Google AdWords Specialists

For some time I had been wrestling with this excerpt from the Google AdWords help material.

“Keyword-targeted ads are ranked on search result pages based on their maximum cost-per-click (CPC) and the keyword’s Quality Score on Google.com. (For the top positions above Google search results, we use the actual CPC.)”

The word actual bothered me.

I remembered the old, very straight forward, formula for Ad Rank; AR = Max Bid x CTR (clickthorugh rate), which gave way to the current standard formula: AR = Max Bid x Quality Score. Even though the formulaic details of Quality Score are veiled in secrecy, I understand and have embraced the basic Quality Score concept, and the current standard ad rank formula itself is straight forward enough. But when Google started talking about this other calculation for the top-blue spots, using the actual CPC, I started getting a little perplexed.

The way it was worded, I was thinking there was a separate calculation for ads appearing in the top-blue spots above the organic search listings. A separate calculation not only for position but also for the actual cost of the click. Since the top positions were important to a number of my clients I was determined to get as much clarity a possible.

After a number of rounds of emails and phone calls, over several months, I was still not satisfied. None of the explanations dealt with the elusive phrase “we use the actual CPC”. I just didn’t understand how the actual cost of a click could be used to determine position, prior to the click actually occurring. Thinking the actual CPC was being substituted for the Max Bid in calculating ad rank for the top-blue spots.

Thanks to an explanation from Ge****n (privacy respected) in Agency Support, I think I finally understand, or at least am temporarily satisfied with the delusion that I understand, Ad Rank when it comes to the top-blue positions.

Here was the a-ha moment for me.

The calculation is the same, but then additional filters – at least three anyway- are applied to determine which ads are ELIGIBLE for top-blue spots. And one of those filters is a minimum monetary requirement for the calculated cost of the potential click – ie “the actual cost” of the click. Another filter being a minimum Quality Score. We do not know what these minimums are of course. And in addition to these minimum thresholds the ads must be approved, as they are for content and site targeting.

This explanation lifted the fog; the formulas for calculating Ad Rank and Cost-per-Click were not different for the top-blue spots at all. But once those are calculated, then eligibility for the top-blue spots is determined by some application of minimum Quality Score and/or calculated CPC (the actual cost, if clicked).

There isn’t a huge strategic application now that I have split this annoying blue hair.
Relevancy still rules.

But now I can worry some other bone that only a wonk like me would think needs gnawing.
Sometimes though, the difference between profit and loss is in such obscure details.

-T