Google needs to appeal to advertisers and searchers and therefore operates differently from a traditional auction which is based entirely on bids. Google uses a second price auction which means advertisers do not pay full bid; instead they pay only the amount above the bidder below them. However, the order is not based only on bids, it includes other factors.
Google evaluates the expected click-through rate if an ad is shown, whether the landing page includes relevant content that helps the user complete the task that brought them to Google to begin with, whether an ad is relevant based on the language of the ad and the keywords used by searchers. Ad extensions matter in this auction process because they give users more information and more reasons to click on an ad if it is relevant to what they need. You are constantly competing with other advertisers based on your click-through rate, landing page, and ad relevance – all working together to determine your ad rank. As ads are optimized, the position of an ad can improve and potentially have a lower cost per click. For more information about this process, Hal Varian, Google’s chief economist, further explains how the AdWords auction works walks through an example.
After campaigns have been running for a while and collect some data, PPC experts can learn how they compare to the competition with Auction Insights in AdWords (or Share of Voice in Bing). This data is based on the current performance of existing campaigns and traffic a campaign is eligible for in the auction. These metrics are very helpful for benchmarking against current account performance.
Auction insights are your specific competitors and how you compare to them. Auction insight metrics are available at the campaign, ad group and keyword level and can be viewed in the standard interface or added to reports. A word of caution though when viewing broad match keyword data. The share for broad match is anything that matches at the broad level with all the potential variations and word order. As a result, it can include irrelevant keywords in your impression share. Exact match varies in that provides a share as if all the keywords were the exact term. If there is no discrepancy with broad match impression and exact impression, PPC experts need to revisit the keyword strategy for that campaign.
In this Auction Insights Report, there are several metrics for PPC experts to review and use when optimizing accounts.
Impressions share is the number of impressions received divided by the number of impressions eligible to receive. Note that this metric is based on eligible auctions not all auctions. It is about the audience you are targeting based on your keywords along with other factors mentioned earlier for AdWords auctions.
If there are a significant number of impressions but very clicks, it indicates that paid ads are getting exposure but not drawing in the right audience. There could be an issue with ad copy or perhaps keywords need modification. A good keyword is not enough. Search Engine Marketing (SEM) is about demand harvesting. PPC experts need to find the person where they are and draw them into the funnel through compelling messaging.
A high average position is a good thing, right? Well, yes and no. Being in the top three of the search results is very important now that the right side of the search screen no longer displays ads. However, it could mean that you are also paying too much much for a high position. This is why you want to compare your AdWords data to your competitors’ data to make decisions about your campaigns as a whole, including your bid strategy.
Overlap is how often you show up with your competitor. This metric if often similar to the metric in the impression share column.
Position above rate and top of page rate
View these metrics together and in conjunction with average position. You not only want to be at the top of the page, but you also want to be above your competitors.
PPC experts use this metric to see how often they outrank competitors. This metric should be viewed relationally to see if it changes over time in terms of ranking order, especially with competitors that have a similar impression share.
If you download this auction insights data into a spreadsheet, you can calculate the impression share times the position above rate to get even more insights from this report.
The auction insights report has a lot of opportunity for a competitor analysis directly within Google AdWords using actual data. PPC experts can compare two date ranges for performance build lost impression share models, and view lost impression share that may occur due to budget and ad rank. With sampling, time, and volume, it won’t be perfect auction insight data. As explained in the introductory video, there are a number of factors that go into the AdWords auction and this is a moving target.
Prepare for fluctuations if significant changes are made to an account or if a campaign uses mostly broad match keywords which makes ads eligible for more auctions. Auction insights does not automatically account for seasonal trends either. This is when PPC experts need to use their outside knowledge about an account.
The device segment should not be overlooked. PPC experts already monitor the device type in their campaigns so it is only logical to also view competitor’s device used and look for variations with competitors among devices. If there aren’t a lot of competitors for a device, a good strategy may be to push hard on mobile device ads. Or, advertisers may instead use a lower bid if there aren’t many competitors on a specific device. This data can help make that decision about which direction to go in with bids.
It is worth drilling in even farther to the keyword type used on mobile devices. Searches on mobile devices tend to be more informational based so view searches for users on mobile versus other devices to see if this holds true in your account.
Segmenting by time can lead PPC experts to discover their own weaknesses by week, month, or quarter or perhaps discover new opportunities. For example, perhaps a key competitor generally doesn’t push hard on ads at the end of a month. This could be a result of bidding aggressively early in the period and running out of budget for the last week of the month. If that is a trend, one strategy is to bid more during that period since the competitors are less present. But also keep in mind any seasonality. It could be that week is not a great time to run ads for a specific reason.
Although many PPC experts have third party tools to use for competitor research, there is a lot of information in AdWords once campaigns have been running for a while. Take time to explore what is available in auction insights report and segment by product, labels, keywords such as brand terms, intent, and type of campaign. Include segments for time and device for additional insights. If you are ready to take it to the next level, considering using the script provided by Daniel Gilbert of Brainlabs that helps you keep track of what your competitors are up to.