landing page and search term
* Quality of advertisers – that the advertiser is offering unique and valuable goods, services or information
* Quality set of overall listings – that the overall result set is unique, extremely relevant, high quality and the best value for the searcher
Google made a similar move to change the way it calculates ad placement for its top ads in AdWords. For Google, the Quality Score continues to be weighted heavily in the calculation, but now the formula uses the advertiser's maximum bid CPC instead of the actual auction-driven CPC to determine which ad will be shown in the top spot.