Search Engine Marketing (SEM) & Search Engine Optimization (SEO)

Each time your ad is eligible to appear on Google’s Search Network, an auction takes place among your ads and all the other eligible ads. Your bid is one of the factors that determines whether your ad shows, and in what position.  When you use maximum cost-per-click (CPC) bidding, you pay only when someone clicks on your ad. Raising your CPC bid can improve your ad’s position, and lowering your bid can decrease your ad’s position. On Google’s Search Network, ads are ranked on search pages based on a combination of the matched keyword’s CPC bid and Quality Score.

One of the Google AdWords’ most important concepts is Quality Score. How does Quality Score work? Why should you care so much about Quality Score?

Quality Score determines if a keyword is eligible to enter the auction. If your ad is eligible, Quality Score affects its Ad Rank which determine where your ad can appear in search engine results page. Quality Score is determined by the keyword’s clickthrough rate (CTR) on Google, relevance of ad text, historical keyword performance, landing page, and other relevancy factors. Having relevant keywords and ad text, a high CPC bid, and a strong CTR will result in a higher position for your ad.

Ad Rank (position) = Keyword Bid * Quality Score

• For search pages, Ad Rank is calculated by multiplying the matched keyword’s CPC bid by its Quality Score.
• For content pages, Ad Rank is calculated by multiplying the ad group’s content bid by its Quality Score

The higher the Quality Score:

• The lower your costs.
• The better your ad position.

Quality Score is dynamic – calculated everytime a keyword has the potential to trigger your ad.

Important factors used to calculate Quality Score:

1. Historical Click-Through Rate (CTR)
2. Your Account History (including performance and geographic region)
3. Relevance of keyword to your ad text
4. Quality of your landing page

Your bid helps determine your Ad Rank. Increasing your maximum CPC can improve the position of your ad. You always pay the lowest amount possible for the highest position you can get given your Quality Score and CPC bid.

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