This interview with Fred Vallaeys of Optmyzr is part of our Convirza Webinar Series, where we interview marketing experts from across North America. To view the transcript of Fred’s entire presentation visit our webinar library. A transcript of the Q&A portion is available below.
Fred: So McKay, that’s my final slide. I will go into Q and A now. I’d love to answer any questions or hear from people what they’ve seen.
McKay: Good presentation, Fred. That was awesome. We’re getting a lot of good feedback coming over. Okay, cool, so this is a good question, I think sailing into the whole presentation. Scott asks, he says, “Can you explain a little more how Google makes more revenue when quality score improves?” How does that help Google and why ultimately, I guess that’s why we should care about it, right?
Fred: Exactly. Scott, I apologize that that one slide did the whole build kind of got messed up there. So, look at a typical online publisher. So assume for a second that Google is a publisher. They publish some content and there happens to be searches, for the most part. Now the way that an online publisher makes money is by selling advertising on their website.
Typically, historically that has been sold on a cost-per-impression basis. So for every page that loads, they can show a number of ad units and they get compensated regardless of whether the user clicks on those ads or not. It’s cost-per-impression. Now that was where the system was broken. You got all these irrelevant ads and so they weren’t driving results. People weren’t clicking on them. Advertisers were paying money but they weren’t getting results from it. So Google introduced quality score. Now quality score and CPC pricing is a little bit scary from a publisher’s perspective because literally what you’re doing is you’re saying, “I’m going to show ads on my pages completely free of charge and you only have to pay me if somebody clicks on these ads.”
Now you can see how that could go terribly, terribly wrong if you were a publisher, so you could show all the wrong ads, nobody clicks on them and at the end of the quarter you’ve made no money, right? Maybe you’ve doubled your page views, but the ads were all so bad that nobody clicked and you made no money.
So what Google did is they said, “We’re going to introduce quality score as part of the ad rank formula,” and if you look at, you know, what is cost-per- click, it’s dollars over clicks, or what’s quality score, effectively CTR it’s clicks divided by impressions, you multiply the two out, you find you’re actually paying dollars-per- impressions, which is effectively cost-per-mille, CPM. So Google did a brilliant thing. They maintained a CPM way for them to make money while giving advertisers a way to only pay for clicks and introducing the whole quality score or CTR mechanism. So I hope that makes a little bit more sense explaining that right.
McKay: Yeah, that does, make a lot more sense. All right, so we have some people asking about Google’s new updates that you discussed. Phillip asks, he says in the quality score announcement, Google specifically said it was reporting only. Do you think it is affecting CPC? How does that work? Does that question make sense to you, Fred?
Fred: Yeah, it totally makes sense. You know, somebody else pointed that out on the blog post I did. And so yes, Google says it’s a reporting only change, but I think the key thing that we’re seeing is, it’s basically changing the reporting for some of the newer keywords and so that tends to be some fraction of keywords in an account, and so the new keyword like I said, is not just a keyword that you have just added, but it’s a keyword with not enough data yet. And so Google seems to be assuming a different quality score for these newish keywords and so for those newish keywords, you are paying different amounts of money.
So the way that they judge them eventually remains the same. But we have seen some small fluctuations both up and down in terms of CPCs and those accounts. Now, you know, it’s very hard to track that back to purely this quality score change. I mean, there’s obviously other factors. There’s, you know, that we’re getting into the back to school season, you know, maybe people are spending more money. They’re coming back from vacation, so there’s all these things that are very hard to measure in this situation. But we do believe that there is a little bit of a CPC impact as a result of this, and it’s for those newish keywords which…And then this is the other interesting thing, like people should really take a look, even if you have tens of thousands of keywords in your account, you will notice that only a small percentage of those tend to get impressions on any given day that are eligible for quality score calculations.
Remember, it’s eligible when it serves on the Google search on either a mobile or a desktop device, or it could be a tablet too, so on any device, in the exact match variations. So a lot of people do kind of like these broader queries, and so that’s one thing that we track in the Optimizer tool. We show you how many keywords were served in that sort of exact match variation on Google search only. And so it’s that small set of data that Google has, but it means that many keywords that we think have some history, in fact from Google’s perspective or quality score, have very little history and it’s still guessing as to what those starting quality scores may be.
McKay: How does Google’s changes, if any, impact how they view landing pages? We’re getting a lot of questions about landing page value in terms of quality score and obviously that affects clickthrough rate which directly impacts quality score, but speak a little bit if you can specifically on landing pages?
Fred: Yeah, so landing pages always come up, right, and so in this specific change that Google made, there is no difference in how Google creates landing page quality. However, what it did say was the three subcomponents of quality score, so the ad relevance of landing page and the expected clickthrough rate, they all now go to average. Now I don’t know too many advertisers who tend to start off with a below average landing page quality score or an above average landing page quality score, but if you found that you tended to be one of those categories then this would have again, had a little bit of on impact because now Google assumes every new keyword comes with an average landing page quality. And as they get to those hundred-ish impressions, now they actually use what they know about the interactions that happened with the landing pages.
Kind of a follow up question that I assume a lot of people have because I get it quite frequently at conferences, is how does Google measure landing page relevance? You know, what could we look at and basically think about the type of data Google might have through something like Google Analytics, and you have this data too, right? It’s about user experience. It’s not about the content that’s on the page, but it’s how does a user perceive that content?
For the folks who advertise on Bing, Bing has been very strict about making sure that whatever keyword you are advertising has to be present on the landing page. They don’t do it as much anymore as they used to, but that used to be a thing for them. With Google, that’s not the case. You could advertise the keyword and not have that keyword appear anywhere on the landing page, but it’s still a very relevant page because you know, your keyword could be flowers, your page could be about roses and topically that’s relevant, right?
Maybe that’s what people wanted to find because maybe that’s the most popular type of flower there is, you know, for buying, And so think about bounce rates and how long do people stay on my page and do they seem to find what they’re looking for? That’s the kind of stuff Google would look at from a landing page quality perspective.
McKay: Interesting stuff. I think a landing page component, and this is just my personal opinion, but it’s among the most interesting facets of all this because it’s something that Google obviously cares a great deal about but it’s not directly related to something on their platform, you know? It’s really interesting that something as sort of removed as landing page has such a dramatic impact. So Fred, you’re awesome man. Thanks for doing this as usual. You’re great. Any final thoughts before we close up shop here?
Fred: Yeah, I mean so what you just said right, it’s you know…I’m blanking, McKay, but so, as far as the…
McKay: So my comment was so good that it…
Fred: Your comment was so good and I was going to tie it back into like, tracking conversions through phone calls.
McKay: Ah, yes.
Fred: But yeah, so make sure that…because I think your landing page is one of the bigger levers in terms of making sure you hit your actual KPIs of CPA and return on ad spend, right? So even if improving your landing page doesn’t have that big of an impact to Google’s quality score, it could have a dramatic impact on how much money you make and hence how much money you can afford to pay for the next click. So make sure you’re really doing conversion rate optimization and tracking all kinds of conversions, so not just sales but also phone calls, sign ups for your newsletter, and then figure out what that’s really worth, and then start optimizing against that, because that can be a huge impact on your business.
McKay: Great, great Fred. Thank you man, we appreciate it. And everybody, thank you for taking the time to attend today. We appreciate it as well.
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