Earlier this month Google made some changes to the AdWords system that alter the way keywords are evaluated by the system. While some advertisers were pleased what they viewed as a new level of flexibility, others were left scrambling to make sense of a new measurement system.

Andrew Goodman of Traffick has written a lengthy but worthwhile look at these changes and their impact on advertisers in a piece called The Importance of Clickthrough Rate (CTR): Has it Changed?

In it he delves into the particulars of Google’s new “Quality Score” system and explains why it’s a natural evolution of the original CTR-based model, taking a brief detour back through the CPM days.

I won’t give it all away, you’re going to have to read this one for yourself, but Goodman’s final take-away for advertisers is this:

“Don’t be so arrogant that you believe everyone will want what you have…Look for loopholes as the exception and potential goldmines, of course…but overall, focus on doing well with your bread-and-butter keywords, and keep searching for other high-CTR keywords. Be precise, specific, and granular. Test and re-test your ads based on the kinds of messages your best customers might like to read. Fire your worst customers. And don’t target non-prospects.”

Bottom line: CTR will always be a valuable indicator of user relevancy and intererst, but advertisers need to adapt their worldview to look at other factors as well.

This entry was posted on Wednesday, July 27th, 2005 at 10:30 am and is filed under Google: AdWords. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.