With the continuing expansion of ad space at the top of the page (from ad extensions like sitelinks with descriptions), it’s more important than ever to make sure your ads have a great ad rank. But CPCs are on the rise –
so unless you can improve your conversion rate so you can increase
bids, Quality Score (QS) optimization may be your only way to maintain a
high rank without breaking the bank.
While I’ve been a panelist representing Google in Quality Score
sessions at more conferences than I can remember, I’ve been meaning to
put together some of my insights on the topic for a broader audience.
So, here goes….
The Evolution Of Quality Score
Even if you don’t care much for a history lesson, it may help paint a
picture of why QS exists in the first place, and the evolution of
factors may give you some insight into what Google cares about.
When I started working at Google in 2002, Quality Score didn’t exist.
But what set Google apart from the other PPC ad systems at the time was
how they determined if ads were relevant enough to warrant an
impression. In addition to having a team of humans reviewing all ads,
the system was also monitoring the click-through rate (CTR) of every
keyword — if a keyword’s CTR fell below 0.5%, it would become disabled
for poor relevance. Google was using the wisdom of the crowds to let its
users determine which ads should show and which shouldn’t.
The problem with disabling keywords at an arbitrary CTR level was
that advertisers were unhappy to see some of their keywords disabled
forever (unless, of course, they knew of the workaround to resubmit the
same keyword with different capitalization). So, we started to evolve
the system. Instead of disabling keywords, we came up with new statuses
like “slowed,” “in trial” and “on hold.”
The idea was to give advertisers a way to fix low-relevance keywords
by giving them a small allowance to run ads that were considered poor
quality so that they might prove otherwise. We also gave the system more
flexibility so there wasn’t a hard cutoff at the 0.5% CTR level.
Ultimately, though, most advertisers still saw keywords they really
wanted to advertise on get disabled, and they remained displeased.
Google addressed this with the introduction of the minimum bid.
Rather than flat out disabling keywords, they asked advertisers to pay
more for keywords that had low relevance — the idea being that
eventually, it would make no sense for an advertiser to keep paying the
high cost-per-click (CPC), and they’d either optimize the relevance or
delete the keyword.
In today’s system, the minimum bid has been engulfed by the first
page bid, which also takes into account competition. It’s a little
harder to see the direct correlation between what you pay and the
quality score, but the connection’s definitely there.
Below is an example of where we see the correlation between the
average CPC and the QS in our Quality Score Tracker tool.
As the Quality Score starts to increase, the average CPC in this campaign starts to drop.
Quality Score’s Impact On Ad Rank
When Google launched AdWords Select and started to shift from
CPM-based pricing to CPC-based pricing, they couldn’t afford to lose all
the revenue from their CPM program (which was called AdWords at the
time). They were still a pretty small company, and Yahoo/Overture was a
formidable competitor. So, to ensure revenue was maximized, they ranked
ads in the CPC program according to a very simple rule:
Ad Rank = Max CPC * CTR
If you take a minute to look at this more closely, you’ll quickly see
that ad rank is, in fact, equal to CPM or dollars-per-impression. This
was the simple but brilliant insight that made AdWords so powerful —
advertisers only had to pay when they got clicks, users would see more
relevant ads because ads with high CTRs were more likely to appear high
in the results, and Google was making as much money as possible from
these ads.
The equation for ad rank is a whole lot more complicated these days
and now includes thresholds for appearing at the top of the page,
landing page factors, and more. But at the heart of it, the original
principle still applies: if Google can show more relevant ads, they will
get more clicks, have happier users and make more money. And, the key
component for achieving this is CTR.
The importance of CTR to Quality Score is a bit like the importance of
TF-IDF
to SEO. While there are hundreds of factors that go into ranking in
paid or organic search, these long-established principles are still some
of the most important ones. In the 80/20 rule, these are your 80
percent factors and the first ones you should pay attention to.
Factors Of QS
While I’ve explained that CTR is a main driver in QS, it’s useful to
understand how Google thinks about CTR. After all, there are many things
that influence the CTR you see in your account such as the device, the
network, or the position of your ad on the page. Thus, the average CTR
you see in your account is not the CTR Google uses to determine Quality
Score.
To make sure advertisers have a level playing field, they evaluate small slices of CTR.
For example, they look at different CTRs by device type so that your
performance on mobile won’t affect your performance on desktops. They
also have a different CTR they look at for the Display Network and
Google Search — a good thing, since CTR on Display is usually much
lower, and you wouldn’t want that to hurt your QS for search.
Where possible, they also favor looking at the CTR when the keyword
in your account matches the search query exactly (don’t confuse this
with the “exact match” keyword match type), and they normalize the CTR
based on the number of ads on the page and your ad’s position amongst
them.
Furthermore, Google has to make some guesses before they have a
statistically significant amount of CTR data for new accounts, new
keywords and new ads, and they do this by evaluating the CTR at
different levels as explained in the diagram below.
The various levels at which Google evaluates CTR to determine Quality Score.
As you can see, there are 3 levels of CTR evaluation: the account,
the keyword and the ad. These CTR elements are all combined into a
secret formula and out comes your keyword-level Quality Score and the
corresponding number between 1 and 10 that you can see in your account.
How Quality Score Is Set For New Keywords
When a keyword is new in an account, there is not a strong historical
element for how the keyword performs with its ad text (factor 3), so
the QS is mostly based on system-wide data for that keyword in all other
accounts. That gets combined with data for how this particular account
and its ads have performed historically. If these elements have good QS,
the new keyword is likely to also start off with a better QS.
To give an example, if you have 2 accounts, you should see a lower
starting min bid in the account with the better account-level QS. If you
have 2 domains, you will see a lower starting min bid when using the
domain that has a better QS.
After the system gets enough data about more specific things, like
how the keyword performs with the ad you wrote for it, it will rely much
more on this to determine the Quality Score. This is why it’s so
important to have great account structure and split up your ad groups in
a way that allows you to create great performing ad texts for each
grouping of tightly related keywords.
Other Relevance Factors
According to Hal Varian, Google’s Chief Economist, QS also
considers “relevance” in addition to CTR.
But what does that mean? The easiest way to think about this is once
again based on click-through rate — but, rather than using CTR to
generate the QS number between 1 and 10 that you see for each keyword in
your account, it’s used at the time a user does a search to determine
if there are any correlations between that user’s search and your ad
that could predict the CTR (Google’s Quality Score is a predictive
system that tries to predict CTR for each ad and each query). Some
examples:
- Did the user’s search include some additional words, and do those
correlate with your ad’s expected chance of getting clicked? E.g., if
you have a job website and want to advertise on the keyword [jobs], your
ad is probably not relevant when someone searches for “Steve Jobs.”
- Does the location of the user have any correlation to your predicted
CTR? E.g., if your business is in the US and the searcher is in
Belgium, perhaps it’s less likely your ad will get the click because the
users may prefer a business closer to them.
- Does the time or day of week influence your predicted CTR? E.g.,
Google may know that users are less likely to click on your ad on a
Tuesday.
These factors let Google assign you a real-time quality score which
they can use to better rank your ad for that particular query. There
could be many other “relevance factors,” but just know they’re all based
on the same principle of trying to predict the likelihood of your ad
getting a click based on something Google knows about that specific
query.
While the lack of transparency into the factors may be annoying, this
relevance component has helped advertisers by automatically giving them
more good clicks and fewer bad ones.
Landing Page Quality Score
The landing page is one of the newer factors used for QS. Landing
Page Quality (LPQ) started as a way to counteract bad sites that duped
users into clicking their ads and hence had a good CTR but a lousy user
experience. Now that LPQ can also improve your QS, it’s getting a lot
more attention from advertisers (probably more than it warrants).
Remember, the CTR of your ads is still the bigger QS factor and
probably the better thing for most advertisers to focus on optimizing.
Every now and then, I hear of advertisers who are spending a ton of time
creating one landing page per keyword so that the keyword will appear
on the page and score a better LPQ. That’s probably overkill — Google is
very good at understanding how words are related, so it’s unnecessary
to include every variation on the page.
My personal recommendation is to also keep a close eye on bounce
rates and time on site, two metrics you can see directly in AdWords when
you link it with Analytics. A high bounce rate or very short time on
site both provide a great way for you to find keywords that are not
relevant in the minds of users.
Optimizing The Right Elements Of Your Account
If you haven’t guessed by now, optimizing Quality Score is really all
about optimizing for CTR. The challenge is to optimize for the right
CTR. For example, because Google uses position normalization when
determining how your CTR impacts your QS, it could very well be that
your ad with a 15% CTR in the top position on Google is actually worse
than your 3% CTR ad in the last place on the right side of the page.
You should also look at the impression-weighted Quality Score to
determine which keywords and ad groups are most in need of an
optimization. I shared a script for
automating the calculation with AdWords Scripts.
