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The Pollution Effect

Posted By Bradd Libby On January 19, 2010 @ 4:28 am In Featured,SEM | 5 Comments

Paid search advertisers are acutely aware of the dependence of click volume on ad position, with each ad slot typically getting roughly 30-40% less traffic than the slot above it. One part of the explanation for this relationship might be that searchers have learned that listings in higher positions tend to be more relevant to their interest than lower-placed results. Therefore, with each successive ad they scan, they might simply decide to stop looking, disregarding any listings which appear beneath. This creates a problem for advertisers who have good-quality ads whenever poor-quality ads appear in the same set of results, especially in cases where those poor-quality ads are in higher positions. For example, I entered a search query into Google that, to the best of my knowledge, I had never used previously: [designer shoes].  Look closely at the ads that appeared on the right-hand side of the screen: designer-shoes-google The first ad starts "Sale on Designer Shoes". So far, so good, even though the text itself looks like it was written by someone who had chewing gum stuck on their keyboard. No big deal though, I'll just skip that ad and go onto the next listing for "kate spade" shoes. Well, I'm male and katespade.com sounds like they probably sell women's shoes, so I'll skip that one as well. The next ad, however, looks a bit like a train wreck - no unique text beyond my own search query, a basically unparsable domain name, and something that looks like an attempt at Dynamic Keyword Insertion that, even if it had been done properly, would still have only inserted the words "designer shoes" one more time. At this point, any reasonable person would simply stop looking at the ad listings (which is a real shame for ShopHousingWorks.com or Bloomingdales.com, which are further down on the page but might actually have what I'm looking for). This is what online marketers term The Pollution Effect: if some of the ads look really bad, searchers might not be willing to take the time to judge each ad on its own merits, since they might assume that ads which are placed below a bad ad are probably just as bad, if not worse. Economists call this effect an 'externality', which simply means that bad ads might impose a cost on other ads near them (in the form of a reduced click volume) by polluting the space with irrelevant or otherwise unappealing listings. On any given search the presence of one or more ads which are so bad that they cause searchers to cease examining the ads entirely (what I call "showstopper ads") could therefore cause relevant ads to be unfairly disregarded. "Well, so what?", you might think. If 5% of ads are showstoppers, they should only reduce traffic by about 5% at most, right? Besides, Google has measures in place to weed out bad ads, so showstopper ads should never be a big problem. It turns out, neither of these seems to be the case. I've estimated the effect of differing percentages of showstopper ads on the clickthrough rate (CTR) assuming that the ads are randomly placed, that searchers tend to examine higher-placed ads before lower-placed ads, and that encountering a showstopper ad causes the searcher to stop looking at any further ads. For each position, the ratio of the clickthrough rate at that position with some percentage of showstopper ads is compared to the CTR at that position when there are no showstopper ads. the-pollution-effect Surprisingly, having just 5% of the ads be showstoppers likely causes a significant drop in traffic, with the ad in position #1 averaging a 5% drop, but with the ad in position #10 seeing its traffic drop by about 40%. And, the total number of clicks received by all of the ads combined drops by about 15%...all from just 5% of the listings being showstopper ads! If 30% of the ads are showstoppers, the effects are even worse, with the ad in position #10 seeing its traffic drop by over 97% and the click traffic to all of the ads combined dropping by about 60%. Given these ratios, it's understandable why search engines are so vigilant about weeding out irrelevant ads and those that violate style guidelines. But recent changes to how Google serves broad-match ads in search results might make showstopper ads soon be much more common, rather than less so. I've noticed that Google has started carrying over ads from older searches into the ads for a new search, regardless of whether or not one is logged into a Google account at the time and also even if one has specifically turned off Google's Web History feature and cleared the search history. For example, I recently did a search for [buy authentic polish flag], getting ads from FlagsImporter.com, United-States-Flag.com and AmericanFlagsExpress.com in the results (among others). Immediately afterward, I did a search for [buy barometer], the results of which are shown below: buy-barometer-exact Look! There's an AmericanFlagsExpress.com ad in there at the top of the right-hand sponsored links, and several other flag ads throughout the right-hand side. In total, this particular search shows five carryover ads (the most I've seen so far), representing 50% of the sponsored links on the page. As my calculations above showed, it probably doesn't take too many low-relevance ads like these for click volume to suffer appreciably. Woe be unto you, BarometersPlus.com. I'm certain that Google has their reasons for starting to show carryover ads, and no place more so than the internet can brilliance sometimes be indistinguishable from insanity, but frankly this practice does not seem to me to be in the users' best interest. Performing similar searches on Bing.com doesn't turn up carryover ads like this, so whatever's going through Google's head doesn't seem to be happening elsewhere. The lessons for marketers, I think, are threefold: First, on key terms, check to see that your ads do not rank below showstoppers or else you might be sacrificing good-quality traffic without even knowing it. Second, if Google persists in showing ads across search queries like this, know that the analysis of ad performance is going to get much more difficult, since your ad for flags might start showing in searches for barometers. (In fact, the Zappo's leather jacket ad appeared in the search I did for "designer shoes" came just after doing a search for "leather jackets"). Unfortunately, Google's Search Query reports might not be helpful in identifying cases where this occurs, since they include the catch-all category of 'X other unique queries' in the list of queries that prompted impressions. (I've seen reports that say '1 other unique queries'. Why not just show me that 1 other unique query? Could it be because it was the equivalent of 'buy barometer' in a flag-seller's account?) And, finally, recognize that if this practice of showing carryover ads becomes more common, then the top ad positions will become more valuable, since outranking showstopper ads might be the only way to avoid their toxic effect on clickthrough rates.  So, be prepared to pay more for placing your ads in top positions (which actually might be the reason why Google is showing carryover ads in the first place...) Do you see carryover ads between unrelated search queries?  If so, please let me know.

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