Your Quality Score has a big impact on both your ad-position and your CPC. This in return will have a big impact on your ROI at the end of the day.
How does Quality Score affect ad position and CPC?
How Quality Score affects Ad-Position
While Google hasn’t revealed their exact formula of what makes up Quality Score, few would contest that there’s a direct correlation between ad position and Quality Score.
In fact, a good shorthand formula to go by is:
Ad Position = Max CPC x Quality Score
Of course, reality is a little more complicated than that; but in essence that’s how it works.
If you have a good Quality Score, your ad will rank higher for the same bid. If you have a lower Quality Score, even if you’re bidding a lot of money you might not get a good ad position.
How Often Your Ad Shows
It’s important to note that in addition to ranking, your Quality Score will also influence how often your ads show up.
Have you ever noticed that sometimes when you search for your keywords, your ads show up, but at other times they’re nowhere to be seen?
That’s because Google rotates ads in and out. They rotate your ads out so that other ads can get a shot at getting clicks and so Google can determine which ads are actually generating them the most revenue for their impressions.
If you have a low-Quality Score, you’ll be rotated in less often and get fewer impressions. In fact, if you get a low enough Quality Score your ads just won’t show up at all.
How Quality Score Affects CPCs
The lower your Quality Score, the more you’ll have to pay for clicks. The difference can be astronomical.
Someone with a Quality Score of 10 might pay 15 cents for a click that someone with a Quality Score of 7 might have to pay 25 cents for. Someone with a Quality Score of 3 or 4 might have to pay as much as $0.50 to $1 to even get any traffic.
It’s easy to underestimate the effect that Quality Score can have on your volume and ROI. But the difference between 15 cents and 30 cents is a 100% increase in ROI. That’s not even counting the increase in volume.
How to Apply This Information
The moral of the story is to pay close attention to your Quality Score. Your Quality Score is more important than your bid, your CTR, your landing page, etc. It affects your whole campaign in many ways.
If you ever come upon a junction where you can choose between profits now and Quality Score later, it almost always pays more to choose Quality Score.
That might mean putting more time into making your landing pages high quality. It might mean cutting, converting but low CTR ads. In other words, it means at times putting Google’s earnings and customer satisfaction above your own short-term profits. Make Google happy and in the long run you’ll make more money.