© Jellyfish Online Marketing Ltd 2011

Jellyfish POV The Google PPC Algorithm Change 14| 10| 2011

Jellyfish POV The Google PPC Algorithm Change

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Google to change PPC Algorithm Google are in the process of making what could be the largest publicised change to their PPC algorithm in recent memory. By changing the proportion of quality score weighting to make landing page relevancy of more importance, Google are moving away slightly from their traditional time-honoured gauge of click through rate (CTR) as the primary metric for an ads success. Jonathan Alferness, Director of Search Ads Quality for Google, AdsForSeach has said that Ads with high landing page quality will get a ‘strong boost’ upward in the auction.

Balance of Algorithm key factors

Google have stated previously that CTR makes up 60% of their quality score calculation, with the rest coming from relevancy factors (previously 30%) and landing page quality (previously 10%). Advertisers will continue to be frustrated at the lack of visibility surrounding these factors, but having landing pages that are relevant to the search query, the keyword and the ad copy, as well as the site being fast to load and easy to navigate, will be rewarded more than previously. CTR makes perfect sense to use as a deciding ‘best’ ad measure. Advertisers with more recognisable brands will naturally get a higher CTR, those who take the time to correctly manage their PPC campaigns will be rewarded with more interest from searchers in their ad, and it stops advertisers with less relevant ads appearing and reducing the quality of the links on the results page and the user search experience. More cynical analysts see using CTR as such a high proportion of quality score as simple profiteering on Google’s part – it makes more sense for them to get two clicks on an ad worth 60p than one on an ad worth a pound. Moreover, it’s also better for them to have a click on a paid link than a natural one that won’t earn them revenue. In 2010, Google’s global revenue from Google owned websites totalled $19.4 billion. Therefore it’s in Google’s interests to incentivise users to write better ads. So moving away from CTR

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as a quality score component may cause surprise in some areas. However CTR doesn’t ensure that the users will necessarily have a better experience once they get to the landing page.

Why more than Click Through Rate is so important

Google are constantly tweaking their natural results algorithm to provide better organic results for the user. The objective of the recent natural search Panda update was to remove aggregators who give a lower quality of experience from the natural results. The irony of doing this is that it could potentially lead to more users clicking on the natural links (which do not generate revenue for Google directly) instead of the paid links, hence reducing their revenue. Even if the ad looks appealing, there is a risk that users could lose faith in sponsored links. Google seems to be addressing the problem by demonstrating they take user experience seriously no matter what search link, natural or paid, the users use. The average PPC advertiser is likely to be more concerned with CTR than landing page quality. It is of course much easier to write a better ad which will automatically be shown more if it garners a higher CTR, than to change landing pages and perform landing page tests.

The challenge to Agencies and Clients

This therefore provides a slightly greater challenge for PPC agencies, many of whom do not see landing page optimisation as within their remit. Jellyfish differ from many agencies in the fact that we understand the importance of user experience, and as a performance agency we have always consulted and advised clients on providing landing pages optimised for conversion and giving the best experience for their customers. Despite the change however, PPC advertisers should still optimise their landing pages for conversion to make the most of their advertising spend. PPC in its nature is better suited to generating revenue than the natural links, which lend themselves more to brand building strategies. So advertisers should be careful not to hamstring their campaigns

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by developing landing pages they think may be better from Google’s algorithm’s perspective but that convert less well. Being more concerned with quality score and not sales is a mistake advertisers make all too often. It seems CTR will remain the main component of the quality score for the foreseeable future, not only for profit maximisation reasons, but also because it’s a good way to reward good advertisers and keep sponsored links relevant. As with any change to the algorithm, Google’s intention is to deliver a better quality of service to its customers – and by customers they mean the people searching, not necessarily their advertisers. Therefore any change that rewards PPC advertisers who don’t concern themselves solely about CTRs but about the whole customer journey will be welcomed by Jellyfish. Mark Deeprose, Creative Director at Jellyfish, whose team have responsibility for landing page design and development, states ‘We have always believed that a successful PPC campaign didn’t just end at the point of click and that well designed landing pages that clearly communicate the proposition and provide value to the users are an essential part of any effective strategy’.