Google announced two upcoming changes to Quality Score (QS) on the AdWords blog on Thursday.
One change improves how Google estimates click-through rates.
The other change introduces a "hop-scotch" algorithm for picking ads for the top of the search results page.
We'll allow an ad that meets the quality threshold to appear above the search results even if it has to jump over other ads to do so. For instance, suppose the ad in position 1 on the right side of the page doesn't have a high enough Quality Score to appear above the search results, but the ad in position 2 does. It's now possible for the number 2 ad to jump over the number 1 ad and appear above the search results. Inside AdWords, 10/30/08
Does anyone else find that explanation boggling? Makes me wonder if pigeons rank the paid listings too.
Google sells four times more ads than anyone else online. QS is central to how those ads are sold. QS determines what each advertiser pays per click. QS determines how many clicks each advertiser receives. But QS is a black box. The details of the algorithm are secret. Sure, QS depends heavily on CTR, but it isn't just CTR. Vague issues like "other relevance factors" (what does that mean?) are also folded in.
With all due respect to Hal Varian, I'm challenged to call Google bidding a true "auction" because bidders aren't provided the relationship between bid price and winning. Pay more and you usually get more clicks -- we all understand that dynamic. But there's a large amount of implicit trust required: "Rest assured Google always chooses your pricing and position to maximize Google
revenue user happiness". Got it.
Paid search is a remarkable advertising mechanism. And Google is an amazing company. Google dominates search, deservedly so. But please, please, Google, consider providing more transparency into quality score, pricing, position, and the click auctions. Done well, all sides could benefit.