Back in May 2012, Google released the Auction Insights report in AdWords. Many advertisers I’ve talked to are indeed excited about (you guessed it) the insight it provides into the auction - which determines the order of the ads on Google’s search results page. In fact, I’ve learned that each of the 5 metrics exposed in the Auction Insights report is useful in its own way. And the biggest gift of this report might be a metric which you could already calculate yourself.

1. Impression Share
The Auction Insights report represents the first time Impression Share can be seen at the keyword level (previously it was only available at the ad group level and above). Many advertisers consider Impression Share to be one of the most relevant metrics to optimize their AdWords-accounts. In fact, some of them have explicitly called out the importance of Impression Share at the keyword level. Note that the way Impression Share is reported in general changed significantly last week.

2. Average position
This is the only metric which was easily accessible before – but clearly it’s relevant to see average position in the context of this report. Let me take this opportunity to point out some of the intricacies of the Average position-metric, as described in a post on the Inside AdWords blog from April 2011. If you’re not familiar with the difference between “page position” and “auction position”, be sure to check it out.

3. Overlap rate
Now it gets interesting, because this is a completely new metric which wasn’t previously available. The Overlap rate shows for which % of queries you and this specific advertiser appeared in the same auction for this keyword. That makes it easy to determine which other advertisers’ ads are appearing next to yours most often for this particular keyword.

4. Position above rate
And this is the best metric of all: Position above rate. It shows you for which % of queries for this keyword this specific advertiser’s ad appeared above your ad in the search results. So now you know who you have to leapfrog to appear higher in the search results and drive (much) more traffic to your website. Looking at the ads and landing pages of other participants in the auction might also give you new ideas on how to optimize your own.

5. Top of page rate
Personally, I believe this is the hidden gem in the entire Auction Insights report. As discussed previously on this blog, it makes a huge difference whether your ad appears on the right-hand side of the search results or above the search results. This metric, Top of page rate, shows you how often your ad appears above the search results for this keyword. Before the release of the Auction Insights report, it was possible to calculate this wonderful metric (using the Top vs. Other segment), but it took a number of manual steps in Excel. Now it’s right there for you to enjoy and optimize against.

So all in all, the Auction Insights report provides a number of really useful metrics, even if only at the keyword level. Looking at the Auction Insights report for a dozen important keywords in your account should already give you a good sense of how you’re doing compared to other participants in the auction.

And advertisers have started coming up with innovative ways of using the data: how about pulling the data for consecutive time periods and determining for which keywords Top of Page rate is up or down? Let alone all the competitive insights you could derive from combining the Overlap rate with the Position above rate.  Just for fun: does anyone know what metric you end up with if you multiply these two columns?

Finally, it’s also worth reading the explanatory notes in the original blogpost, since they detail clearly how this information was already available in principle, but is now presented  in a way that’s more accurate and easier to understand. And if you’re looking for a primer on how the AdWords-auction works in general, you can’t beat this 9-minute video with Google’s Chief Economist, Hal Varian.

If you’ve found a particularly creative way to use the Auction Insights report for your own AdWords-account(s), please do let me know: through Twitter, Facebook, Google+ or in the comments below.