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What is the difference between the Google AdWords & Yandex Direct auctions?

Written by Tom | 08-Aug-2013 12:13:24

At a quick glance you could be forgiven for assuming that there is little difference in the way the Google & Yandex pay per click (PPC) auctions function. After all Yandex itself stands for Yet Another index.


Google AdWords may well be more evolved with a raft of additional extensions which Yandex Direct does not currently offer, however fundamentally both have 3 top premium ad positions and a number of less premium ad positions down the right hand side. Advertisers typically receive more traffic by appearing in the highest, most premium ad position. Does this mean that he with the largest wallet wins?

Not necessarily as both auction models operate on the same principle that higher quality ads should pay less for driving traffic to websites. The reason being higher quality ads lead to better user experiences and better user experiences lead to more use of their engines for future searches. Quality is subjective and hard to measure though, thus both use relevancy metrics to determine what is deemed a high quality ad.

Google

Google’s Chief Economist Hal Varian eloquently describes how the Google auction operates in this 9 minute YouTube video

http://www.youtube.com/watch?v=HJljAiruI2Q

In short Ad Rank determines what position you appear in the search engine results page (SERPs). The advertiser with the highest Ad Rank appears in position 1.
Where Ad Rank is calculated as

Quality Score (QS) is the relevancy metric which is comprised of a wide number of factors. However it is thought that roughly two thirds of this metric is based on historical click through rate (CTR) performance. For more in depth understanding of quality score please read this Google article https://support.google.com/adwords/answer/2454010

The price you pay in the auction is dependent on the Ad Rank of the advertiser in the position directly below you in terms of Ad Rank and your quality score. Clearly the higher your QS the lower your actual CPC

Yandex

The Yandex PPC auction works quite differently from the Google auction model. Rather than a relevancy metric like quality score determining where you rank in the SERPs you can opt to target a given set of positions.
There are a few tiers to choose from
• 1st premium position on the LHS
• 3 “premium” positions on the LHS
• 1st “guaranteed” position top RHS
• Other “guaranteed placement” positions on the RHS

Where you actually appear within the selected tier of positions is dependent on your within tier strategy . 

• You can either go for the top spot within that tier i.e. the advertiser with the highest CPC bid wins top spot

OR

• You can pay the lowest amount possible to still remain in the tier and accordingly appear in the lowest position within that tier

The CPC bid required is typically higher in the “1st place premium position”, than in the” premium positions” and so on. So where does a measurement of quality come in?
You receive a discount on the actual CPC bid that achieved the position depending on the historical CTR you have achieved. In essence CTR is the measure of relevancy and accounts for 100% of what rewards an advertiser for a high quality ad. Writing compelling ad copy and making intelligent use of match types and cross over negatives will help deliver a high CTR for which you will be rewarded via lower actual CPCs.

                

Both Google & Yandex consider click through rate the most important relevancy metric. After all where quality is subjective the best proxy for determining what a user has found relevant is whether they clicked on an ad or not. Ads that have received higher CTRs are likely more relevant than those that have received lower CTRs and rightly rewarded in the best interests of users, the search engine and advertisers.

This is where the significant differences present themselves:

  1. In the total composition of those relevancy metrics
  2. In how they are applied to reward high quality ads

Whether it be managing paid search accounts through Google AdWords or through Yandex Direct our PPC team put click through rate at the top of our optimization agenda. By focusing on the key relevancy metrics in tune with clients KPIs we are able to drive more traffic via lower CPCs. Please read through our PPC case studies or get in contact with us to find out how we can help improve your paid search performance today.