CTR Influencing Avg. Pos at the Same CPC

[Waldo]

As CTR increases, Average Position should also increase at the same CPC.

How long will it take Google before it let's the CTR influence position/pricing?

for example:

Something with 2 clicks and 10 impressions has a CTR of 20%..
Similarly if there is another ad group somwhere with 200 clicks and 1000 impressions (still 20%) it should be more relevant because it is proven over time. Will Google take this into consideration? At what point will they begin weighing CTR heavily?

[gabs]

It will be based on impressions.. Along with impressions over time to..

yahoo told me that panama needs 500 imps but uses historical data to guess at first.. I assume google would be around the same BUT if it was me you'd factor in volume..

Hope that helps..

[netegg]

If you start a new ad group and want to pay less for your clicks and keep position you need to loss lead the ad group. If you go into a big auction with a low cpc the following will most likely happen:

1-the Google system will probably automatically force you to pay more as you do not reach the minimum bid requirement for the auction.
2-You will be on page 3
3-No visability vs your competitors will lead to a poor CTR, even if you get a good CTR on page 3 i.e 10 impr 2 clicks, the other people in the auction on page 1 are getting 1,000 impr 200 clicks, therefore you are not building better history than them.
4- Because you are at a low level it will have a detrimental effect on your campaign as you start to build bad history for keywords rather than good history.

The best CTR and history building positions are in the top 3 positions (Top banners). The CTR here and volumes of traffic are exponentially larger than being in a lower position, or different page.

In order to generate good history, get long term position and exposure you must push the campaign in it's infancy (Day 1) to 2-3 position, no matter what the cpc (limit the campaign daily budget to a manageable amount). This will cost a lot hence why I said loss lead it. But after a while if your ad is good and you landing page well optimised you will build excellent history, and the Google system will naturally discount your CPC for you.

Depending on the volume of searches for the particular keyword you bid on, will dictate the speed at which the CPC will reduce, but remember this process will cost a lot of money to start with, but in the long term reap the rewards of higher volumes of traffic at a lower CPC.

hope this helps,
netegg

[seostew]

If you start a new ad group and want to pay less for your clicks and keep position you need to loss lead the ad group. If you go into a big auction with a low cpc the following will most likely happen:

1-the Google system will probably automatically force you to pay more as you do not reach the minimum bid requirement for the auction.
2-You will be on page 3
3-No visability vs your competitors will lead to a poor CTR, even if you get a good CTR on page 3 i.e 10 impr 2 clicks, the other people in the auction on page 1 are getting 1,000 impr 200 clicks, therefore you are not building better history than them.
4- Because you are at a low level it will have a detrimental effect on your campaign as you start to build bad history for keywords rather than good history.

The best CTR and history building positions are in the top 3 positions (Top banners). The CTR here and volumes of traffic are exponentially larger than being in a lower position, or different page.

In order to generate good history, get long term position and exposure you must push the campaign in it's infancy (Day 1) to 2-3 position, no matter what the cpc (limit the campaign daily budget to a manageable amount). This will cost a lot hence why I said loss lead it. But after a while if your ad is good and you landing page well optimised you will build excellent history, and the Google system will naturally discount your CPC for you.

Depending on the volume of searches for the particular keyword you bid on, will dictate the speed at which the CPC will reduce, but remember this process will cost a lot of money to start with, but in the long term reap the rewards of higher volumes of traffic at a lower CPC.

hope this helps,
netegg


Great verbiage on explaining this phenomenon.

Thanks,

Neil

[Waldo]

You explain things well, but I didn't ask how to start a campaign. I was asking a question about CTR and when google starts to take it into account with avg. pos (with all other things being the same).

so quality score is good for both keywords, the landing pages are equally as relevant, they are both bidding $2max. Client A has a 4% CTR and Client B has a 3.5% CTR. Client A should be placed on top.. but A has 250 impressions and B has 10,000... Should A still be on top? It has no test of time...

A lot of answers on this forum end up assuming that people are brand new at this, or don't know a thing. Try and stick on topic next time.

[seostew]

You explain things well, but I didn't ask how to start a campaign. I was asking a question about CTR and when google starts to take it into account with avg. pos (with all other things being the same).

so quality score is good for both keywords, the landing pages are equally as relevant, they are both bidding $2max. Client A has a 4% CTR and Client B has a 3.5% CTR. Client A should be placed on top.. but A has 250 impressions and B has 10,000... Should A still be on top? It has no test of time...

A lot of answers on this forum end up assuming that people are brand new at this, or don't know a thing. Try and stick on topic next time.

It has been said that the quality score is reexamined at least once every 30 days. Since QS also includes historical KW CTR, not just from your account, but from Google's records over the years, I don't know if it is possible to give you an answer unless you know Google's full QS formula in which they don't publish those "other quality factors."

[netegg]

You explain things well, but I didn't ask how to start a campaign. I was asking a question about CTR and when google starts to take it into account with avg. pos (with all other things being the same).

so quality score is good for both keywords, the landing pages are equally as relevant, they are both bidding $2max. Client A has a 4% CTR and Client B has a 3.5% CTR. Client A should be placed on top.. but A has 250 impressions and B has 10,000... Should A still be on top? It has no test of time...

A lot of answers on this forum end up assuming that people are brand new at this, or don't know a thing. Try and stick on topic next time.

There must be a factor of time but to what degree of time Google resamples the data before processing the algorithm only Google knows. (The previous algorithm used to use 1000 impressions as its gauge before disabling your keywords). If in your example, Client B had 10,000 impressions as it had been advertising for a 6 months and Client A had only been going for a day or 2, Client A should still be number one, for the simple fact that at that time Client A's ad is better written as more people are clicking on it (based on the CTR you quoted), that is only, of course that within the last few days Client A has had a better CTR than Client B.

If the system is to work equally it is hardly going to compare a period of data of 6 months (Client B) vs a period of 2 days (Client A). As that would not make a relevant accurate comparison. The Google system resamples all the time to get the best ad top for that period of time. There is a simple reason for this as at anyone point in time Google has the best performing ad not only in terms of CTR but also in terms of making Google the most money at the top of the pile.

It does not make sense to Google to put Client B higher than A if the CTR is less and they are both bidding the same CPC, simply because Google will make more money from Client A.

Eg. 100 Impressions at $2/cpc

Client A gives Google $8
Client B gives Google $7.50

The system samples all the ads for a keyword based on a equal period of time. If you have just started in the auction you will not have much data for when google does the sampling for the algorithm, so you are at a major dis-advantage. So it's important that the data you initially create for the ad has very good history especially CTR.

CTR has a massive influence on the algorthm as it is the key factor for determining how much money Google actually makes:

Example. after 1 day and 1,000 impressions for the keyword 'keyword'

Client A, ad A
Max Bid - $2
CTR - 4%
Quality Score - Great

Client B, ad B
Max Bid - $2.50
CTR - 3.5%
Quality Score - Great

Client C, ad C
Max Bid - $1.50
CTR - 10%
Quality Score - Great

In this example it makes perfect sense for Client C to be number 1. For the simple reasons that it is the most relevant well written ad and it will make Google a lot more money than the other 2 ads. Using the most basic calculation you can instantly see why. If we multiply Max Bid price by CTR we come to a number X which I will call the 'Advertising Score'. The highest score should be placed in the highest rank. The results of this are as follows:

Client A
Advertising Score: 2 x 4% = 0.08

Client B
Advertising Score: 2.5 x 3.5% = 0.0875

Client C
Advertising Score: 1.5 x 10% = 0.15

so...

1st Place - Client C
2nd Place - Client B
3rd Place - Client A

True to form the ad with the best CTR (C) is invariable top, apart from B that is having to buy position with a poorer ad text. If we look at this from a Google money making perspective, you will notice ad C even though the CPC is a lot less makes considerably more money for Google after 1,000 impressions:

Ad A
CPC - $2
CTR - 4%
Clicks - 40
Max Spend - $80

Ad B
CPC - $2.50
CTR - 3.5%
Clicks - 35
Max Spend - $87.5

Ad C
CPC - $1.50
CTR - 10%
Clicks - 100
Max Spend - $150

Google's discounting system will automatically charge the bid price needed based on your CTR to hold position vs the rest of the field. As Ad C has such a good CTR in effect it will only need to pay $0.89 cpc to still make Google the most money out of the 3 ads. This is simply calculated by looking at the Advertsing Score of the ad below (Ad B) and finding the bid price needed to be a cent above them.

$0.89 cpc x 10% ctr = an advertsing score of 0.089 which is greater then B's advertsing score of 0.0875

The Quality score of the landing page simply determines whether or not you should be in the auction at all. Google uses this to determine what you should have to pay as a minimum bid to be within the auction.

To sum up CTR is the most important thing if you want to reduce your CPC, but remember this is all subject to what the other guys are doing within your space.

net egg