<new>This is an older draft that’s well past the date when people were freaking out about this change to the top position. However, I think it does give some insight into Google being able to both maximize profits and maximize the consumer experience</new>

I’ve been examining the changes to the AdWords Formula for top position ranking (From Inside AdWords) to discern it’s impact on advertisers, and while the change is subtle, there are a few items worth nothing.

Quote from the blog post:

The key change to the formula will be how we consider price. Today’s formula considers an ad’s Quality Score and actual cost-per-click (CPC). The improved formula will still heavily weight Quality Score, but instead of actual CPC, it will consider an ad’s maximum CPC.

When I originally saw this, it seem subtle. AdWords blog post states that there’s a larger pool of advertisers eligible for this spot – which I believe to be true. Advertisers are becoming more sophisticated, learning more about AdWords, and slowly becoming more sophisticated in general.

Therefore, it makes sense to give advertisers more control of showing for that top spot. By changing the formula to use the max CPC instead of actual, an advertiser can opt to ‘force’ their way to the top spot.

It must be noted, before one can force their way to the top, the ad must already meet higher quality score metrics than a typical ad. You will rarely see a poorly written ad, or irrelevant keyword ad, show in the top spot.

Then I read an independent research report from Merrill Lynch that stated Google might see a 2% increase in revenue due to this change. Interesting. The change does give advertisers more control, however, its also good for the bottom line. A win-win overall (and some will see this as Google trying to pull more dollars from advertisers).

However, what wasn’t mentioned in the blog post was how it will affect preferred cost bidding.

<added>Turns out not much. For preferred cost bidding, Google is determining much of the max CPC on the backend, and they are doing the same for this change</added>

As advertisers should be bidding to an ROI basis – does the formula change matter to those sophisticated bidders?

In May I wrote an extensive article on Search Engine Land about the various bidding options on AdWords. I followed that up with a compatibility chart to illustrate which bidding options are compatible with the various features of AdWords.

Due to AdWords changes in the past few months, the chart started to become outdated. I’ve just updated the chart to reflect the changes with AdWords.

Updated AdWords Bidding Methodology Compatibility Chart.

At times I can be a lone voice speaking about the effectiveness of the content network. As with all marketing (and most decisions), it’s not that the content network is inherently bad or good (and the same can be said for search). It’s a distribution channel that needs to be treated differently than other channels.

Differences between search and content

The engagement process is different from search vs content. Search is about an active consumer looking for information. Content is about advertising products or services next to content where the subject is related to your offer.

I’ve written an extensive article at Search Engine Land about this topic: Search Ads & Contextual Ads Are Different! You Need To Treat Them Separately. Please read the article, it will explain in depth about the two types of networks.

Why treat them separately?

The above article also goes into why to treat them separately. To recap, since they are so different, the stats of one network have no bearing on the stats of the other network. You may have a landing page with a 10% conversion rate for content, and that same landing page just does not work on the search network. Conversely, you may have very specific pages for search and more general product and informational pages for the content network. It all goes back to assessing your goals.

How to view search only Search or Content stats

When you run a report in AdWords, in the Advanced Settings there is a label for ‘filter your results’. When you click on this, you can choose to see only content or only search based information.

When you run reports that only show you search or content, suddenly your account statistics will become more clear. Remember, there are some stats that matter significantly less for content (CTR, conversion rate) that are more applicable to search. Where some stats, such as cost per conversion is one of the top statistics to analyze on the content network.

More Information:

• How to optimize a contextual campaign
• Google suggestions on the content network
• Content network and reports

Google recently introduced a new report this week, the Geographic performance report. Combine this report with AdWords conversion tracker, Geographic targeting, and Google Analytics Map Overlay to determine where your most profitable visitors are coming from. From there you can create dedicated location targeted campaigns to target your most profitable visitors, or to make special offers for locations where you are not performing well.

AdWords has a new interface to see quickly view some content vs. search statistics. You should already be treating search vs content separately and optimizing content campaigns. This is just a quicker view into some statistics that you had access to via the reporting interface.

If you use AdWords Editor (and you should be); there is a new PDF available from Google about the editor.

There are several known bugs where loading up a flash file will freeze a browser. This is common in IE8, Firefox, and even Chrome. There’s a simple fix: install adobe flash 10.x beta.

Please note, there are a few flash files around the web which will think you’re using such an old version of flash, it will ask you to upgrade to a current version. I’ve not seen this error often, but it’s worth noting.

Upgrading to Flash 10x beta

• For all non IE browsers (Chrome, Firefox, etc)
  • Visit the uninstall page and uninstall the plug-in
  • Visit the install page and use the ‘Download plug-in-in’ for whichever OS you have
• For IE…
  • First, get IE8. This is not a requirement, but IE8 has been stable through my use and is much faster than IE7. It’s actually worth upgrading to the beta product (but it is beta – so at your own risk)
  • Secondly, visit the uninstall page and run the uninstaller for IE
  • Lastly, visit the install page. You will want to run ‘ActiveX Control for Windows’ to install the new flash in IE

While Flash is a standard, if most of what you’re using flash for is to view YouTube videos, get the Better YouTube extension. One of the options is to use an alternate player that I’ve found to be more stable.

Google Chrome

I must admit my fascination with Google’s new browser (Chrome) wore off after trying to use the program for a few hours and I’ve never looked back. My issues had nothing to do with the privacy issues or TOS.

I like my plug-ins (which will be coming for Chrome). I regularly surf with both FlashBlock and NoScript installed so I can control what is being executed within my browser. I was amazed the Google Toolbar couldn’t be installed, nor other toolbars. I can’t imagine life without RoboForm. Not to mention the plethora of other plug-ins I use (which someday I’ll write about).

I didn’t find that it really worked as advertised. Google Analytics timed out on me several times and ‘crashed’ a tab. IE8 and Firefox ran Analytics just fine. Is there some additional protection going on in the script execution that is causing some site not to work well with Chrome?

While Chrome supposedly has the best Acid Test results (but I’ve heard that depends a lot on the OS), you can also run your own script speed benchmark on Google’s site. When I ran this test on my mini-laptop, Firefox beat Chrome on 3 of the 5 tests. Chrome did beat IE7 on most tests, but watch out for IE8 it just seems leaner than IE7.

However – and this amazes me – when I look at this site’s statistics, this is the browser usage since Tuesday (and my browser isn’t counted in these stats):

It’s easy to look at W3 to see their overall browser stats which look like this for August 08:

While I knew my audience was a bit higher in alternate browsers than the typical Internet audience – that’s a fair amount of Chrome users; especially considering I receive a lot of traffic from Google’s seminar page that is just general advertisers and not necessarily the early adopters of new products, such as the more technical audience which regularly reads this blog. I’ll have to wait a few weeks and look at the browser stats again. It could just be those testing out Chrome before returning to other browsers.

Browser Resources

And now for some resources you can use to ensure your site is cross-browser compatible:

Preview your site in IE8 (please note, IE8 also has a really cool tool that lets someone view the site in an IE7 compatibility mode)

Browsershots allows a lot of previewing, across different browsers, screen resolutions, and OS. This is one of my favorite preview tools.

Browsrcamp will let Windows users see see Mac Safari screenshots.

Browsercam is one of the most sophisticated tools. It also does mobile device screenshots.

W3 Screen Resolution information.  Don’t forget, a little more than 76% of clicks occur ‘above the fold’ and only 0.4% occur to the right (0.3% right above the fold, 0.1% right below the fold). Know your audience and their screen resolution.

W3 Browser Stats. Firefox is gaining ground faster than anyone thought it would.

Just Remember…

Always look at your stats; not just these averages.

If your audience is senior citizens on AOL dial-up with browser resolutions of 800×600; your focus should be on easily resizing fonts (no absolute fonts – this groups wants control of that arena) and quick loading images.

If your audience is Firefox 3.1 beta users with over 1900x screen resolutions on T1 lines; go ahead and use those high res photos.

Averages give you a starting place – Your stats will tell you what to do next.

I’m trying something new to see your reaction. I receive a lot of questions via email about PPC; in fact more than I can ever hope to answer. Some of them are much more popular than others – so I thought I’d try blogging the answers to various questions.

If you have a question, feel free to contact us with the ‘PPC Question’ subject.

Today’s question comes from an AdWords seminar attendee (don’t worry, I’m keeping the questioners anonymous) and concerns how location targeting and the content network work together on AdWords.

Location Targeting Overview

First a quick word about location targeting. When you choose a region, Google shows ads based upon someone being in that region or using geographic keywords which would show the intent to find information within that region.

For example, if you were targeting Chicago with the keyword hotel. Your ad could show in two situations. First, someone searched for hotel within the Chicago metro. The second way is someone searched for Chicago hotel.

In the first instance, the user being located inside the metro, this is an easy decision – location targeting equals user’s location and the ad is shown.

In the second instance, the assumption being made is that if someone is explicitly looking for information within a metro, then their location does not matter as their intent is to find information within that metro.

Hopefully that makes sense. If not, please comment or contact me and I’ll do a full post on the two location targeting options.

Content Network & Location Targeting

The content network follows all the rules set at the campaign level, and one of those is location targeting. So, in that instance the quick answer to the question is ‘yes, the content network displays ads based upon location targeting settings’.

However, there is also a slightly more ambiguous answer. The content network scans a page to find what the page is about to best serve ads. Therefore, if you consider the second instance above – someone looking for information within a geography, then it stands to reason that sometimes that may come into play in showing ads on the content network.

Therefore, if someone is reading a geographically based article, say about Chicago hotels, they may still see ads for Chicago hotels even though they are outside of that region.

If someone is reading an article about hotels in general, and they aren’t located in our example city Chicago, then they would not see the advertiser’s Chicago location targeted ad.

The Quick Answer

Don’t you love this is at the bottom of the post?

The content network follows all campaign setting rules.

Location targeting is a campaign setting rule.

If someone is within your target geography reading an article that corresponds to your AdGroup theme, then your ads can be shown.

If someone is outside your target geography reading an article that corresponds to your AdGroup theme and the article is about the geography your are targeting, your ads can show.

If someone is outside your geography and the article does not include your geography, then your ads will not show.

Due to to the upcoming changes to the Quality Score; I’ve updated the Quality Score Factors Chart to show what factors mater today and what will matter when the changes are rolled out publicly.

It would not surprise me if there was one last item that were changed before launch. The UI is being worked on via beta tester feedback, and based upon how everything goes, and quality score being as complex as it is, that one more small change to quality score calculation is modified by launch.

The AdWords Seminar for Success series is coming to Denver, CO.

When: Monday, September 8th
Where:Doubletree Denver

3203 Quebec Street
Denver, CO 80207

Agenda Timeline:

• Registration: 8:30 am – 9:00 am
• Morning Session: 9am-12pm
• Lunch Break: 12:00pm – 1:00pm
• Afternoon Session: 1pm-5pm

Breakfast and refreshments will be served.

Agenda:

Other Upcoming Seminars:

Hope to see you there.

• Denver Registration Page
• Google Information Page
• More about the seminars