Google AdWords Quality Score: Understanding what it means
If you have been advertising using Google AdWords you are probably familiar with the term quality score. You might even know what it is but very few advertisers actually know more than the very basics.
In Google AdWords, quality score is a rating given to describe how relevant your ad is to the people for which it is trying to display. Google AdWords ads can display with search results, on websites or blogs, in videos and on apps. Quality score is primarily used to determine relevancy in search results. People perform search queries in search engines such as Google or Bing.
Google’s Search Algorithm and Users
The search engines use algorithms to determine which pages on the internet are most relevant to what this person is searching for. From here on we will call these people Users. Google also displays paid ads along with the search results and these ads are ranked by relevancy, similar to how pages in the natural or organic results are ranked.
While Google’s search algorithm is a constantly evolving formula that Google is very protective of, the formula for ranking ads is very simple. Ads are ranked by bid amount x quality score. So if you have a bid of $2.00 and a quality score of 6 your ad rank would be $2.00 x 6 or $12.00.
An advertiser with an ad rank above $12.00 would have their ad placed above your ad and advertisers with an ad rank below $12.00 would have their ad placed below. Your ad rank is very important because this will determine your position on the search results page and CTR is normally much better the higher on the page your ad is shown.
Most AdWords advertisers’ understanding of quality score ends with that formula. They see a quality score given to each of their keywords in their AdWords account. Quality score is given as a number between 1-10, with 10 being the most relevant and 1 being the least relevant. The average quality score is normally a 4, 5, or 6.
Now before I go into much more detail on what quality score is, you should know that for all practical purposes, you could do just fine with that limited knowledge. This article is being written for those advertisers who want a better understanding of Google AdWords Quality Score.
AdWords Quality Score Example
Let us begin with the keyword quality score. A 1 quality score is the worst possibility and a 10 is the best. If you have keywords with a 1 as the quality score you should pause or delete that keyword immediately. A quality score of one tells you that Google does not think that keyword is relevant at all to what you are advertising and because of that your bid amount will have to be high in order for your ad to rank high enough to display when a user searches for that keyword.
If another advertiser has a quality score of 2 for that same keyword, you would have to bid roughly 2x as much to qualify for the same ad position. I use the word roughly because even if you are shown a quality score of 1, this is an average which is rounded off to the nearest whole number. A quality score is generated each time your ad is eligible to display for a given search query. Let’s use an example to make it easier to understand.
John, in Chicago, does a search for flower shops. You are bidding on the keyword flowers and Chicago is in your targeted area. In your AdWords account you see that you have a quality score of 5 for the keyword flowers. When John performs his search a more exact quality score of 4.78 is generated for your keyword for that specific search. The quality score you see in your account is an average of all the quality scores that keyword has generated for you.
Rounding the Quality Score
Actual qualities scores would be generated to the nearest .01 at least and most likely to more decimal places than that to avoid any ties when ranking ads with the formula bid amount x quality score. It has to be at least to .01 which could represent the lowest bid increment of $.01. When a search query is performed in Google there are 8 ad positions available on the first page. Once all the eligible ads are ranked cost per click is determined by what bid amount was necessary for the ad clicked on to place above the ad below it by 1 penny or $.01.
This is why your cpc might be only $.37 when you had a max bid of $1.00. You are only charged the minimum amount required to beat the ad that displays below you. That is why it is possible that if you have a high quality score you can place above a competing ad and still pay less than they do for a click.
We will pretend we have 3 ad placements available and there are 4 advertisers competing for those 3 placements. The User is our friend John and he is still search for a flower shop. All 4 advertisers are bidding on the keyword flowers and their ads are all eligible.
- Advertiser 1 -max cpc $2.00 and a quality score of 6
- Advertiser 2 – max cpc $1.25 and a quality score of 10
- Advertiser 3 – max cpc $2.25 and a quality score of 7
- Advertiser 4 – max cpc $3.00 and a quality score of 3
I am using nice whole numbers for quality score for my example. The question is which 3 advertisers will earn the 3 ad placements and how much would they pay for a click?
In this example Advertiser 4 is the lowest ranked ad using the formula bid amount x quality score and would not get any of the 3 positions. Advertiser 3 would get the top ad position, advertiser 2 would be the 2nd, and Advertiser 1 would be in the 3rd position.
Gauging Cost Per Click
Now we want to determine how much each advertiser would pay for a click. In order to calculate the cost we start with the lowest ranked advertiser which in this scenario would be AdVertiser 4. Again his rank would be 9.00 or ($3.00 x 3).
Advertiser 1 was the 3rd ranked ad, so to determine their cost per click we simply do a little quick math. We know Advertiser 1 must beat Advertiser 4 by .01 so we add .01 to Advertiser 4s’ rank to get $9.01 and divide that by Advertiser 1s’ quality score of 6 and round it off to the nearest penny. Advertiser 1 would pay $1.50 for a click.
Advertiser 2 was the 2nd ranked ad, so determine their cost we must calculate how much it would take to beat Advertiser 1s’ rank. We divide $12.01 by 10 so Advertiser 2 would pay $1.20 for a click. You will notice that due to the high quality score of 10 Advertiser 2 is paying less per click then the ad below them.
Using the same math Advertiser 3 who got the top spot, would pay $1.79 for a click.
The description of ad rank in the Google AdWords Help Center does not cover this much detail as it is usually not necessary to know this much to run an effective AdWords campaign. You will do alright just knowing what quality score is and that higher scores are better but I personally feel that if you understand how much quality score can affect your rank as well as your cpc you will have an advantage over your competitors in gaining the better position. You can learn more about how ad position affects CTR by reading my article “Adwords CTR by Ad Position”.
Quality Score – https://support.google.com/adwords/answer/140351?hl=en