Advertising: How Your Google Adwords Quality Score Can Reduce The Amount You Pay Per Click

Google Adwords is an auction based Pay Per Click (PPC) advertising system where you

as a PPC advertiser set the maximum amount you are happy to pay for each click you receive from your advertisement placed with Google.

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As an Adwords advertiser you compete in a real-time auction every time a keyword triggers your ad. Adwords is a 'Vickery' type auction. In a Vickery auction once a winner has been decided, the actual price paid is not the maximum amount bid, it is one penny more than the bid of the second highest bidder. Google Adwords adds a twist to this, as winning bidders are also determined by Ad Rank not by maximum bid.

An understanding of the way that Google Adwords ranks PPC bidders to determine who has won each of the real-time auctions is essential to establishing a consistent and profitable strategy when taking part in the Google Adwords PPC Programme.

The Google Adwords Quality Score

The Google Adwords system for determining who wins the PPC auction is based upon the belief that high quality ad creatives benefit all parties involved. When the ads that Google displays match the requirments of searchers the assertion is that this benefits advertisers, searchers, publishers and Google alike. They name this 'relevancy'.

Since the winning bidder gets the highest position and the highest position gets the most clicks, the goal for you as a Google advertiser is to get the highest position for your advert creative at the lowest possible cost per click (CPC).

Every time a search is prompted and an auction has taken place, Google ranks the triggered ads by 'Ad Rank'. The position of each ad is based upon its 'Ad Rank'

Ad Rank = 'Maximum Cost Per Click' x 'Quality Score'

Since the 'Ad Rank' is not just the maximum amount that an advertiser has bid the highest bidder does not always win. The winning bid is based upon an additional set of elements, which together make up the Google Quality Score.

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The Quality Score is the basis upon which Google assesses and measures the relevancy of your ad to users and has a major effect in deciding how much you actually pay per click. This means that to compete efficiently an Adwords advertiser must be aware of what they have to do to achieve a high Google quality score.

Exactly how Google calculates the Quality Score is unknown to us and is a closely guarded secret.

Google do tell us however that Quality Score is determined by a keyword's clickthrough rate (CTR), the relevance of text in the ad, the historical performance of that keyword and other relevancy factors including the landing page of the target url.

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Advertising: How Your Google Adwords Quality Score Can Reduce The Amount You Pay Per Click

By: Martin Richardson

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