Quality Score Directly Impacts CPC
Many companies are still unaware of how ads are priced in the AdWords cost-per-click advertising system. The math has gotten more complex because a black box element was introduced.
To help understand the impact of QS on pricing, it can be helpful to look at how it used to work in the past when the mathematics were simpler, as well as how Google makes money.
How Ads Used to be Priced
Did you know AdWords used to be a CPM based system? The ads that appeared above the organic results were the ones whose creators were willing to pay the highest CPM.
When AdWords Select was introduced, the CPC ads began to generate higher CPMs than the ads placed through the original AdWords system.
Google rebranded AdWords CPM as AdWords and sunsetted the former after quickly shifting their entire business to Select. The reason Select was so successful is that Google would rank ads with this simple formula:
The formula used for determining ad placement also takes into account the relevance of the ad, rather than relying solely on CPC. This prevents ads with high bids but low relevance from taking up all the top slots.
Ad rank is increased by either doubling the maximum bid, doubling the CTR, or a combination of both. To keep the same ad ranking, you would only have to pay half the CPC if your CTR increased by two.
If two advertisers were bidding the same amount, the one with the better CTR would get the top spot and pay a lower CPC than the other one.
The success of AdWords for smaller companies is due to the fact that it is relevant. Their smaller advertising budget allowed them to compete based on relevance.
Quality Score is Mostly CTR
QS, or Quality Score, is a metric used by Google to determine ad rank. Quality Score is based on a variety of factors, including CTR, relevance, and Landing Page Quality. The three components that make up Quality Score are CTR, relevance, and landing page quality. It seems that the first two factors are both about the click-through rate, so let’s look at each one more closely.
The CTR Factor of QS
The largest component of Quality Score (QS) is historical Click-Through-Rate (CTR), as Hal Varian, Google’s Chief Economist, has stated publicly.
Since Google makes money by prioritize ads with high CPM, it makes sense that they would do this. Google uses a CTR that is not shown to advertisers.
Google wants all ads in an auction to have an equal chance, so they compare the CTR of each ad. They only use data from Google searches and the CTR when the query exactly matches the keyword.
Google considers both mobile and desktop CTRs when determining Quality Score. The Quality Score number can be seen in Google Ads accounts next to each keyword.
The Relevance Factor of QS
Advertisers were very upset when I helped launch QS and retire CTR as a factor in ad rank. The element that made advertisers uncomfortable was the lack of transparency.
However, although it is not a transparent factor, it is just a different way of looking at CTR.
Google launched their Quality Score system because they understood that historical Click-Through-Rates could only go so far in predicting relevance and they could build a system to better predict the CTR for every query in real-time based on a wide range of other factors.
For example, people click on different things at different times of the day and week, depending on where they are located, what type of device they’re using, and what additional words they type into the search box.
Google is looking for relevance when it comes to CTR, but CTR is still a factor.
This system is designed to choose the best ad to show for a search for “Steve Jobs” when there are two advertisers using the keyword ‘jobs’: one a career site, and the other a publisher of biographies.
The system can only determine the relevance of the ad for the book, and not any other ads. The career site’s ad would have shown instead of the current ad if the site was only looking at historical CTR.
The Landing Page Quality Factor of QS
Advertisers are always looking for ways to get more clicks, and sometimes this can lead to low quality, repetitive, and scammy ads. Google has faced a quality crisis in the past because of this. They implemented the landing page quality element to identify and remove bad advertisers.
It’s actually quite similar to Panda in SEO. Panda continues to get better at identifying different types of poor content with each new iteration.
Landing pages that are low quality should be ranked lower, while landing pages that are good quality should be ranked higher.
This safeguard helps to ensure that users have a good experience and continue to trust ads, which in turn protects Google’s revenue stream.
The Impact of Ad Extensions On Quality Score
Now Google also factors ad extensions into ad rank. Although ad extensions do not affect ad quality score, they can significantly improve ad click-through rate. Therefore, it is logical for Google to consider this when determining ad ranking.
If only one of two competing ads has sitelinks, which increases the click-through rate by 17%, Google will certainly take that into account when calculating the cost per thousand impressions (CPM), which is used to rank ads.
Ad extensions can lower an advertiser’s CPCs by doubling the CTR.
The fact that a higher click-through rate doesn’t always lead to a higher position for an ad is because a higher position results in a higher cost per click. Although it’s not specifically called CTR, a ranking factor is really all about the CTR.
Quality Score Misconceptions
1. Changing Match Types Alters Quality Score
Despite keyword match type, google essentially measures quality score. If you have an exact match, a broad match, and a phrase match of the same keyword in your account, they will all have the same Quality Score.
Google uses an algorithm to match a keyword to a query, which then affects the QS. This means that the Quality Score for the keyword “pink slippers” will be the same regardless of the match type.
2. Quality Score Suffers when Ads or Keywords are Paused
Stopping your ads or keywords will not have any effect on Quality Score because Quality Score is based on how well your keywords and ads are doing. If a company is not active and, as a result, is not entering the auction or being shown, there is no Quality Score to be earned.
3. Display and Search Quality Score Affect Each Other
The Quality Scores for your ads and keywords are separate and don’t affect each other. The Quality Scores for each ad are determined by different criteria.
The search and display networks are two very different things, so it would be difficult for Google to have one affect the other. One performance will not affect the others.
4. Higher Positions Benefit Your Quality Score
Quality Score is not just based on the click-through rate. It is also adjusted for ad position.
Google believes that higher positions tend to get more clicks than lower positions, so they make changes to their formula to prevent the higher positions from always having an advantage.
5. Deleting or Restructuring Low QS Elements Erases Their History
This is not true. This means that if you make changes to your account, it will still affect your account history.
Even if adjusting your keywords and ads won’t delete your account’s history, Google still recommends that you delete poor-performing keywords and ads. This will prevent them from further negatively affecting your account history in the future.
Gathering more performance data over time will lessen the negative effects of poor-performing elements, although they will never completely disappear.
Getting a Better Quality Score
The way to have more relevant ads is to have more relevant keywords and to structure ad groups in a way that supports higher relevance.
You can improve your ad campaign by dividing your ad groups into smaller, more specific groups with targeted ad text. This is especially true for ad groups with more than 30 keywords. You should focus on improving your click-through rate (CTR) by always testing new ads using the A/B split test method.
Check your destination URLs. Have you made recent changes to your landing pages? Are any of the destination URLs broken? Do they all lead to working landing pages?
Below is a list of symbols that could break your destination URLs and what you can replace them with:
- (-) The world’s surface is two-thirds water and one-third land. The world’s surface is two-thirds water and one-third land.
- Commas; replace them with a blank space or dash
- Apostrophes; replace them with nothing
- Parentheses; replace them with nothing
- Ampersands; replace them with a blank space or dash.
To check your site’s speed, you can use Webmaster Tools or Google Analytics. If your page’s load time is below three seconds, it could be negatively affecting your Quality Score.
What are some factors that contribute to a slow load time?
- Check out Google’s page speed Chrome & Firefox extension.
- Rewrite low click-through rate ads. Google considers a low CTR to be <1.5%.
- Make sure that you have at least three ads that are longer in every ad group.
- Ensure top-performing keywords are in your ads.
- You may want to try using Dynamic Keyword Insertion (DKI) ads to increase your Click-Through Rate (CTR).
- Conduct an account audit and restructure where needed.
- If you have a keyword with a CTR that is less than 1.5% and it’s not resulting in many conversions, you may want to pause it.
- Create smaller, more tightly themed ad groups.
- The landing pages for each ad group should be relevant.
Adding broad match keywords to your campaigns can help you reach a wider audience. Your Quality Score is initially based on your account history when you add new keywords. A new keyword only starts to show a Quality Score that is unique to it once it reaches the impression threshold. Broad match can help your keywords reach the impression threshold so they can begin accruing their own unique Quality Score.
Quality Score Matters
Google wants ads to be relevant to users’ search queries, and Quality Score is one way to measure that.
Google is the most popular search engine and they want to keep it that way, and Quality Score helps them ensure that the ads users are seeing are relevant to their search queries.
Quality Score is important for advertisers because it: -Increases ad rank -Reduces cost per click -Increases click-through rate This metric is used to determine whether a keyword can be used in an auction, which will then show your ad to users when they use the Google Search Network.
Quality Score, CPC bid, and ad rank are all connected. Quality Score is especially important for advertisers who have a limited budget. The ad rank formula for the Google Search Network is as follows:
Ad Rank = CPC bid × Quality Score
Advertisers with small budgets can improve their Quality Scores to compete with advertisers who have higher budgets but lower Quality Scores.
The higher your Quality Score is, the higher your ad will be placed on the page. google display network Quality Score affects ad placement. Higher Quality Score means higher ad placement on the page. The ad rank formula for keyword-targeted ads is as follows:
Ad Rank = Display Network bid × Quality Score
Google uses the bid you’ve set for an ad group, as well as your ad group’s Quality Score, to determine your ad’s placement on the GDN. The ad rank formula for placement-targeted ads on the Google Display Network is as follows:
Ad Rank = Bid × Quality Score
Ultimately, Quality Score affects your account health and success. If your keyword-level Quality Score is low, your keyword might not be able to enter an auction, which means your ad will not be shown and you will not be able to compete for a searcher’s business.
If your Quality Score is low, your ad rank will also be low, which means that you will get less traffic to your website and a lower ROI.
