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Auction Insights: A ‘Googley’ Take on Competitive Keyword Intelligence

Posted May 23rd, 2012 by Andrew Goodman

Advertisers being the curious, hypercompetitive lot they are, many of them can’t resist typing in “their” search keywords to see where they stack up visually against the competition. The problem is, that can be both time-consuming and misleading.

To feed this desire, tool makers provide similar functionality at scale, offering competitive intelligence reports by keyword or by competitor URL. The problem with that is, it generates a lot of automated queries to Google. Also, some of the reports are long on information but short on insight.

What is the point of this type of competitive intelligence? There can be many uses. In some cases, the idea is to discover all the keywords your competitors are advertising on. That might help you fill gaps.

In other cases it’s just a general question: who am I up against? What are they doing? How do we stack up, at least when it comes to appearing on the page for similar queries?

Perhaps to dissuade advertisers from using brute force methods to get the latter information, Google has rolled out a report called Auction Insights. In AdWords, the opportunity starts with a little bar chart icon next to some keywords. For higher volume or otherwise significant keywords, you can call up a full report of the advertisers who might oppose you on that keyword, sorted by impression share. From here, the key competitive stats provided for each competitor URL are: overlap rate, position above rate, and top of page rate.

Along with the “who’s who,” the specific stats give you a real sense that each keyword is different for you in terms of the universe of advertisers who might also show up when you do. Not all are advertising on the exact same keyword as you; they may be coming in through more general or more specific variants. Some are doing well, others poorly. It’s not easy to tell 100%, but experienced advertisers can gain from these reports an appreciation of who is really aggressive, who is confused, and who is just along for the ride.

The overlap rate is the percentage of times the other advertiser showed up when you did when this keyword triggered an ad for you. That in itself is a reminder that the auction is dynamic and personalized, budgets vary, and Quality Scores determine not only position on the page, but eligibility.

Position above rate is how often that other advertiser showed up higher than you on the page.

Top of page rate is how often the advertiser (and you) showed up in one of the premium slots above the search results, at the top of the page.

The report also indicates impression share and average ad position.

 

 

 

 

 

There is no typical keyword. That being said, going through a number of reports shows that in almost every case, and I mean very close to 100% of cases, even a very committed and aggressive advertiser will come in below 100% impression share, and will have cases where they’re surpassed on the page by other advertisers, or where they don’t make it to “top of page” or premium position.

The exceptions are certainly interesting! One very aggressive advertiser we work with has maintained an average ad position of 1.0 for a certain keyword, by design. The reports help deepen our understanding of what’s going on, and ideally they’d help us prove to the client that we’re really up there at all times.

From these new reports, we can see at a quick glance the other proof of the advertiser’s omnipresence (and almost always, dominance) on the page for that keyword: the impression share is at 100%, and nearly no competitor shows any “position above” rate at all. Two competitors do: at 0.05% and 0.02% respectively. Sure enough, it was those times when we got a call from the client, who does indeed type that query into Google daily just to make sure.

Will these reports dissuade advertisers from using third party services, or having their nephew type in queries all day long? Probably not. But they do provide interesting insights, and they’re very convenient to access.

A couple of additional takeaways:

  • Some advertisers appear to behave bizarrely, and the reports can provide further confirmation of that. For example, some advertisers are at the top of the page relatively often, but have a low impression share. Do they bid very high, but sporadically? Do they bid very high on even quite peripheral or broad queries, such that their query-specific Quality Scores vary wildly from search to search and from searcher to searcher? Large consumer packaged goods companies are trying to figure out the space, for example.
  • Government organizations and so forth behave a bit like that. While the other advertisers seem to rank on these metrics in the order reflected by their economic interest in certain keywords, their business models, etc., other types of advertisers “sprinkle money around” in order to raise awareness in a random fashion. Their budgets aren’t big enough to have high impression shares or high ad positions most of the time, but they get in there just enough to disrupt the auction and drive up prices for anyone near them in the auction. In general, advertisers who don’t measure exhibit head-scratching behavior and should maybe consider switching everything over to display. :)
  • Frequent sightings of Amazon, Wal-Mart, etc. shouldn’t be a surprise, but companies like ask.com, info.com, and so on, are all over the place. Local listings providers are also doing the same, focusing on popular local search categories so they can support their own advertisers. The low level, look-the-other-way click arbitrage is back, and is part of the overall reason Google has seen declining aggregate CPC’s. Google is making more money overall by letting the “info” sites play in areas they had been stricter about in the past. But on a number of those queries they must be willing to take lower CPC’s.
  • Speaking of click arbitrage and related business models, these reports have the effect of “outing” certain companies that pretend to be in the business of providing services or content, but for whom a large percentage of their revenues probably come from advertising. Why would Marketing Company X be advertising on keywords for certain cancer treatments, anyway? A hybrid business model that marries low-margin, commodity services with a high-margin, gray-area strategy of buying cheap clicks on Google can look pretty good on the surface, which is why one such company currently trades publicly at a valuation of $250 million. Don’t try this at home.
  • Put that insight together with the possibility that one of the three components of keyword Quality Score — ad relevance — can be tuned on a dime, based in part on shifting definitions of Quality vis-a-vis Display URL (hypothetically, a handy way of indirectly green-lighting or red-lighting ‘an entire advertiser’ while still using a ‘formula’) — and you can see how Google might potentially be able to subtly offer Quality Score help in exchange for certain quid pro quos. For some arbitrageurs and affiliates, it’s “red light” all the way, yet for others, it’s “green light,” or at least yellow enough to allow them to show up millions of times on marginal queries across all sorts of keywords. Am I barking up the wrong tree? Well, just visualize me in Columbo’s trench coat wearing a tinfoil hat, then. Or invent visions of your own.


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