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When Average Position Is Not The Average Position

December 11th, 2008 by e-channel

Most of us within the SEM industry use the various performance statistics provided in Google AdWords to make everyday decisions to optimise and improve our campaigns. Some recent tests provided some interesting (yet very logical) insight into the Average Position statistic which is shown for keywords, ad groups and campaigns.

For those are not aware, this statistic provides an indication of the position in the paid search result list an ad is being displayed for a given keyword, the position is determined by Google using several factors including the landing page Quality Score and your Max CPC. Each keyword is assigned an Average Position and until this point everything appears very straight forward… moving up to the ad group/campaign level it would appear the average position is not in fact (as I would have expected it to be) simply the average of the average position values for each keyword within the ad group!

Example:The total average of the values shown here should be approximately 1.7, however, when factoring the number of impressions the adjusted average is actually 1.3.

It seems that the Average Position for each keyword, when viewed from an ad group/campaign perspective, is actually adjusted to include the number of impressions each keyword has received. Therefore the Average Position for those keywords that have had the most searches are given the most weight and the least weight is given to keywords with the least searches. The resulting formula to calculate an ad group’s Average Position, where k=keyword and n=number of keywords within an ad group/campaign:

average_position(k1…n)  =  sum(average_position(k1…n) * number_of_impressions(k1…n)) / number_of_impressions(k1…n)

This logic allows the importance of each keyword to be reflected the in the Average Position shown for ad group and campaign statistics allow more accurate decisions to be made.

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Tags: adwords, average position, statistics

This entry was posted on Thursday, December 11th, 2008 at 10:42 am and is filed under Paid Search, SEM Stuff, Search Industry. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.