Understanding the Importance of Quality Score in PPC Advertising

As a Digital Marketing Manager in an agency environment, finding new insights on ad optimization for clients is critical to maximizing their effectiveness. There is a plethora of information online when it comes to optimizing Adwords ads, which gives you many more levers to pull than other PPC platforms. Some Adwords optimization techniques are relatively straightforward and some are considerably more complicated and muddy. Understanding what Quality Score is, how it affects your ads and how to improve it, definitely fits into the muddy category.

Online articles offer a fairly large repository of information on how to achieve a high Quality Score. Yet, like most aspects of PPC you don’t get the full story until you have pulled all the levers to see what works.

 

What is Quality Score and how does it affects your PPC ads?

 

Google defines Quality Score in its most basic terms as:

Quality Score is an estimate of the quality of your ads, keywords, and landing pages.

Higher quality ads can lead to lower prices and better ad positions.

Not the most helpful definition.

 

Breaking down Quality Score and understanding how it fits into the Adwords Auction System

 

Quality Score is really just an aggregated estimate of your overall performance in ad auctions displayed on a scale of 1-10 in your account determined by three things:

• Expected Click Through Rate
• Landing Page Experience
• Ad Relevance

 

Each time a person enters a search term that you have selected as a keyword in your Adwords campaign your ad enters into the Auction System with other competitors that are also serving ads on that keyword. Whether or not your ad is shown and in what position is determined by Ad Rank, not by Quality Score.

 

Ad Rank is a real-time, auction-specific calculation that the Google Auction System makes to determine if and at what position your ad is shown. The exact formula is a well-guarded Google secret but three things really determine Ad Rank:

• Quality Score
• Bid
• Ad Extensions

 

Why does Quality Score matter to your bottom line and how can higher Quality Scores “lead to lower prices?”

 

Optimizing your Quality Scores can lead to higher return on investment (ROI) because higher Quality Scores correlate with lower cost per click and ultimately lower cost per conversion (aka cost per acquisition). Good Quality Scores lower both your cost per click and your cost per conversion.

According to the experts at Wordstream, “A high Quality Score is Google’s way of saying that your PPC ad meets your potential customers’ needs. The better you are at meeting the prospect’s needs, the less Google will charge you for the ad click.”

 

Source: http://www.wordstream.com/quality-score

 

Tactics to improve Quality Score and increase your ROI

 

Looking at the three factors that make up Quality Score:

 

1) Expected Click Through Rate: Expected CTR is Google’s estimation of the rate at which ad viewers will click through from your ads to your landing page. In calculating Expected CTR, Google considers how well your keyword has performed historically, based on the position of your ad. One of the best ways to make sure this metric is high is to make sure you create tightly themed, relevant ad groups from the very start of your Adwords account. It is very hard to make up for a poorly organized account structure to raise your expected click through rate.

2) Landing Page Experience: This is all about relevancy from the ad copy level all the way to the desired conversion on the landing page. The absolute best thing to do is create specific, relevant landing pages for each of your ad groups rather than just sending all traffic to your homepage. This way you can control the user experience all the way through and optimize the landing page for the exact keywords you are targeting in the ads. This is also a good SEO tactic and will boost your organic traffic via those keywords.

3) Ad Relevance: If you have specifically designed landing pages this pretty much takes care of itself. Remember to include your keywords in the ad copy, the URL and copy in the landing page so that the relevance of the ad is cohesive at every step of the process.

 

Looking at the three factors that make up Ad Rank:

 

1) Quality Score: See above.

2) Bid: Ad Rank uses three criteria to determine the winners in the auction system so that advertisers with higher budgets cannot simply outbid you and win every time. Google uses what is called a “Second-price Auction” meaning that to beat a competitor and maintain ad position, you only have to pay the minimum amount. This encourages you to bid your true highest amount you’re willing to spend on a click and Google will adjust your actual bid so a maximum bid of $5 may actually win the auction at a price of only $4. So when it comes to your bid, do the math to figure out what the maximum amount is you are willing to pay for click and /or use tools like Keyword Planner or SEM Rush to find out a suggested bid for your keywords.

3) Ad Extensions: The exact reason why Ad Extensions matter and how they are factored into Ad Rank is unknown but it most likely has to do with the fact that they offer the user more information in the Search Ad which likely contributes to a better user experience and thus higher expected click through rate. Turn on as many of these as make sense for your business. It’s simple and effective.

 

Conclusion

 

Ultimately if you want to increase your Quality Score in an effort to increase your ROI, the most important thing to keep in mind while setting up ad groups is to keep them relevant to the user and your service or product. Keep your ad groups tightly themed and use the keywords throughout every level of the Adwords user journey. Doing so will reduce wasted spend and improve campaign performance.

PPC Advertising is one of the more complex channels in the modern digital marketing ecosystem. When you understand all the moving parts and how to optimize, it can benefit you or your client’s business tremendously. Good luck out there and get in touch with us if you think we can be of help.