March 5, 2019

Google Ads Competitive Metrics Using Murky Data to Increase CPC

In the old days, everyone focused on average position to get a feel for how their ads competed against everyone else.

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In the old days, everyone focused on average position to get a feel for how their ads competed against everyone else. Lots of people felt the #2 ad slot was the best option and used position-based bidding to focus on that spot. Obviously, you can’t have everyone be second, there has to be a first, third, etc. But even worse, this de-incentivized bidding for the top spot, which suppressed bids. Google’s stock swings on the average CPC going up over time, thus position-based bidding disappeared.

Fast forward a few years, Google started offering competitive metrics like Impression Share (IS), Lost IS due to Rank, Lost IS due to Budget. These were pretty helpful in diagnosing where you might have opportunity to grow a campaign by bumping up bids or budgets. It also shifts the discussion away from average position a bit. Maybe you were okay with your ads showing up 3rd, but you might not be okay with them only showing up 40% of the time. Better spend more!

Average position is now this…

More recently, the SERP has grown ever-more complex with increases in knowledge panel style results, shopping ads, local local local and all sorts of additional paid and organic experiences. Average position is legitimately less useful than ever, as there could be only one text ad above the fold. Thus showing up 2nd could mean you’re not even on page 1. IS is still a valid metric, but maybe less perfect due to all the variations in SERP layout. So Google introduced Top IS and Absolute Top IS. Top IS is essentially your above-the-fold rate with Absolute Top IS being your first ad on the page rate. Absolute Top IS feels like an ego metric, but the gap between that and Top IS is a good measure of how much room to grow a given campaign or keyword has.

But now we have Click Share. When I first saw this metric announced, my instinct was it would be kind of like clickthrough rate, but only for ads. Basically, (your clicks / all ad clicks for your impressions). That could be useful, but might give away more data than Google would like about exactly how popular ads are. But no, it’s a measure of your clicks vs how many clicks you potentially could have gotten, maybe. It’s an estimate. To me, this just feels like a way to encourage higher bids. If your click share is low, there’s really no clear way to know why, but you’re missing out on clicks! So you are told to increase bids (spend more), improve quality score (generally spend more), add more extensions (spend more).

That’s kind of the point of all of these competitive metrics, but this one feels the least helpful for the advertiser. The impression-based metrics give a much more concrete and factual view of how your ads are performing and where there is room to grow. The fact that this is based on a mysterious model makes it simply feel like a carrot to encourage more spend and provide little or unclear insight.

Maybe someone out there has a different view, I’d love to hear it!

What do you think?

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