Chapter 5 – The Impact of Quality Score

This post is from the upcoming ebook Google Adwords Quality Score in High Resolution. Sign Up For An Alert When The Complete eBook Is Available.

Until recently keywords and bids were considered the prime success drivers for Adwords. We now know that Quality Score is equally important.

In this Chapter we’ll look at the four ways Quality Score impacts your account and paid search success.

Impact One: Getting Ads Shown
Google introduces AdWords to new advertisers with the following summary:

You create ads and choose keywords, which are words or phrases related to your business.
When people search on Google using one of your keywords, your ad may appear next to the search results.

That’s a pretty efficient sales introduction, but in its brevity it fails to answer two important questions:

How the match between the keyword you buy and the search query people execute get made?
After the match has been made, how does Google decide if they’re going to show your ad or not?

That match between keyword and query is based on the content and meaning of your keyword, the match type assigned, the content and meaning of the search query, and how Google’s ad matching algorithm aligns all these things. It’s far beyond our scope here to delve into this further and mostly Google keeps those details confidential anyway.

But in that instant after someone clicks the search button, Google looks at all the keywords for all potential advertisers and decides if your keyword (or more precisely one of the ads from your ad group) has even a shot at being shown.

If you make that cut, the decision of whether or not to actually display your ad appears to be based on the answer to a series of questions:

Is there money left in the account budget?
This one’s easy. If you’re out of budget you’re out of contention.
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Where does your ad rank against all potentially eligible ads?
Google sorts potential ads by something they call Ad Rank. Ad Rank is calculated by multiplying your MaxCPC x the Quality Score that keyword receives for that particular search. We don’t know if Google does a rough estimate of Ad Rank at this early stage, or if by this point they’ve fully calculated the actual Quality Score for this query. In any case, they get a rough or precise ordering of the ads eligible for display.
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How many ads is Google going to show for that search query?
Now they begin a couple of ’subjective’ decisions. You’ve probably noticed that for some queries Google shows page after page of paid ads, while others have just a few, or even none. These limited lists aren’t necessarily because there were no interested advertisers – they actually limit the number of ads shown in many cases.
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What’s the minimum bid they require in order to show an ad for that search query?
Similarly, Google sets what is in effect a minimum CPC for every search query, and eligible and sufficiently ranked ads must either meet that CPC or they won’t be displayed. It’s clear that this value is calculated on something close to a per search query basis. And that they’re never going to tell us what it is or how they arrive at it.

So Quality Score has equal weight with your keyword bid, in determining if your ads are displayed.

Impact Two: Ad Position
The position in which your ad appears is decided by its Ad Rank, as mentioned above. Ad Rank is calculated with the following simple formula:

Ad-Rank = CPC bid (Max CPC) x Quality Score

Which Google explains is used in the following manner:

“Ads are positioned on search and content pages based on their Ad Rank. The ad with the highest Ad Rank appears in the first position, and so on down the page.”

So Quality Score has equal weight with your keyword bid in determining the position in which your ad appears when displayed.

Impact Three: The Price You Pay
Having seen how Quality Score impacts if your ads are shown and if so the order in which they rank, let’s see how it drives cost-per-click (CPC).

After rank is determined, Google calculates CPC for each ad in the list from top to bottom. Here is Google’s own description:

You always pay the lowest amount possible for the highest position you can get given your Quality Score and CPC bid.
To find this amount, we divide the Ad Rank of the ad showing beneath you by your Quality Score, then round up to the nearest cent (we show this part of the formula as “+ $0.01″ to keep things simple).
Actual CPC = (Ad Rank to beat ? Quality Score) + $0.01

So if you’re in position #1 with a quality score of 5, and the ad in position #2 has an Ad Rank of 10, your cost-per-click is 10/5 +$0.01 = $2.01

It’s interesting to note that although Bid and Quality Score play equal parts in determining when and where your ad is positioned, Bid is not used in this final determination of actual cost-per-click.

Impact Four: The Estimate for First Page Positioning
The final core impact of Quality Score is its effect on the new First Page Bid Estimate, a number which appears for keywords which are not currently appearing (generally speaking) on the first page of the search engine results.

This number is calculated, one assumes, by taking the bids and quality scores of those advertisers who did make it to the first page and the calculating based on your existing Quality Score what you’re your bid would have to be to get your Ad Rank high enough to have a shot at the first page.

Summary
We should be convinced by now that tracking and managing Quality Score is a vital component towards our success in Google Adwords. In the next chapters, we’ll dive deeper into the things we can do to influence our Quality Score results.

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About This Post
This is preview material from our upcoming Google Adwords Quality Score in High Resolution ebook. Comments and discussion are most welcome – changes and updates will be made before the final book is released.

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