Merkle Confirms Google Ad Rank Changes Impact Minimum Search Bid Estimates

Merkle has confirmed that it has seen a shift for first-page and top-of-page minimum bid estimates after Google said in May it would make adjustments to its ad auction model.

At the time, Google said the changes would focus on the way it calculates the minimum ad ranking required for an advertiser's content when serving up on the top of the first page of results, as well as how an advertiser's ad ranks are calculated. 

Brand estimates are trending lower and non-brand estimates are higher for the period following the early May update compared with previous estimates, Andy Taylor, associate director of research at Merkle, wrote in a post.

Taylor explains how the brand cost-per-click (CPC), compared with the month ago-quarter, has been trending lower since early May. For non-branded keywords, CPC YoY declines fell slightly since the update. He said this could also be part of a trend happening during the past first few months.

If the updates to non-branded keywords were to increase the cost of traffic for some words, advertisers would be forced to cut their budgets in some areas to maintain the same return on ad spend as prior to the change.

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"It's not clear that CPC would necessarily go up as a result of these changes," he said. "By comparison, brand keywords typically aren’t held to strict return on ad spend goals in the same way non-brand keywords are, since brand terms typically convert at very high rates and part of the goal of these ads is brand protection."

Taylor also points to major declines in traffic in May for tablets, which only accounted for 10% of paid-search clicks in the first quarter of 2017. There have been no negative impact to ad clicks on phone and desktop traffic.

Taylor also mentioned that there have been no shifts to the quality score being calculated differently, although Google’s ad rank changes do appear to be impacting minimum bid estimates for both branded and non-branded keywords.

 

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