Many marketers have experienced the impact of Google's Quality Score in their AdWords campaigns and know it's an important piece of the SEM puzzle. But what exactly is Quality Score and how can it be improved?
As publicly traded companies, the primary objective of search engines is to maximize their short- and long-term revenues. To do this, they have created auction based systems that prioritize ad delivery based on the predicted revenue they will receive by displaying an ad. Ads that are predicted to deliver high revenues are shown higher in search results than ads with lower predicted revenues. This is the basis of ad rank.
The predicted revenue that an ad will generate depends on two factors; how much an advertiser will pay for a click and how likely it is that an ad will be clicked on. Thus, ad rank = bid x predicted CTR.
In the simplest terms, Quality Score is the predicted CTR of an ad. So how do you predict whether an ad will be clicked on? Google uses numerous factors to predict CTR, but the most heavily weighted element is the historic CTR. This makes sense as the historic CTR is an objective measurement of past performance and a relatively good indicator of future performance. Here's an example to illustrate how the bid and historic CTR work together:
Bid Historic CTR Predicted Revenue Ad Rank
Ad 1 $1 10% $0.10 1
Ad 2 $2 3% $0.06 2
Ad 3 $4 1% $0.04 3
As you can see, Ad 1 has the highest predicted revenue due to its high historic CTR and is shown in the top position. Even though its bid is lower than the other ads, its high CTR means that it is more likely to generate revenues for the search engine. One interesting note is that it is not the absolute CTR that improves ad rank, but having a CTR that is higher than your competitors.
So far, so good, but the historic CTR isn't the only factor that influences Quality Score. Another factor is the relationship between the keyword, creative, and landing page. This is to help ensure that search results remain relevant and that users aren't deceived with bait and switch tactics. The search engines crawl the landing pages of advertiser sites and identify the themes of each page. They then compare those themes with the themes of the keywords and ads. If there is a common theme for all three, then the Quality Score is unaffected. However, if one or more components is unrelated to the others, the Quality Score is penalized. For example, a search for 'new iPad' that shows an ad for the Amazon Kindle and then lands a user on a page promoting a get rich quick scheme would likely be penalized to the point where there ad would not show, even with a ridiculously high bid.
So how can you improve your Quality Score? Either 1) improve your CTR, 2) make sure you align your keywords, creative, and landing pages, or 3) both. Your efforts will be rewarded with a lower CPC and a higher ad rank.
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