ctrpie.JPGLast Wednesday our agency’s Google rep sent over a video put together by Google’s Chief Economist, Hal Varian that very clearly explains Google’s Ad Auction and Quality Score. The 9 minute video is definitely worth viewing at least once to get a better understanding of two large parts of the AdWords system that were, until now, pretty hard to quantify.

In this two part blog series, I will explain what Quality Score actually is, how the ad auction works, and how Quality Score determines your ads’ positioning and costs per click using the video as my guide. Today’s article will cover the ever elusive concept of what Google’s Quality Score really is.

Google’s reasoning for creating Quality Score is to make sure that the best interests of all parties included in the search experience (the advertiser, the user, and Google themselves) are taken into account when a search is performed on Google.com. Below, I’ve explained the motivation to appeal to each party’s interest:

Until recently, Google’s “Quality Score” was an abstract concept with little to no definition. Advertisers wanted to get the highest Quality Score possible, but didn’t really know what they were striving for.

Towards the end of 2008 and even more in Q1 of this year, Google has been slowly revealing what is included in Quality Score. The video explains that Quality Score consists of clickthrough rate (CTR), relevancy, and landing page quality. The reasons Google places emphasis on each of those components is outlined below:

It is very helpful for us to now see exactly what we should be working on in our clients’ AdWords accounts to improve their Quality Score. We’re also able to focus our time on areas where we feel we can be the most productive.

The high emphasis placed on CTR shows me that testing ad text and ad headlines in an effort to improve the relevancy to keywords and the user’s query is of utmost importance. While focusing on improving the relevance of your keywords to your ads and your ads to high quality landing pages will certainly pay off, it is now clear what Google wants from us the most.

In tomorrow’s article, I will use the video to explain how Google determines your Ad Rank as well as each advertiser’s click cost. We’ll also delve into how improving your Quality Score can help achieve higher positions for less cost.

Stay tuned…

Click here to read Part 2, AdRank and CPC