AdWords Tips

Revisiting the Economics of Google Quality Score: Why QS Is Up to 200% More Valuable in 2013

By Larry Kim March 26, 2013 Posted In: AdWords Tips Comments: 10

Economics of Google AdWords Quality ScoreJust over 4 years ago, Craig Danuloff at Click Equations wrote an article called “The Economics of Quality Score” that provided a simple model to determine the value of Google Quality Score in your AdWords account.

We all know the value of Google's Quality Score in a high-level sense – Quality Score plays an important role in determining your Ad Rank, which is how Google determines the position in which your ad appears, which in turn determines the amount of exposure and clicks your ads will receive.

We also know that Quality Score plays a very important role in determining how much you’re charged per click. A now famous video by Hal Varian, Google’s Chief Economist, helped clarify this point – that your cost per click is calculated using the formula: Ad Rank of the ad below yours / your Quality Score.

Using this information, along with some basic arithmetic, Craig published two tables that illustrated the value of Google Quality Score at that time, as shown here:

quality score google adwords

The tables illustrate:

  1. The average savings and “penalties” experienced with high Quality Scores (8, 9, or 10) or low Quality Scores (6 or below), with 7 taken as a neutral average.
  2. The economic cost or benefit of having your Quality Score move up or down by 1 point.

At this point, it’s important to note that the true Quality Score that Google uses to calculate your CPC isn’t really a whole number between 1 and 10. The Quality Score that is visible to you in your account is a whole number between 1 and 10. Quality Score for calculating CPC is a real number and the scale is non-linear. Furthermore there are other factors involved in calculating CPC’s that aren’t disclosed by Google.

So while the actual numbers in the chart were off, the overall point hopefully remains true – that the positive and negative effects of Quality Score and its impact on CPC are directionally correct, and so these tables serve as a powerful illustration of the value of Quality Score.

Click Here to Get Your Quality Score Report Card

What’s the Value of Google Quality Score in 2013?

Much more than it was worth four years ago.

While the overall positive and negative effects of having a good or bad Quality Score remain true today, Quality Score has changed significantly in the last 4 years.

Most significantly, a Quality Score of 7 was set to be the neutral value at the time because QS=7 was the average Quality Score for most keywords back then. As Craig put it:

Note that we set QS=7 as the neutral value because using ClickEquations to review a wide range of accounts we’ve seen that QS=7 appears to be the mean quality score across a very large and diverse set of keywords.

Since then Quality Scores of 7 have become much scarcer and the average Quality Score has fallen.

Here’s a quick snapshot of what the Impression Weighted Average Quality Score looks like in 2013. Note that I’m weighting Keyword Quality Scores by impressions – because different keywords have different search volumes.

quality score distribution

I compiled this data by doing a manual analysis of several hundred new clients that WordStream signed up in the first two months of 2013.

Based on this manual analysis, I estimate that today’s impression weighted average Quality Score in 2013 is just slightly over 5 (out of a possible 10).

A Quality Score of 5 Is the New 7

Keywords, on an impression-weighted basis, now have an average Google Quality Score of 5. Therefore, accounts (or campaigns or ad groups) with average volume-weighted keyword Quality Scores better than 5 can be considered better than average, and are thereby benefiting relative to most advertisers. Accounts with average Quality Scores lower than 5 are below average, and those scores are detrimental to your account.

So re-running the calculations, but this time using a Quality Score of 5 as the new mean value for Quality Score (the “base value”), the Economics of Quality Score in 2013 now looks more like this:

Google Quality Score Impact

 

The #1 take-away here is that as average Quality Score has drifted lower, the “value” of having an above-average Quality Score has increased tremendously.

Also note that on a percentage change basis, the Quality Score “discounts” for above-average QS keywords have increased from 66% to 200% compared to their 2009 values, as illustrated in the preceding table.

For this and other reasons, I’ve often argued that Quality Score is the most important success metric in achieving AdWords success – and this is more true now than ever before.

Note that the marginal savings or cost increases for a 1-point increase or decrease in Quality Score remain unchanged (by definition), but are included in the table for the sake of completeness.

What’s My Average Google Quality Score? How to Check Your Impression-Weighted Quality Score

Now that I’ve described the value of Quality Score, and how it’s more important now than ever, you might be asking yourself – what’s my Quality Score? There’s two ways to figure it out – an easy way and a hard way. Let’s start with the hard way.

Finding Your Average AdWords Quality Score the Hard Way

To manually figure out your average Quality Score, follow these steps:

  • Log into AdWords.
  • For each Search Campaign, navigate to the Keywords Tab, click on the “columns” button, then add the “Quality Score” attribute, as illustrated below.
  • Export the data into a spreadsheet and calculate your impression weighted average Quality Score by multiplying each keyword Quality Score by the number of impressions accrued to that keyword. Add up this product for all keywords, and then divide by the total number of impressions accrued by those keywords. That’s your impression-weighted quality score for your Account (or campaign, ad group, etc.).

google quality score checker

Finding your Google Quality Score using the AdWords Interface

Finding Your AdWords Quality Score the Easy Way

Another way to quickly visualize your impression-weighted Google Quality Score distribution is to just grade your account using the AdWords Performance Grader. This free tool will do an instant audit of your PPC account across 8 different key performance metrics, including impression-weighted Quality Score.

The report will calculate and display your average Quality Score and plot a distribution of the number of impressions happening at each visible Quality Score for the last 90 days, and compare that to a “Recommended Curve” for your business. Here’s an example of what the Quality Score section of the report looks like.

Check Google Quality Score

Now Is the Time to Improve Your Google Quality Score

Knowing that your Quality Scores may be saving you up to 50%, or costing you up to 400%, should provide strong motivation for everyone to both understand and work to improve your Quality Scores.

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AdWords Performance Grader




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Comments

Tuesday March 26, 2013

Robert J Moreau (not verified) Said:

My how things have changed over the years. Things have definitely improved for those who conform to the right way of going about acquiring your traffic. I've seen QS come up short a couple of times recently though for sure.

Wednesday April 03, 2013

Jeremy Brown (not verified) Said:

Hi Larry,

What are the mean and median monthly spends per advertiser for the data set you are looking at?

For many of our clients, there was a Quality Score realignment in November of 2012.  Many non-brand keywords that were previously a 7 were "upgraded" to a 10.  For some accounts, they previously had very few if any non-brand keywords with a QS of 10.  After this realignment, more than 50% of their non-brand keywords have a QS of 10.

Several other PPC folks noticed this change, but few complained about having their Quality Scores "improved". Marin Roettgerding documented this realignment in a blog post:

http://www.ppc-epiphany.com/2012/11/27/adwords-keyword-quality-score-shakeup/

 

I never heard an explanation for this realignment, but it wouldn't surprise me that Google wanted to shift focus away from keywords with a QS of 7.  So they bumped many of those up to 10 hoping that advertisers would then focus on their lower QS keywords.

It would be nice to get some input from Google if that realignment only reflected visibile Quality Scores.  Many of the PPC folks who remarked on the realignment did not see a decrease in CPCs or changes in other metrics.

Thursday April 04, 2013

Larry Kim Said:

i have not seen this but can investigate as i have snapshots of many accounts over time.

Did the CTR's change much on the impacted keywords?

 

 

Tuesday June 11, 2013

Dragan Pozder (not verified) Said:

I have also witnessed this "alignment" in Nov 2012 in few campaigns. Huge increase in QS, mostly from 7 to 10, with no impact on CPC and no CTR change, so I was surprised to read in this post that "5 is the new 7”.

Thursday April 04, 2013

Jeremy Brown (not verified) Said:

I didn't see CTR or any other obvious changes.  Just lots of previous 7's that became 10's.

Friday April 05, 2013

Anand Saini (not verified) Said:

Your article seems to be bit confusing to me. The shown results are different than what we found in real.

Tuesday September 17, 2013

Jordan Caron (not verified) Said:

I was looking at my scores that had 5 and thought that it was pretty bad. But you have explained that 5 is the new 7. I honestly don't see how I can target more direct keywords to get a higher score.

Tuesday October 15, 2013

cameron (not verified) Said:

I manage a large ppc campaign in google adwords. I notice after achieivng a average quality score of 9, I had a large increase of conversions.

Saturday December 21, 2013

Rheo (not verified) Said:

I just saw a bunch of QS 7's just jump up after the update. Anyone else?

Tuesday September 09, 2014

Karl (not verified) Said:

Hi Larry, 

I was wondering whether there is a place where you could see an account level Quality Score?

And then whether you can see how that has varied over time?

Basically I want to check that the work I have been doing, at the very least, has seen the account Quality Score average rise from 5.2 in March 2013 to 6.3 in September 2014 for example. 

That would very quickly give me an indication that I am heading in the right direction. 

 

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