How to Reduce Adwords Cost by Increasing Quality Score & New Research on the Relationship Between Click Through Rates on Quality Score & Ad Positions

Why is Quality Score Important?

Quality Score is one of the key metrics in AdWords and is used to measure the relevancy of your keyphrases every time there is a search.

Quality Score is involved in a number of important processes in your Google pay per click account.

1) Quality Score is used in determining whether a keyword is eligible to enter the ad auction when a user enters a search query. If the Quality Score is too low, then the ad will not be displayed.

2) It is also used when determining the position of your ad (Ad Rank)

3) Finally Quality Score is used to calculate your actual cost per click

Ironically, Quality Score is one of the most important elements in managing your AdWords account, yet it is actually hidden; so you have have to go to the “Columns” button on the keywords Tab to display the Quality Score for each keyphrase!

Contents of this article

In this article we explain the factors that influence Quality Score and strategies to improve your Quality Score, in order to improve your ROI. For example if you double your Quality Score you will halve the amount you have to pay to achieve the same position!

We also include some new research from over 50 pay per click accounts within our MCC (data for January 2011 to February 14th 2012). This is equivalent to over 65k keyphrases and 300k clicks. We present some data that shows the correlation between Quality Score and click through rate (CTR) and also the correlation between positions and click through rate and cost per click (CPC).

1) Understanding Quality Score

The relationship between Quality Score and the positions you achieve (Ad Rank) and the amount you pay

This is shown in the table below:

Quality Score Factors

There are a number of different factors which can affect your Quality Score. These are illustrated in the diagram below and include:

  • The quality of your landing page
  • The relevance of a keyword to the ads in its ad group
  • The relevance of a keyword and the matched ad to a search query
  • The historical CTR of a keyword and the matched ad
  • Your account history, which is determined by looking at CTR of all your ads across the entire account
  • The historical CTR of display URLs in your ads
  • Your account’s geographical performance in the area shown

Why improve your Quality Score?

Improving your Quality Score can reduce your cost per click or allow you to achieve higher positions at the same cost. Your cost per click also has a direct effect on your cost per acquisition (CPA), so by increasing your Quality Score and reducing your cost per click, you can also reduce your cost per acquisition.

2) Improving the Quality Score of your landing pages

The standard and relevance of your landing pages can play a significant part in the determination of your Quality Score. There are a number of recommendations that you should consider when choosing and constructing your landing pages. These include:

  • Ensuring the page contains unique, relevant and keyword rich content
  • The page should be easy to navigate and adhere to the 3 click rule, where any part of the website is accessible within 3 clicks
  • There should be no pop-ups and you should also avoid browser resizing
  • Page speed is also a factor and you should ensure it loads as quickly as possible

There are currently around 18 recommendations made by Google regarding landing page quality. The recent changes in the factors relating to landing page quality are similar to some of the factors in the Panda update; for example penalising pages with poor quality content, duplicate content or pages with too many ads.

Strategies to improve your landing page Quality Score
There are a number of ways you can improve your landing pages and implementing these changes should have a direct effect on your Quality Score and conversion rates.

  • Check the page speed of your website
  • Ensure you have basic pages such as Privacy Policy and Terms & Conditions
  • Avoid pages with no relevant text such as category pages with all images and no unique text
  • Create custom landing pages for specific campaigns or ad groups to increase relevancy
  • Test, monitor and improve

3) Improving your keyphrase and ad relevancy

Another aspect of Quality Score pertains to the relevance of your keyphrases and ad copy. If there is a good match between your keyphrase and the associated ad, it will be considered more relevant and is likely to have a higher Quality Score. In addition if the keyphrase appears in the title of the ad it will be highlighted in blue and is also more likely to be clicked on by the user.

The main way you can maximise your keyphrase and ad relevancy is to have a very granular account structure, for example by only having one keyphrase per ad group – so each ad group has ads that contain the associated keyphrase. This either means restructuring existing accounts or creating new accounts with the optimum structure.

In terms of structuring campaigns:

  • Each campaign or ad group should be focussed on one product or service
  • You should spend a minimum of 4 hours per campaign on keyphrase research in order to identify 500-5000 unique and relevant keyphrases (more for ecommerce sites and database sites)
  • You then create 500-5000 ad groups (per campaign) corresponding to your chosen keywords (this is best done in Excel and AdWords Editor)
  • The title of each ad should contain a corresponding keyphrase
  • Add negatives

Tips on restructuring your AdWords account to improve relevancy

When it comes to restructuring campaigns, you should use ‘See Search Terms’ to identify converting keywords and download these into Excel. De-duplicate and clean phrases, removing any irrelevant and single-word phrases. You should then create Ad Groups named after each contained keyphrase, which contain 3 match types of the keyphrase – [Exact], “Phrase” and Broad match.

Import these into your account using AdWords Editor and add your negatives and any relevant geo-targeting information. Once live, you should check the account and optimise within an hour, and continue to check the account at least 4 times a day for the first week (and then at least once a week).

Note: If the account has been running for more than 3 months and has more than half of the keyphrases which have a Quality Score of less than 5, or the account has an the average CTR is below 1%; then it may be best to set up a completely new account (as it will be difficult to correct an account with such a poor history).

4) Improving your click through rates

Click through rates represent a large proportion of the “Quality Score pie”, as this is indicative of how the user responds to the ad for keyphrase they search on.

The Quality Score is calculated separately for each network (Google, Search partners and Display), and also takes into account the match type of the keyphrase and the geo-targeting. However, many advertiser do not realise that the click through rate of the whole account influences the Quality Scores of all the keyphrases in the account. This means that if you can raise the click through rate of all keyphrases it will benefit all the other keyphrases.

Strategies to improve your click through rate
In order to improve CTR, you should implement some (or all, depending on their relevance) of the following points.

  • Use more specific phrases, especially those related to the buying cycle
  • Use long-tail keyphrases as these have higher CTRs and are more likely to convert
  • Use all 4 match types
  • Use negatives and periodically add more
  • Pause keyphrases with a CTR of less than 1%
  • Using ‘See Search Terms’, periodically add more specific keywords

You could also make positive changes to your ads, such as:

  • Use keyphrase and dynamic keyword insertion in the title
  • Test 2 ads with different calls for action
  • Pause ads with lowest CTR
  • If an ad is under-performing, test an alternative
  • Pause ad groups if you can’t manage to get the CTR above 1%.

5) Research to show the relationship between click through rates, Quality Scores, positions and cost per click

Proportion of keyphrases by Quality Score. Ccomparison of all keyphrases across our MCC (20,186 for the Search Network and 45,344 keyphrases in Google)

Quality Score vs Average CTR%. Comparison of keyphrases from the Search Network (20,186) vs Google (45,344)

Sanity Check – Quality Score vs Positions

Results of this study

1) The proportion of keyphrases with different Quality Scores
The most common quality score was 7, while the rarest was 8, with similar results for both the Search Network and Google.

2) Relationship between Quality Score and click through rates
The average click through rate for keyphrases with each Quality Score was similar for both Google and the Search partners.

Also, it’s clear that to achieve a Quality Score of 7, you must have an average click through rate of above 5%. This is quite a surprising result and would indicate that it is more important to optimise on click through rate than we had previously envisaged. It would be useful for other agencies or technology providers to repeat this result to determine whether this is the average across the industry or because these results contain data from a number of accounts where CTR optimisation has already been implemented.

3) Comparison of average results with poor and well performing accounts
We also compared individual accounts which had either low or high Quality Score. The average click through rate profile of a poor/good performing account are slightly lower/higher than the average, but they have a similar pattern. However the main difference between accounts which perform poorly and those which perform well is the proportion of keyphrases with each Quality Score (see below).

The proportion of keyphrases with different Quality Scores – poor performing accounts compared with all accounts

The proportion of keyphrases with different Quality Scores – high performing accounts compared with all accounts

Correlation between AdWords positions and click through rates for Google and Search Partners

The graphs below show the average click through rates for keyphrases for each position:

From the graphs above we can see that there is much lower CTR on Search Partner sites and that in Google, the first 5 positions are the only spots which get more than a 2% CTR.

These results are significantly different from previous research carried out by Accurcast cast in 2009. In this study the top position has an average CTR of 12.1% (7.9% previously) and all the top 5 positions have an average CTR of more than 2% (previously only the top 3 were above 2%).

What is the significance of the difference between this and the Accurcast study?

  • Were the previous results amalgamated across the 2 networks?
  • Has the tendency to click on paid ads changed due to Sitelinks, other ad extensions or increased inclusion of “Universal results” (which tend to push down the organic results)?
  • Is our sample size of 45k keyphrases too small or do these results represent good practice based on our CTR optimisation strategy?

Correlation between ad position, click through rates and cost per click

The graph below shows the correlation between position of keyphrases in Google and the corresponding click through rate and cost per click. Note: the lower cost per click for position 1 is likely to be due to the effect of brand phrases.

These results shows that although you will achieve a higher click through rate and more clicks by bidding for the top 3 positions; this may mean that the cost per click is twice the amount you have to pay to be a position 5-7. If this means that the results cost per acquisition is too high then bidding high may be prohibitive.

We therefore recommend that it is worth considering aiming for a lower position to make your budget go further. We typically aim for positions 4-7 because you get the compromise of a reasonable click through rate while avoiding bidding wars for the top 3 positions. If you raise your average click through rate by pausing poor phrases and successful ad optimisation, you should achieve a click through rate above the expected rate for your position; which will result in an increase in your Quality Score (“normalisation”).

6) Final Conclusions

  • If your landing page is bad, it will affect all keyphrases across the account
  • Invest time and resources in the account set-up to maximise relevancy and minimise problems later
  • Optimise immediately for click through rates, you want to achieve an average click through rate of greater than 5% to achieve a Quality Score of 7
  • If an ad or keyphrase has a click through rate of less than 1%, pause it
  • Optimise constantly – test, learn, adapt
  • Your Quality Score will only improve if your click through rate is above the average amount for your position (Quality Score normalisation)
  • Conversion rates and CPA are nearly always more important than positions and CPCs, don’t forget about these!

Research carried out by Ann Stanley and initially presented at SES London in February 2012.
If you would like to be involved in further research by pooling your results with ours; then please contact Ann at [email protected]


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