Google Instant – Good or Bad For PPC?
Posted on October 7, 2010 by Darryl Delong
Google Instant
What is Google Instant?
If you use Google as your search engine, then you’ve probably noticed lately that the results are displayed even before you finish typing the search query. This feature, called Google Instant, attempts to predict the searcher’s query and dynamically displays a list of possible results in real time as the user types. You don’t have to hit Enter or click the Google Search button to see search results. Google Instant is enabled by default in most browsers, but can be disabled by going to “Settings > search settings > Do not use Google Instant.”
The search results that Google Instant serves up include AdWords ads. As an AdWords advertiser, this means your ads can show up if someone types even a fraction of a search query that may or may not be related to your ad. A high ratio of ad impressions to clicks (in other words, a low Click-Through-Rate) lowering your Quality Score, which can cause you to pay more per click, or, in extreme cases, can disable a keyword you are sponsoring from triggering ads.
So, while the pundits have been evaluating the benefits of Google Instant for the millions of people who rely on Google as their primary search engine, we wanted to know how Google Instant would impact Paid Search. Here are some of our conclusions.
The Good – Increased Keyword Targeting Precision
Searchers will likely be more inclined to select the query Google suggests or predicts. This reduces the really long tail (5-7 word) phrases and those unique phrases that occur infrequently. Both of these are associated with a very low search volume and do not appear in Google Suggest.
Google has discouraged the sponsoring of very long-tail, low frequency keywords for some time by disabling them, sometimes within minutes of initiation. If too many of them are in your AdGroup, Google starts lowering your overall quality scores. So it is useful to be able to quickly and easily focus on relevant but popular keywords.
You can use Google Instant as a quick and easy way to find those keywords by typing in various combinations relevant to your offer and seeing what keyword phrases Google Instant suggests. This can dramatically reduce or eliminate the need for broad matching of your sponsored keywords altogether. Alternatively, you can use phrase and exact matching for precise targeting of your ads.
This helps in the following ways:
1. It reduces the amount of irrelevant or “curiosity” clicks, which have a greater chance of not converting.
2. It lowers your ad impressions, increases your CTR and improves your Quality Score. This all leads to lower PPC costs.
The Bad – Increased PPC Cost Per Click
Google Instant could lead to a reduced number of sponsored broad keywords per PPC advertiser account and increase competition on the Google Instant suggested keyword phrases. The more advertisers that bid on the same set of keywords, the more advertisers will have to pay per click. Here is how we came to this conclusion.
According to Google, with Google Instant, each ad impression is counted if a searcher stops typing and the results are displayed for three seconds or longer. Your cost per click is based on your Maximum Bid times your Quality Score. A higher Quality Score than your PPC competitor translates to a better ad rank and a lower cost per click for you. There are several contributing factors c to obtain a high quality score, these include relevancy of ad and landing page to search query, landing page load time and of course the CTR (click-thru-rate) of your ad. Your ad CTR = ad clicks/ad impressions. If ad impressions increase then it’s likely your CTR will decrease, reducing your Quality Score. However, based on Google’s Cost Per Click formula below, we believe everyone’s CTR will be negatively affected by Google Instant. Therefore Quality Score will not be a factor in the actual cost per click advertisers pay.
How Google figures cost-per-click
(Source: Hal Varian, Google’s Chief Economist.
If increased impressions does not increase PPC cost per click prices, what other effects might Google Instant have? We think it’s quite possible that broader (1-2 word) keyword phrase queries will decrease in favor of the longer (3-5 word) keyword phrase queries that Google suggests via Google Instant. If this occurs, it is likely that click traffic for longer phrases would increase. PPC advertisers may be more inclined to sponsor them over the shorter broader ones. For example, a marketing firm located in Boston will probably sponsor and pay a high maximum cost per click bid for a keyword like “marketing firms in Boston” than the broader keyword, “marketing firms”. In this example the longer keyword phrase is highly relevant and would more likely convert than the shorter one.
Our Recommendation
We can’t say for sure whether Google Instant will be “good” or “bad” for PPC advertisers in the long run. Only time will tell. But we do recommend you constantly test new ads, monitor performance and optimize your account. Keep an eye on your Quality Scores, eliminate non-converting keywords, reduce or eliminate broad matching, always segment your keywords into tightly themed AdGroups and, most importantly, look to improve the conversion rates and reduce the loading times of your landing pages.
