Why Google Ads Quality Score matters?
It is amazing how many advertises (meaning digital advertisers) out there don’t know or don’t care about Quality Score. To be fair, it mostly applies to those who don’t really know anything about Google Ads or never put any effort in learning ins and outs of Google Ads. Incredibly, you can see both small and big accounts, spending thousands upon thousands every month, not monitoring Quality Score of their keywords and overpaying for their clicks and conversions. Good, you may say now, they have deep pockets, they can afford it, they deserve it. Maybe so. Actually, you are right, that’s where we come, that’s where we can make money. Either by optimising their accounts and cashing nice commissions in return or working for competition and utilising the mistakes. Still, it’s quite incredible.
So let’s talk about Quality Score. What it is and why Google Ads Quality Score matters. First what you need to remember is that Google makes money from advertising but their core objective is to refer user to content they are looking for. So it’s really a referral system. You type a query and Google provides you with answers. And, to be honest, in their own interest is to be as precise as possible. In their interest is to provide you with quality answers… or you go somewhere else. And that’s what Google doesn’t want. They are not in a business of letting you go to competition. To Bing. Or Yahoo. No, oh no.
Before we get to Quality Score itself we need to explain another term – ad rank. Ad rank is a number that determines where on a Search Engine Result Page (SERP) your ad will show. What slot it will take against the other competitors. Studies, and common sense, show us that you need to be on the top of the page to increase likeliness of your ad to be seen. As simple as that. And your position is not a constant. Not a given. Every time a search is performed (on Google) your ad rank is re-calculated against your competitors.
Up until 2005, when Quality Score was introduced by Google, the bidding was quite simple (in comparison to what’s happening now). Higher your bid was, more you were willing to pay for a click (your Max CPC), higher you would show on a search page. Actually, the formula was taking into account not only max CPC but also CTR (click-through rate) but the results were usually the same, unless you had no clicks, your highest bid would take the highest spot. Then Quality Score came and everything has changed.
Quality Score is a Diagnostic Tool
Quality Score, as Google explains it, is a diagnostic tool meant to give you a sense of how well your ad quality compares to other advertisers. Quality Score is a number calculated on a scale 1-10 on a keyword level. Where 1 is bad, really bad and, obviously, 10 is very good. The calculation is based on the performance of search queries against the keywords. Higher you score, more relevant, according to Google, your keyword is to the search of the user. It is based on historical impressions for exact searches of your keyword. What it means you need to have a certain level of impressions to have your keyword relevance evaluated. And changing the keyword match won’t impact QS.
Pro Tips: You can check your keyword Quality Score by going to your keywords and clicking Colums (QS is hidden by default) and Modify Columns. Then go to Quality Score and tick relevant option. You can drag and rearrange columns to make it more readable. And then Apply or Save your column set.
There are 4 main components influencing QS on a keyword level:
- Click through rate (CTR)
- Ad relevance or rather how relevant is the keyword against the text of your ad (ad copy)
- Relevance of keyword that triggered your ad impression against the query the user typed into query box
- Landing page relevance
Why Google Ads Quality Score Matters?
So, why Quality Score matters? From Google’s point of view, Quality Score matters because it represents relevance of your ad to the users and their queries.
For you, as an advertiser, QS is also important as it’s one of the main deciders of how much are going to spend. Even before that, QS determines if your keyword is eligible to enter the auction, meaning if it will show to the user upon a query. If your keyword is eligible to show the fun starts as Quality Score, together with your max CPC bid, determines everything, the ad rank I mentioned before and the actual cost of your bid.
Do you remember I mentioned before QS everything was simple, more money you were willing to spend higher you would be on a page? Now, since QS it’s no longer true. Quality Score is a real gamechanger, incredibly important especially for smaller advertisers with limited budget as it gives you a way of ranking high without spending much. The ad rank formula for Google Search Network is simple enough:
Ad Rank = CPC bid × Quality Score
Ad rank and Quality Score in work
So how does it work? Imagine you have 5 people bidding against the same keyword with bids ranging from 1.5 to 8.5. In the old system (without QS) the most likely position would be reflected by column no 2 below – Bid (Max CPC) meaning whoever has the most money wins. Qith QS adjustment it’s no longer the case and as you can see by column Position below it is no longer the case. It is Advertised C with the max CPC bid of 5 that takes the top position despite bidding much less. In fact the Advertiser A with the highest bid wouldn’t show at all!
| Advertiser | Bid (Max CPC) | QS | Ad Rank | Position |
|---|---|---|---|---|
| Advertiser A | 8.5 | 1 | 8.5 | 5 |
| Advertiser B | 8 | 4 | 32 | 2 |
| Advertiser C | 5 | 8 | 40 | 1 |
| Advertiser D | 3 | 6 | 18 | 3 |
| Advertiser E | 1.5 | 9 | 13.5 | 4 |
Now let’s rearange the table and work out the actual cost of the bids. Max CPC is not what you actually pay, it’s the most you are willing to pay. The actual amount you pay is the minimum you need to maintain the position above the one below you. Simply put, as per table below, to calculate the cost of a bid of advertised in the position 1 (Advertiser C) you take the ad rank of the one below (Advertiser B with ad rank of 32) and divide it by QS of Advertiser C.
calculation for Advertiser C:
32 (ad rank of Advertiser B) / 8 (QS of Advertiser C) = 3
| Advertiser | Bid (Max CPC) | QS | Ad Rank | Actual Cost |
|---|---|---|---|---|
| Advertiser C | 5 | 8 | 40 | 3 |
| Advertiser B | 8 | 4 | 32 | 6 |
| Advertiser D | 3 | 6 | 18 | 2.25 |
| Advertiser E | 1.5 | 9 | 13.5 | 0.94 |
| Advertiser A |
What does it mean for Advertisers?
With Quality Score as a heavily influencing factor the amount of many you are willing to spend is not the only factor any more. Small budget is not longer an entry barrier and advertisers who don’t have such deep pockets can work on optimising keywords and ads in order to become competitive. That’s probably the main take away. Quality score is something you can work on in order to have your ads served and compete with bigger players spending much more money.
Boss Level – Account level QS
I mentioned the Quality Score works on a keyword level but I should also mention that although Google never officially confirmed it, but it is generally accepted that there is also an account level quality score which is a result of the historical performance of all keywords in the account. It means that if you have a large number of keywords with very low QS and poor CTR, if your ads historically didn’t perform so well, it will drag down your overall Quality Score. Something to think about when you structure and optimise your account.
Key Takeaway
So to sum up, Quality Score matters. It matters if you are a big player and it matters even more if you are a small one. The formula combining your max CPC with QS makes the game much more competitive and gives you a better chance to score, even if your pockets are not too deep. Just focus on Quality Score and you still have a fair chance!