Google has announced a new AdWords feature promising to provide advertisers with more transparency into the ad auction.
The ad auction is the process by which Google determines the cost per click (CPC) amount an advertiser will pay for a click on their ad. Every time a query is made on Google, they run an auction. This auction determines the ads that will appear, the ad’s position, and the CPC that is paid.
For years advertisers have struggled to understand how the auction process works and have asked for more insights into the auction to help optimize for better performance. Currently Google provides competitive reports at category level (in the Opportunities tab) and impression share data, but now they will offer information to show how advertisers are performing in comparison to other advertisers who compete in the same set of auctions.
The new Auction Insights report answers the question about who competes in a given auction. It shows the display URL domain of the advertiser who is your competitor in that auction.
The report provides data at the keyword-level and, for now, can only be generated for a single keyword at one time. Data is also only available for keywords that meet a minimum threshold of activity for the specified time period.
It provides five different statistics: impression share, average position, overlap rate, position above rate, and top of page percent.
This key data compares you to your competitors in the auction.
- Impression share: Percentage of time your ad appeared for that keyword query.
- Average position: The ad rank for you and the competitive ads.
- Overlap rate: Percentage of time you and the competitor advertiser show up in the same auction.
- Position above rate: Percentage of time the competitive ad ranked higher than you in the search results.
- Top of page percent: Percentage of time that competitor is at the top of the page.
The data represents actual auctions the ad has participated in and other ads that have participated in the same auction. It is an aggregation of data of all auctions based on the time period selected when the ads appeared.
While this provides a great insight into the keyword performance, it doesn’t reveal the advertiser’s account settings like geo-targeting, keyword match type, or quality score. We only know that the ad was triggered by that search term. It could have been any match type, for example.
"No actual campaign settings are revealed, it's the same data you can get in the Google search results," said Bhanu Narasimhan, Group Product Manager, AdWords. "This report just makes it easier to access and understand the information."
Even with the added transparency into who is in the auction, there is still not any CPC bid information. Narasimhan said “advertisers concerned with showing up at the top of the page can see where they stand and if they want to increase bids or not.”
Initial launch of this report is for single keywords only, but has the potential to expand in the future.
The Auction Insights reporting feature will be released this week and will be available to all advertisers. Data will only be available back to May 1.