The New Measuring Sticks
Earlier this year, Google announced that they would no longer be providing the “Average Position” metric on Google Ads. As with any change, the reaction was not positive. Message boards were flooded with comments proclaiming that the end was nigh, and we were all going to be thrust into a chaotic, post-apocalyptic scenario.
Average Position, while a tidy, easy to understand metric, was not telling the entire story. The newer metrics are providing both advertisers and their customers with more effective insights into their ad performance.
A quick recap of Average Position might be in order for the uninitiated. This metric showed, on average, where on the SERP the ad was being displayed. The idea was that if you had the correct bidding strategy, budget, and CTR, your ad would be served higher up, making it instantly more relevant. In theory, this is a great, simple metric you, as an advertiser, could show your customer. It was clean and effective, and as long as you were anywhere between 1-1.9, you were revered!
So why did it change? Well, simply put, the entire platform has changed. As I have covered before, the automated machine learning Google has been implementing over the past 2 years to the Ads platform has radically changed the game. New metrics needed to be introduced to create a more accurate and robust reporting dynamic.
Average Position couldn’t account for the new variables that automatic bidding started to provide, couldn’t tell the entire story that additions such as Rank Brain were bringing to the table.
So what is the new metric, and how is it better, more accurate, and more helpful to advertisers and their customers?
It is actually a collection of measurements, called “auction insights”, taking multiple factors into consideration. The measurements are Impression Share, Overlap Rate, Top of Page Rate, Absolute Top of Page Rate, Position Above Rate and Outranking Share.
Impression Share is the number of impressions you received divided by the estimated number of impressions you were eligible to receive. So, for instance, if you were eligible to receive 100 impressions, and you actually had 13 impressions, your Impression Share would be 13%. This metric is helpful to show you how your bidding strategy is playing out, whether or not you should change it, add or remove budget, etc.
How this is valuable to you as an advertiser is giving you more control over the performance of your ads. Also, the report compares you to your top competition and industry leaders. In the real estate space, for example, a company can see how they are performing compared to giants like Zillow, Redfin, Realtor.com and others.
For the customer, this gives them a more robust understanding of their position in their market.
Overlap Rate tells you at what rate a competitor's ad and your ad were shown at the same time. Why is this important? Well, it lets you know whether you are on the right track. Taking real estate as an example, if you aren’t overlapping with Zillow, you might not be running relevant ads.
As an advertiser, this is an extremely important metric. You can adjust the settings to see the local competition as well, giving you a more granular understanding of your performance.
For the customer, this insight provides a condensed view of who they are competing against, and how often they are in direct competition.
Top of Page Rate is just what it sounds like. How often did your ad show at the top of the page above unpaid search results.
For advertisers, this is a more clear-cut representation of what Average Position was attempting to tell us.
For customers, this is a bottom-line, no frills metric everyone can understand.
Absolute Top of Page Rate This is an even more exciting metric, as it lets you know how often your ad was the number 1 result on the SERP.
For advertisers, this is the culmination of a bid strategy, ad relevance, and other factors coming into play. A high rate here means you are onto something.
For customers, this may serve as a “vanity statistic” but it also lets you know you’ve got a great advertiser.
Position Above Rate helps you compare with your other auction participants. This lets you know how often you have ranked ahead of a competitor. Using real estate as an example, if you are looking at your brokerage in comparison to Zillow, and Zillow has a 7% Position Above Rate, that means that 7/100 times, Zillow ranked ahead of you.
As an advertiser, this is helpful, letting you know how you’re placing among competition in auctions you both qualify for.
For the customer, this insight lets you know if you’re being competitive with the right companies at the right times.
Outranking Share is perhaps the most nebulous of the metrics (Google was never going to keep it too simple, right?) Outranking Share is the number of times your ad ranked higher than another auction participant, plus the number of times your ad displayed and theirs did not, divided by the number of auctions you participated in. So what does this mean?
Essentially, this combines the number of auctions you “won” with the Position Above metric, and divides it by the total number of possible auctions you were eligible for. This tells the advertiser whether or not the ad relevance score could be improved.
For the customer, this provides you with a deeper insight into the auctions themselves, and how your dollars are being allocated.
So, on a macro level, what do these insights show? Let’s say you own an independent car repair business. And let’s say you are being outperformed in the Impression Share metric by a national brand. This might tell you to up your spend, or even change your bidding strategy. If you are competing with the same national brand, you might be on the right track with your keyword planning and targeting. Obviously if you are hitting a high Top of Page and Absolute Top of Page Rate, you are succeeding. If you have a low Position Above Rate, looking into the ad relevance score and improving it would help. And if you are seeing a low Outranking Score, it is time to make some major adjustments to your ads.
Average Position couldn’t possibly cover all of this. Even more insights are available when you start to parse out your performance in Google Analytics. Perform a Cohort Analysis to really see what is going on in a niche market.
Google has revamped their platform in such a meaningful and effective way in response to the issues that had been raised over the years.
Looking for a company to help maximize your ROI with Google Ads? POSH has you covered! Get in touch with us today!