Google dials up quality score algorithms and marketers feel the effects
Google and its network are getting an even larger percentage of the money marketers are spending on paid search than their share of actual searches, according to new research from search marketing company SearchIgnite and investment banking firm RCB Capital Markets. In June, Google got 60% of the searches conducted across Google, Yahoo and MSN, but received 76% of the money spent by search marketers across all three, according to the report, “Market Share Trends within the Engines and Their Impact on Brand Marketers.”
By contrast, Yahoo earned 18.3% of the media spend on search across the three engines, though it received 34% of searches across its network for the month.
Google’s revenue per search continues to increase due to its ongoing adjustment of its quality score algorithms and minimum keyword bid requirements, according to the researchers. “Google’s second-quarter algorithm change continues to propel its leadership in monetizing search for large brand marketers,” says Roger Barnette, president of SearchIgnite.
Google’s quality score algorithms determine each advertiser’s minimum bid to trigger an ad on a selected keyword. Quality scores take into account such factors as click-through rate on an ad, ad text, and the layout and links on the site landing page to which the ad delivers the searcher. To get that information, Google AdWords technology visits ad landing pages.
A high quality score decreases the advertiser’s required minimum bid for a keyword while a low quality score increases it. Google in May made significant changes in its quality scores, assigning more weight to landing page quality, says Barnette. The move benefited large brand marketers while having a detrimental effect on many small advertisers, he says.
According to Barnette, Google made the change to squeeze out so-called “middleman” affiliates – those sites that exist to collect clicks on paid search and pass searchers through to a brand site while adding no other value. Such sites, often simple in structure, typically don’t have the links and content that rank high with Google’s quality algorithms. “It did a good job of that. Google is trying to improve the user experience to get its users closer to the products they are trying to buy,” he adds.
Many smaller advertisers fared less well under the change. While a small advertiser would not be negatively affected simply by virtue of its size, Barnette says, smaller marketer are less apt to have the resources to support a well-defined web site and a sophisticated search marketing campaign to meet Google’s quality score standards.
That means smaller marketers are being affected by the same changes affecting middleman affiliates, Barnette says. “A smaller marketer might bid on 100 keywords and send them all to its home page. A larger marketer might use an agency and manage 5,000 keywords, and have each one deep link to the actual product page,” he says. “Google rewards behavior that makes for a better search experience, and larger marketers tend to have the resources to do those things. What Google is doing is making it incumbent on smaller marketers to add some sophistication to their web sites. They can do that – it will just take some time.”
The study tracked more than 14 billion impressions and 185 million clicks on the Google, Yahoo and MSN sites from January 1, 2006, through June 20, 2007, across more than 500 marketers, all clients of SearchIgnite or its sister company, 360i.
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