Reduce Pay Per Click Advertising Cost by Improving Quality Scores

Pay Per Click Advertising campaigns are expensive and we are for the most part resigned to it. However, there are ways to reduce your PPC costs without sacrificing ad positions or impressions. By improving your campaign’s quality score you can expect to see reduced keyword bid prices while actually seeing your ads place on higher positions. Here’s how it works.

Google and Bing use a rating called Quality Score (QS) which is assigned to different components of a Pay Per Click campaign, such as keywords, ads and ad groups. Actually, your entire campaign has a QS score assigned to it and it affects you in many ways. Luckily, it is a dynamic rating and can be easily improved by following a few simple steps.

Quality Score is rated from 1 to 10 (1 being worst), and it has a huge impact on your keyword bid prices as well as the actual placement of your ads on the Search Engine Results Pages (SERPs). As you probably know, higher ad placement translates into higher Click-Thru Rates which generally yield higher conversion rates. Increasing your ad placement without increasing your bid prices is the Holy Grail of Pay Per Click and the best way to attain it is by improving your Quality Score.

To improve your Quality Score you must first understand how it is calculated. Google is known to rate the following metrics in its QS formula:

  • Keyword relevance
  • Ad relevance
  • Landing page relevance
  • Historical CTR
  • Internal factors known only to Google


The Quality Score Formula

To determine where in the SERP your ad will show, Google uses a very simple yet effective formula:

Ad Rank = Keyword Bid X Quality Score

Here’s how the concept works: In order to show up on the top position you must have a great quality score. A high keyword bid alone will not get you the top position, it is a combination of the two factors that determine your ad’s ultimate position.

As a matter of fact, as long as your keyword bid is within a reasonable range, the real determinant of your ad position is actually the Quality Score. It is possible to be in the top position of a SERP and actually be paying LESS for a keyword, while your competitor below you could be paying substantially more.

The Google reward for quality is a higher ad placement while paying a lower keyword bid.

Let’s take a look at an example to see the QS formula in action:

Advertiser X (Quality Score = 9 X $4.00 (bid) = 36 (Ad Rank)

Advertiser Y (Quality Score = 5 X $7.00 (bid) = 35 (Ad Rank)

As you can see, advertiser Y is paying $3.00 more per bid (75%!) than advertiser X yet his ad is still in second place due to his lower quality score. This is a large chunk of extra PPC fees being paid due to a low quality score. You must also remember that the higher ad placement will yield a higher CTR (thereby perpetuating the higher QS) and quite possibly it will also yield a higher conversion rate.


How to Improve Quality Score

Improving the quality score of your ads, keywords and overall campaign is the easiest way to the top of the SERP while reducing your campaign costs substantially. So how do you improve QS?

  • Re-shuffle your keywords into smaller, more relevant Ad Groups.
  • Write new ads which are highly relevant to the keywords within the Ad Group.
  • Landing page content should be specific to only one Ad Group and again, be very relevant to the keywords within the Ad Group.
  • Your keyword should show up in the Ad Title, Ad Body, Ad Display URL, Page Title and of course within the landing page content.

High Quality Scores are one of the biggest investments you can make towards improving your PPC campaign results. Depending on the state of your campaign, the changes could be tweaks or could require major re-structuring.

Feel free to contact us and we’ll be happy to analyze your campaign and develop a plan to improve your quality scores. The results will easily pay for themselves.

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Analytics & AdWords certified growth engineer with over a decade experience in making businesses successful. I own and operate AXZM and often speak at top national industry conferences on the topics of strategy, design and marketing technology. Work with me or learn more about me here. Follow me @nawlready

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  1. Reply

    Very informative. Nice one Steve. I never knew those were the factors that went into the quality score of Google AdWords. Is that the same way Bing calculates their quality score?