ClickEquations Blog

At the quality score session at SMX Advanced London yesterday, a question was asked about what to do with low quality score keywords. It was framed as a query of when you should turn off keywords because they were below a certain quality score level.

I helped answer the question, and then tweeted some quick advice on the subject. It got a few RT’s and the interest and some more thinking drove me to elaborate in this post.

While the virtues of high quality score, and the techniques to try to achieve it have been covered here often, the truth is that for many reasons most accounts sometimes have keywords with low quality scores – which we’ll define as those of 5 or lower.

Broadly speaking you should work to improve those scores, and often if you can’t the best answer is to pause or delete those keywords. But that isn’t always wise or feasible.

B2B Keywords With High CPCs

Patricia Hursh of SmartSearchMarketing.com made the great point in her presentation that for B2B Marketers with very expensive keywords, often it’s much better to write copy that *discourages* unqualified clicks, which results in low CTR and thereby poor quality score – but much better ROI.

Ideally you’d query-mine those keywords as completely as possible – to find related words on which you can earn good QS – but that won’t fully solve the problem and so her advice is wise.

Quality Score Collateral Damage

The other case is keywords that are important to your business or goals and have low qualty score that you just haven’t yet been able to increase. When making the decision to leave these running, consider their impact on your overall account-level CTR.

If these keywords have huge impression counts and really bad CTR (the cause of bad QS if you don’t have landing page penalties) then the cost of leaving them running isn’t just the over-bidding you’re likely to have to do on those keywords. Those bad keywords will actually help lower the quality score (albiet only slightly) on all the good keywords in your account.

But if those keywords have only a relatively low impression count as a percentage of your total account, the ‘collateral damage’ of leaving them running will be very slight. So go ahead and run them guilt-free if you really want to.

The folks at Google are masters of the art of positioning.

Nearly every element of their products – at last the core ones like AdWords and Gmail – and even moreso their public statement describing features and rule changes – make them look unbelievably helpful and benevalent.

Obviously, much of what they do is really great and has benefit to us as users and advertisers. So this isn’t that surprising even if the skill of it is impressive.

But other times, when what they’re doing is primarily in their own interest and of limited value to the advertiser, they’re still somehow able to describe everything in a way that makes you want to thank them for being so kind. Remember the announcement of expanded-broad-match, or the non-announcement of session-based matching?

All of which leads, unexpectedly, to Secret Truth #12 – From the advertisers viewpoint, quality score really is a measure of qualty.

Who Beneits? Follow The Money.

In a perfect world it really is in Google’s interest to create features and set rules that benefit searchers, advertisers, and Google themselves.

• If users aren’t satisfied with they’re Google experience they won’t come back, or at least may not conduct as many searches.
• If advertisers aren’t satisfied they will cut budgets or bids.
• If Google isn’t raking it in then the free Odwalla drinks in the lobbies may have to go

Of course, not every decision can share the benefits equally. Most don’t. For a lot different reasons, and much of the evaluation is naturally subjective. But broadly speaking quality score does share the wealth pretty fairly.

• Users have a better chance of seeing ads that will satisfy them relative to their query and intent.
• Advertisers get more traffic from ads that satisfy users at a lower price, and are discouraged from wasting money on inappropriate ads.
• Google satisfies its searchers, its advertisers, and maximizes revenue.

Let’s look at each of these in a bit more detail.

Quality Score And Searchers

I was on a panel at SMX with Nick Fox of Google last year, and he explained quality score as being in many ways a ‘wisdom of the crowds’ system.

If a lot of people who searched was matched with a particular keyword clicked on a particular ad, that ad is by definition of high quality. It was ‘voted’ as being good by the people who matter. It’s hard to argue with that logic.

This why CTR is by far the largest and most important element of the quality score calculation.

Quality Score And Advertisers

The fact that high quality scores reward you with more impressions, higher positions, and lower CPCs, while low quality scores do the exact opposite, is good for advertisers. If you accept (for the moment) that the quality score calculation has effectively rated the likelihood of your keyord-ad combo to succeed in attracting a particular searcher, they it’s good for you as an advertiser that AdWords shows your ads more when it’s got a higher chance of success and less when it has a lower one.

It’s even good, in a slightly strange way, that they give you a discount when your quality score is high and make you pay a penalty when it is low. Like all taxes the penalty is meant (partially) to shift behavior.

They’re giving you a low score, making that (sort of) clear, and charging you more (less clear, but still true) – they’re really asking you to fix the problem or quit advertising.

It may be tough love, but it can be considered well intentioned.

Quality Score And Google.

Make no mistake about it. Quality Score is a revenue optimization algorithm.

Ads which get the most clicks (and therefore drive the most revenue) are promoted while ads that get less clicks (and generate less revenue) are supressed. And you can be sure the discount given for high quality scores is more than made up for in the volume of clicks and total revenue they generate.

This is where the win-win-win comes from. Google makes less money if you have low quality scores. They don’t need the bell curve. Every time you improve quality score, they make more money. They really don’t want to see you suffer with those QS=3 keywords!

The Devil In The Details

We could talk endlessly (and have) about the details of all the elements which influence quality score, and how fair or accurate they are in really predicting quality. Those are fair discussions, but broadly speaking there is little doubt quality score works and google is working pretty consistently to make it better – in ways that will continue to benefit all parties for the reasons described above.

It’s worth knowing the details of how it’s calculated so you can take actions to increase your scores. It’s worth knowing how it’s used so you can intelligently react to your scores.

But mostly it’s worth doing the work that results from that learning to actually improve your scores, or make the tough decisions to stop buying keywords where your score are bad and probably always will be.

Quality score is a tough and not entirely transparent task master. But I do believe that quality score is your friend.

What Do You Think?

This blog post is part of a series extending and amplifying the ideas in our free ebook ‘21 Secret Truths of High-Resolution PPC‘.

What they’re saying: “Everything you know about AdWords is the basics Google wanted you to know. Just enough to get you hooked. But what if there was fundamental secrets that they neglected to share? Would you want to know them? Now you can! 21 Secrets Truths is what you must read, no, act on, before your competitors do.”

- Bryan Eisenberg Conversion Expert and New York Times Best-Selling Author ’.

Download Your Copy Today
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The idea of creating highly targeted ad groups, so that all of the attracted search queries are well aligned with the included text ad copy, is one we’ve written about often.

One of the drivers is the fact that better alignment drives up click-through-rates and thereby quality score.

A number of recent conversations have suggested that this good idea, like many others, is being taken to absurd extremes.

I’m talking about the practice or ‘recommendation’ of limiting ad groups to a single keyword.

Single Keyword Ad Groups Have No Quality Score Advantage

The primary reason I’ve heard for this practice is improved quality score. But it won’t work.

The quality score of a keyword in AdWords is based primarily on the CTR, from a specific geography, of search queries that exactly matches a that keyword. There is an impact from the historical CTR of the entire account, of the relevance of the query-keyword-ad, and the potential of penalties from the landing page. There is no factor in that definition that would favor a single keyword alone in an ad group.

There is no ad group quality score. There is no benefit from keyword loneliness. There is no ‘lots of ad groups’ bonus.

Isolating keywords in-and-of-itself does not help quality score. There is really no way any keyword can impact, positively or negatively, another keyword in terms of quality score.

The Right Number of Keyword Per Ad Group Is…

So how many keywords should be in an ad group?

Assuming we want to maximize quality score and overall results, the answer is: as many as will attract search queries that are directly addressed by your text ads. You may recall that we want to work from the text ad (or text ads) backwards. So the number of keywords really isn’t important. What matters is the alignment of the search queries (and the intents they represent) with the text ads.

If there are a lot of different keywords needed to match and attract all the different search queries that people use to say essentially exactly the same thing, then your ad group should have a lot of keywords. If there is only one keyword that is needed to match and attract to every search query that is directly addressed by the text ads in your ad group, then your ad group should have one keyword.

But the one keyword situation is likely to be very rare.

You don’t want single keyword ad groups, you want single-minded ad groups. If they attract synonymous queries, the more keywords the better.

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FACEBOOK

The Max CPC and quality score of a keyword determine its position, and position and quality score drive actual CPC. So exactly what effect does quality score have on cost?

We first answered this question one year ago, in the now famous ‘Economics of Quality Score‘ post. (This has since become the most visited page in the history of this blog.) You should go read this now if you haven’t already.

The central chart from that article shows the percentage discount or penalty you pay for every click based on your quality score.

If you know how many of your keywords are receiving each quality score, and the amount of your spend on each, it’s easy to use this data to calculate the total cost of poor quality scores, savings from great quality scores, and the net cost to your account.

Incidentally, ClickEquations provides this as a default report – isn’t that handy?

This Is Probably True

The only caveat to these calculations is the little-known-fact that quality score IS NOT a number between 1 and 10.

Google reports quality score to us mere mortal advertisers using that scale, but in the great AdWords super-computer a wider range of values is used – so your actual quality score may be 37 or even 68.2394.

We don’t know the range of numbers they use, the number of digits of precision, nor the relationship of one score to another.

And while this isn’t a secret truth, the fact is that I’m not much of a mathematician. So at the risk of public scrutiny and embarrasement, here’s the logic that lead to the above quality score impact calculations – feel free to issue corrections and admonishments in the comments:

CPC is calculated by dividing the ad rank of the advertiser below you by the quality score of the advertising keyword. The table was created by calculating the difference between dividing X by 7 and dividing X by 8. This difference, it turns out, is consistent regardless of what X is equal to.

Therefore, if quality scores were really whole numbers between 1 and 10, the chart above should be accurate.

Since they’re not, we don’t know (at least I don’t) the impact of a different range of quality score numbers which act as divisors. If a perfect quality score is really 83 and not 10, and a very good quality score is really 64 and not 9, there would be a difference in the percentage impact to CPC of earning a perfect quality score versus and very good one.

The assumption made in publishing these numbers as they are (which was disclosed) is that the real levels are proportionally similar. That could be wrong. Which means that the discounts and penalties on the extremes could be more or less. There is no way – short of a Google announcement – of knowing.

I believe the numbers to be directionally true. Perhaps as Jim Sterne said about web analytics in general, they’re ‘true but not accurate’.

What Is True

The details probably don’t matter anyway. Quality score does in fact apply as a discount or a penalty to your CPCs. And whatever the numbers, the farther your quality score is from the mean, the more severe its impact.

What matters is that we realize that high quality scores save us money (and get your ads shown more frequently and in higher positions) and that low quality scores cost us money (and result in less ad display and lower positions). In terms of data, everything after that are merely interesting.

In terms of action, we need to use that knowledge to drive our actions. We want to be aware of our keyword quality scores, and manage them, based on the fact that they drive our placement and to a very large degree our costs.

What Do You Think?

This blog post is part of a series extending and amplifying the ideas in our free ebook ’21 Secret Truths of High-Resolution PPC’.

What they’re saying: “The glory of paid search is hyper relevance and how absolutely data driven it is. If your goal is to be the best you can be at paid search, then your path goes through this book. When Craig talks I listen, mesmerized. You should too because being wise is great.”

- Avinash Kaushik Best-Selling Author ’.

Download Your Copy Today
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In advance of our new ebook, and some other projects just behind it, I built a new website focused on High-Resolution PPC.

To support that site, I created a new AdWords account and added two small ad groups with a total of 9 keywords and two text ads. Every keyword is a brand or navigational variation of the term ‘high-resolution ppc’.

That phrase is in the domain name and all over the home page, which serves as landing page for both ads.

This is a story of how quality score evolves.

At First, They Don’t Trust You

This is a brand new account. It has no CTR history. The ads are new. There is no visible URL history. The website has existed, and been indexed in Google, for a few months but with just a few pages and virtually no traffic.

The keyword ‘high resolution ppc’ does have a CTR history, because in our Clickequations.com AdWords account we buy the broad match version and aim ads at a page for ebook sign-ups.

I added six exact match keywords (shown right) to the first ad group. The initial bid was set to $0.10.

A few minutes after creation, they were all listed with a quality score of 3/10 and a First page bid estimate of $1.00.

Interestingly, Relevance was initially listed as ‘No Problem’ but 14 hours later is listed as ‘Poor’ for every keyword.

Because the corporate account had bid on the keyword, I looked in ClickEquations to see how it was doing. ‘High resolution ppc’ (broad match) has a quality score of 7 and a Max CPC of $0.10. Relevance says ‘no problems’. The ad copy and landing page for that keyword also use the phrase in just about every place possible.

Given the lack of history, and knowing that history matters, I accept for the moment the fact that it’s necessary to bid $1.00 per click for a phrase I made up (ie the competition is light, on both content and competitive bidders). So I raise the bid on the one exact match keyword ‘high resolution ppc’ to $1.00.

The ad did not start showing in the SERPS. So I went to sleep.

Money Talks
This morning I checked again. The ad from the new account is now in position #1, at the top. It still has a quality score of 3, and a ‘Poor’ rating for Relevence.

Someone explain how these keywords could be more relevant for the search queries, text-ad copy, and target URL – all of which contain the exact 3-word phrase.

It had zero impressions or clicks overnight. To boost my CTR, I clicked it the time I ran my search to check it. Cost me a buck, but my CTR is now 100%!

There were only 3 ads shown the first time I searched. The book ad, the one from ClickEquations, and one from AdWords themselves trying to lure innocents into PPC for the first time.

Interestingly, and perhaps coincidentally, after my $1.00 self-help click, the phrase now returns 14 AdWords ads – due to broad matching on the ‘ppc’ part of the search query no doubt. I guess once Google sees that people who search this phrase will click paid ads, the ads come a-runnin’.

What Happens Next
There’s nothing too revealing in all this. The time frames and data sets are tiny, the behaviour is more or less consistent with what we’ve been told about quality score. Yet I find the rare opportunity to view a case study with so few complications appealing.

It won’t be pure, of course. Some of you will go run the query, depressing the CTR. A few will even click the ad, wasting a little money

But over the next few weeks we’ll see what happens.

1. How long will it take to get the quality score up from 3 to at least 7?
2. When will Google recognize that the relevance is perfect, not poor?
3. Will the CTR on the new version of the ads beat the old ones that earned the quality score of 7?
4. How long until I can get the bid down from $1.00 (which clicks are not worth) to $0.10 (which they may be)?
5. Once the account grows, what will be the best way to monitor and control lifetime account CTR history, and visible URL CTR history?
6. How much is this experiment going to cost? (Note: It’s not entirely an experiment, the ad and site are real and will live on – the learning is a bonus.)

Stay tuned….

UPDATES:

Day 2 – Quality Score 4, CTR 40%, Impression 10, Clicks 4
Day 4 – Quality Score 5, CTR 45%, Impressions 11, Clicks 5
Day 4 – Lowered bid from $1.oo (former ‘first page bid estimate) to $.80)
Day 4 – Added new ad group with 1 keyword – Craig Danuloff (broad match) initial QS=5
Day 4 – Noticed that navigational keywords (www.highresolutionppc.com) have QS=7
Day 6 – Quality Score 7, CTR 41%, Impressions 12 (So it wasn’t a volume issue). Ave CPC to date = $0.87 Ave Pos 1.1
Day 7 – Lowered bid from $0.80 to $0.25
Day 7 – First Page Bid Estimates on other KW in ad group, dropped from $1.00 to $0.20 where QS rose to 6 from 3-4
Day 7 – First Page Bid Estimates on other KW in ad group, dropped from $1.00 to $0.30 where QS rose to 5 from 3-4

The Search Engine Marketing Professional’s Organization (SEMPO) hosted us for our latest webinar: Quality Score in High Resolution.

Quality Score is just as important at keywords and bids in PPC, but isn’t nearly as well understood. In this webinar you’ll find thorough explanation of what Quality Score is, what it means and how you can improve yours.

If you like the webinar, check out our Quality Score white paper.

This week on PPC Rockstars Mr. David Szetela and I get serious about AdWords Quality Score.

Listen in, but this one is not for the faint-at-heart.

Available at Webmaster Radio or on iTunes.

This series of blog posts did eventually become a book about quality score – in June 2011 ‘Quality Score in High Resolution‘ will be released.
More details and ordering information can be found here.

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 series of blog posts did eventually become a book about quality score – in June 2011 ‘Quality Score in High Resolution‘ will be released.
More details and ordering information can be found here.

Other Posted Chapters:

1. Preface: Quality Score in High Resolution
2. Chapter 1: Quality Score in High Resolution
3. Chapter 3: Reviewing Official Google Quality Score Information.
4. Chapter 4: Why Google Has Quality Score (Pt 1 and Pt 2)

This post continues Chapter 4, which began in the previous post.

In that post we discussed how Google uses Quality Score to rate keywords and ads on their performance and relevance. We looked at the first of three reasons why they have Quality Score, which as to make it harder for bad guys to run bad ads. Today we examine the other two reasons.

Quality Score as Preferred CustomerProgram
Just as it’s in Google’s interest to prevent or penalize bad advertisers, it’s in their interest to promote good ones.

High Quality Score advertisers have proven their ability to get high CTRs on both a keyword-level and in overall account averages. They buy more clicks from Google, albeit at a slightly reduced CPC, and have proven their ability to build, manage, and grow their accounts. And they’ve proven that they can satisfy searchers.

It’s entirely in Google’s interest to keep these advertisers – big spenders who by definition are satisfying searchers – happy and active. By getting high Quality Scores these advertisers get a discount on their CPC (more on that later) and an edge – the benefit of the doubt if you will – when they run new ads or enter new keyword categories.

Quality Score as Secret Sauce
The fact that Quality Score is a secret formula which has so much influence over the performance of your paid search account is a clear advantage to Google.

Suppose you’re dissatisfied with how frequently your ads are run, or their average position, or the price you’re paying per click. On just about any other advertising or marketing platform, this would be grounds for a serious conversation with your vendor.

But on Adwords there is no need for such a conversation, because all of the above problems are your fault; your keywords didn’t earn sufficient Quality Score to have more impressions, better position, or a lower CPC. So it is your responsibility to figure out how to improve your Quality Score.

The lack of clarity as to how to go about this (hence the need for this book) is you’re problem.

To help make clear how amazing and unusual this is, imagine Google’s rules applied in another situation. Suppose your monthly mortgage statement had variable pricing (no I’m not talking about your ARM) that was based on the ‘Quality Score’ your home received for the prior month, based on a list that included the attractiveness of your yard, the cleanliness of your home, the desirability of your neighborhood, and ‘other desirability factors’.

Would it bother you when you went to write that check that you weren’t allowed to see your score on any of these attributes, and weren’t provided any specific information about the way they were judged or calculated? Can you imagine signing a mortgage and agreement to make those payments with those terms and conditions?

Imaging Being Google
Better yet, imagine yourself the owner of a company with a large national client base.

With customers who had agreed to buy from you on a regular ongoing basis, despite the fact that you were going to change the particulars of the service you provided to them, and the amount that you charged them, on a regular basis.

And you were going to make these changes based on proprietary formulas of which they only had limited knowledge, and were given no fore-warning of the outcome – they were committed to paying regardless of the actual service or actual fees (with some basic range limits in place).

Wouldn’t that be great?

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About This Post
This series of blog posts did eventually become a book about quality score – in June 2011 ‘Quality Score in High Resolution‘ will be released.
More details and ordering information can be found here.

Other Posted Chapters:

1. Preface: Quality Score in High Resolution
2. Chapter 1: Quality Score in High Resolution
3. Chapter 3: Reviewing Official Google Quality Score Information.
4. Chapter 4: Why Google Has Quality Score (Pt 1 and Pt 2)