Is Quality Score a gimmick by Google to make money?

Somewhere in the mid of 2005 as a revolution towards stressing on the fact of relevancy, Google came up with the concept of Quality Score. As per Google below are some of the factors that influence QS:

• Historical clickthrough rate (CTR) of the keyword.
• Your account history, which is measured by the CTR of all the ads and keywords in your account.
• Relevance of the keyword to the ads in its ad group.
• Relevance of the keyword to ad and to the search query.
• Your account's performance in the geographical region where the ad will be shown.
• Other relevance factors.

Since then Google has added lots of factors that would influence Quality Score, such as the inclusion of landing page quality and landing page load time and so on not to forget ‘other relevance factors’. Above all one question that hunts all SEM professionals is how is Quality Score Calculated? What are those ‘other relevancy factors’?

To all readers I would like to share the result of a test conducted across multiple accounts regarding QS. For a test period of 15 days bids were reduced drastically for all keywords with low QS (1 to 4), leading to which keywords that were consuming almost 60% of total cost of the account dropped to just 18% of the total cost contribution impression and clicks from keywords with low QS dropped by almost 80%. CTR for all these keywords went from bad to worst during this period. (Point to note: apart from bid changes no other changes such as ‘Ad Copy changes’, ‘Landing Page changes’ were done to the account). Strangely by the end of the test period QS of almost 55% of keywords with low QS (1 to 4) in the account had gone up to (6 to 7). This sudden change in Quality Score trigger’s certain question in my mind.

• What made Google to suddenly change the keywords QS to that high?
• Did Google suddenly realize that Keywords and Ads were very relevant in that ad group and it has assigned low QS and raised the QS?
• Did the past 15 days CTR (worst ever in the history of that account) match to the industry standards and hence raised the Quality Score? Finally important one
• Quality Score for these keywords were increased just because Google stopped making money on these keywords? If yes then the whole concept of Quality Score from Google is just a gimmick to make more money?

If anyone has an answer to these questions, your comments are welcomed!

Going Back to Basics - Google AdWords

Today i have tried to answer some of the frequently asked questions in Google AdWords.

What is Ad ‘Rank’?
Ad rank is a score that your keyword receives when the quality score is multiplied by the max CPC. Formula: Ad Rank = Max CPC Bid x Quality Score

• Advertiser A. Max CPC of $1.55 with a Quality score of 7 = assigned rank is 10.9 = position 1
• Advertiser B. Max CPC of $1.65 with a QS score of 4 = assigned rank of 6.6 = position 2
• Advertiser C. Max CPC of $1.30 with a QS score of 5 = assigned rank of 6.5 = position 3

What is the difference between ad rank and ad position?
Position is the actual position of your ads on the results pages. Rank is the score a keyword receives based on it’s quality score and Max CPC and this Rank is what determines your position and what you pay per click.

How do I raise my Ad Rank?
Ad rank is determined by Quality Score X Max CPC, so if you raise one of them your ad rank will improve. But just increasing Max CPC might not directly increase your ad position, as keywords should also qualify/exceed certain quality threshold set by Google. (Hence QS has the upper hand among them)

How is Actual CPC calculated?
Actual CPC is calculated by dividing Ad Rank to beat (Ad Rank of the ad showing beneath you) by Quality Score + $0.01. Formula: Actual CPC = (Ad Rank to beat ÷ Quality Score) + $0.01

• Take B’s rank of 6.6 and divide it by A’s QS of 7 – 6.6 / 7 = 0.94 cents. 0.94 is what Advertiser A has to pay + 1 cents added to place it above B’s position for a total of .95 cents.
• Take C’s rank of 6.5 and divide it by B’s QS of 4 – 6.5 / 4 = 1.62. 1.62 is what Advertiser B has to pay + 1 cents to place it above C’s position for a total of 1.63 cents
• This process repeats until the end of the auction where the last bidder pays the minimum bid required to be active in the action.

What does ‘below first page bid estimate’ mean?
Below first page bid estimate indicates that you need to increase your bid to be placed on the first page of search results. Reasons for this could be quality score of that keyword is too low or you may be in a competitive market and your bid is not meeting the minimum bid requirement to qualify for first page.

What does ‘Rarely shown due to quality score’ mean?
This message indicates that you have a problem with your Keyword Quality, Landing Page Quality Score or possibly both. Your quality score needs to be addressed immediately.

What does ‘Low Search Volume’ mean?
“Low search volume" keywords are keywords associated with very little search traffic on Google properties. Keyword can have low search volume for a various reasons, including a lack of relevance to users‘, keyword obscurity, specificity or a significant misspelling of the intended keyword.

What is Bid Optimization/Management?
Bid management is the process of optimizing paid search / sponsored search campaign by modifying the bids to get the desired rank by specifying the maximum amount you are willing to pay per click for a keyword in order to maximize return on Investment.

How is Bid Optimized?
At present most of the PPC campaigns are optimized by manual optimization or by using bid optimization tools.

Manual Optimization enables dynamic bid changes at any given point based on the performance metrics and client goals. It is more dynamic then Bid Management tools because click trends are not uniform throughout the month/day so based on current situation and real time data analysis instant action can be taken in order to maximize ROI

Bid Optimization Tools enables maximize efficiency of spend in order to reach client goals. Bid Management Tools make Keyword-level bid recommendations based on historical data for each keyword, using sophisticated statistical algorithms within parameters / strategies set for each set of group or keywords. Most of the tools available in the market work with the concept of

• Max Bid
• Min Bid
• Target ROI %

Google Buys AdMob

Google has closed the $750 million deal on its acquisition of AdMob. Google plans to bring two teams together to improve Google’s mobile strategy. According to the blog, mobile advertising is becoming a much larger part of our clients’ and partners’ strategies and with this acquisition, it’s now a central part of our own business.” The deal is being seen as a push from Google to incorporate more search into mobile. On this note, Google writes, “As smart phones have proliferated, we’ve seen dramatic increases in mobile search volume. Over the past two years, Google’s mobile search volumes have grown more than fivefold, at an accelerated pace,