PPC managers give significant attention to bid management in the quest for higher ad rank, better return on ad spend, and more revenue. While important, bid management is only half of the equation in determining ad rank, which influences click-through rate (CTR) and revenue as we recently discussed. The other half is the Quality Score (QS) in Google AdWords.
QS is a keyword-specific rating that shows how successfully you are advertising a given term. It is determined mainly by two factors: (1) the historical CTR of the keyword and of the account, and (2) the relevance of the keyword to both the matched ad text and the user’s search query. CTR and relevance are interrelated: a relevant ad will generate a much higher CTR, and Google uses CTR data to determine the relevance of a particular keyword and matched ad text.
The most important application of Quality Score is in determining cost per click (CPC). Google strives to influence advertiser behavior by rewarding higher scores with lower CPCs. If an advertiser is willing to spend heavily in order to achieve a higher ad rank for a keyword with a low QS, the advertiser will pay much more per click than an advertiser pushing the same term with a higher QS. In this way, Google fosters a Darwinian system wherein good ads thrive and poor ads fail over time. This improves the user’s experience, which leads to Google getting paid more often for clicks. Google uses this Darwinian model to make sure that all three parties (the user, the advertiser and Google itself) benefit from the advertising experience.
The best way to leverage QS is to ensure paid ads are only seen by qualified traffic, generally by bidding on unambiguous keywords that demonstrate intent on the user’s part. Also, any non-essential keywords that are underperforming (as evidenced by low QS) should be paused immediately, especially if they are garnering a large number of impressions. The intent-driven unambiguous keywords will have higher scores (and therefore cheaper, more efficient CPCs) and will improve the historical Quality Score across the account. This will instantly improve the Quality Score for all new keywords added to this now well-groomed account, as well as improve the efficiency of ad spend across the account.
For more information about this topic, check out the new book, Quality Score in High Resolution by Craig Danuloff (the Founder of ClickEquations and Chief Product Officer at Channel Intelligence). Danuloff details best practices and step-by-step methods for improving QS and making the most of AdWords data, all while maintaining a personable yet direct voice. I highly recommended this book to PPC managers who take Quality Score management seriously.
Image courtesy of Google.