24 Jul 2012

Inside Look On AdWords Auction Insights

July 24, 2012PPC Advertising

For years, advertisers have complained that the Google AdWords auction process is elusive. Sure, you know that every time a search query is entered by a user this initiates the bidding process. After this so-called ad auction occurs, the result culminates in either your ad appearing in a specific position or not at all. You know that there are a lot of cogs moving in an intricate system, but can you decipher exactly what decides your ads’ CPCs, positions and it’s appearance on Google’s network? Learning more about this auction process will keep you in the know about your direct competitors and improve your success.
It used to be that you could only gauge your own ad’s activity within the auctioning process. You were able to, and still can, review competitive reports that exist on the category level, as well as information on impression share. These are located within the “Opportunities” tab, which you will also visit when deciding how your keywords are meant to interact with bids, or to increase traffic to your ads. In addition to these existing features, you now have the ability to monitor your ads’ performances in relation to competitors in the same ad auction.
This new report, titled Auction Insights will give you the ability to see whom you are competing against in any given auction. You will be able to see the competitor’s domain URL – for the first time you have a sense of identity to place with your competitor. The report is available at the keyword-level, pending that the keyword has accumulated an appropriate amount of activity for the time period in question.
This report measures across five components: Impression Share, Average Ad Position, Position Above Rate, Top of Page Percent and Overlap Rate. You can see how you measure up to your competitors across these platforms. Impression Share measures the percentage of time that your ad appeared as a result of a keyword query. Average Ad Position is just a term for your ad rank in comparison to those of your competitors. The Position Above rate will inform you for how long a competitor’s ad ranked higher than yours in search results. Top of Page Percent references the amount of time that a competitor’s ad appeared at the top of the page. Finally, Overlap Rate refers to the actual amount of time that you and a competitor exist within the same auction.
While this is a great improvement to the somewhat vague auction reports that existed before, it is still not a complete observation of everything that is occurring within an auction. For one, it is just a measurement within a given amount of time, and all of the information is cumulative. The reports are also lacking details about the competitors’ account settings. Things like match type, geo-based targeting, and quality scores have no place within these reports. The only information that you can be certain of is that a certain search query spurred the display of said ad. The competitors’ ad may have indeed had the higher QS, which would have in turn affected the auction. There are still a lot of assumptions that you are left to make and blanks you are left to fill in.
Use these reports as a way to better understand who you are up against in these auctions, but don’t fail to realize that many of the details are missing. Campaign settings are left unrevealed, and even though you might have a sense of the advertisers whom you are competing against in an auction, you still do not have access to CPC bid information. Increasing bids could just as easily better your ad position. In other words, always remember to go back to basics if you feel that your keywords or ads are performing poorly. Don’t use these reports as a crutch, or you will be left with many unanswered questions. Instead, use Auction Insights as a way to better understand who is beating you out for preferable ad positions and use that information to improve your PPC campaigns.