Mastering PPC: Quality Score, Ad Rank and Why They Matter

Search engines are really, really good at extracting every last bit of revenue of every search. We’re never going to fully understand Google or Bing's algorithm or everything that goes into PPC pricing. What we can do is explore the fundamentals of how the PPC marketplace works, what factors we can control and how we can use them to drive down our CPC.

What is quality score?

Quality score is a relevance barometer for search engines. While the term was coined by Google, every CPC-based advertising medium has it in some form or another. There are a number of variables involved (some of which we may never know), but below is a list of known factors, per the Google help center

• Ad/Keyword/URL Click Through Rate (CTR) – far and away the biggest factor in quality score
• Historical account CTR – how has the account done over time?
• Landing Page – is your landing page relevant to the ad and keyword? Is it transparent and easy to navigate?
• Relevance – how relevant is your keyword to the ad? The keyword you’re bidding on to the actual search?
• Geographic performance – how well does your ad/keyword/account do in a given geographic area?
• Device performance – how do all of the above factors perform on tablets or phones?

We can boil quality score down to two simple factors. Is the ad likely to get clicked by a searcher (and make the engine money)? Is the user going to have a good experience before and after the click?

It’s important to note that quality score is calculated every time there’s an ad auction. Every single time a keyword or display ad is eligible to show there will be a new measure of quality score that we will never see.

What does quality score look like, and how is it shown to me?

A breakdown of quality score is available on the keyword level for AdWords, and gives you a breakdown of three relevance factors that go into it: expected click-through rate, ad relevance and landing page quality. To see an individual keyword’s quality score and how it’s broken down, navigate to the keyword tab in Google and hover over the small voice bubble in the status column.

Google will provide you with your raw quality score number, along with how your keyword performs relative to the competition (average, below average or above average).

Note that I said relative to the competition; quality score is not calculated in a vacuum. There are some keywords that, no matter what an advertiser does, will always have a low raw quality score. That doesn't mean an ad or a keyword is bad per se. It may just mean that historically Google hasn't seen it to be a particularly good user experience to show ads with a given query.

Now, why is all of this quality score business important? It factors directly into Ad Rank, ad position and CPC!

What is Google AdRank? How is Ad Position calculated?

As complicated as the Google auction seems, the way they calculate Ad Rank is actually pretty simple. Your Ad Rank is bid multiplied by quality score, and it’s calculated for every single query. An advertiser won’t necessarily pay how much s/he bids, but will only pay enough to beat the advertiser who ranks below. A quick chart is outline below to help visualize.

Bonus points if you can identify the source of the names.

It’s abundantly clear that quality score is extremely important, as it essentially determine how much you pay in the ad auction.

I'd love to pay less! How do I increase quality score?

There are a ton of schools of thought on this, and a number of dissenting opinions, so I’ll lay mine right out on the table. Don’t optimize your account for quality score. Optimize for conversions, for clicks, for whatever makes you money. Paraphrasing a mantra that Wil has preached for years, you can’t pay your rent in quality score. Below is a quick list of things you should and shouldn't do to boost your quality score:

Do:

• Adjust your ads based on performance to get the highest CTR, while maintaining ad relevance
• Test display URL’s to see which resonate with users
• Get rid of hyper-broad keywords. Don’t just pause – delete them.
• Delete poor performing keywords. If keywords have zero impressions (or worse, tons of impressions and zero clicks) and a low quality score, get rid of ‘em. This May not help, but it won’t hurt either.
• Closely monitor search query reports and negatives to make sure your keywords are relevant.
• Create landing pages that’s a great user experience.
  • Note: this is the one area that I’d pay close attention to from a quality score perspective. If your LP experience is below average, start adjusting and adjust fast

Don’t

• Cut keywords that convert just because of a low quality score. If you’re bidding on your competitors branded terms, your quality score will likely be below average. That doesn't mean they’re bad keywords, or that the campaigns can't generate a strong ROI.
• Cut ads or keywords based entirely on click through rate. If they drive conversions, they may not be so bad.
• Create a new account to try and beat bad quality score history. History (quality score and otherwise) is tied to the domain, not to the individual account.
• Stop testing. Always test!

Google PigeonRank is the real factor

Further reading:

This is but a very basic primer on quality score, and is really only one man’s opinion/views of quality score. No matter how in depth we get or how much research we do, quality score will always be a mystery of sorts as engines will likely never give us the secret sauce. I’d recommend the following posts as further reading:

• Quality Score Explained By A Former Googler by Frederick Vallaeys
• The Importance of Quality Score by Larry Kim
• Introduction to the Ad Auction – an oldie but goodie by Hal Varian (Google’s Chief Economist)