How Does Google's "Quality Score" affect my PPC Performance?

Posted by Chuck Bankoff On November - 9 - 2010

So you think that if you bid more for a certain keyword than your competitor you will show up higher in the paid search results? Makes sense, but It’s not that simple.

Let’s start off with the premise that the lower your quality score, the more likely you are to pay for a click and the lower your relative positioning on the search results page.

The Google Quality Score is determined by a variety of different factors but I want to focus on only one for now: Click-through-rate (CTR). That is the percentage of the times that your ad has the potential for being seen on the search results, verses the actual times it is clicked on.

Note that I said the “Potential”. That means if you bid too low and are on page 3 of the search results, technically your ad has the “potential” of being viewed… but it is unlikely it will ever be seen or clicked on. Your quality score is updated often. In fact every time your key word has the potential for being viewed that fact is recorded and your score is ultimately recalculated.

Why does Google do this? They tell us it is their way to help serve up the most relevant results. Since CTR is only one factor in the Quality Score that affects user experience, I’m certain this is valid. However I believe there is also an economic component to this.

Let’s do the math:

Suppose your competitor is paying $2.00 per click for a certain keyword, and on average they get about 100 clicks each day. Google would make $200 per day.

Suppose you are also willing to pay $2.00 per click for that same keyword, but you only average 50 clicks per day. You only made Google $100, whereas your competitor makes them $200. Google likes them better…

Suppose that you are willing to pay more per click to show up above them in the search results, but you still only get 50 clicks per day. How much more do you have to raise your bid before the economics work out in Google’s favor?

What are some of the factors that affect CTR?

  1. Positioning on the search results: Generally the higher you show up in the search results, the more clicks you will get. That does NOT necessarily mean that you are getting a better ROI.
  2. Relevance of the ad to the keyword being searched on: If you are using an “all purpose” ad for a bunch of seemingly unrelated keywords, less people will click on your ad because it doesn’t appear to meet their search requirements.
  3. Quality of the ad: The more intriguing the ad, the better chance you will spark the searcher’s interest and earn a visit.
  4. Brand recognition: If your brand is more recognizable, you stand a better chance of getting that click.

Remember, every time that you search on your keyword to see where you rank and you don’t click on your own ad, your quality score just suffered a little bit. I’m not suggesting that you actually click on the ad yourself (you don’t get a discount from Google because it’s your ad). I am suggesting that you trust your reporting metrics, or enlist a PPC management professional to monitor performance and make adjustments accordingly.

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