On the surface it would seem that AdWords campaign costs are entirely driven by the bids you place for the given keywords you are using. However, there is another factor that determines your actual click cost, and that factor is Quality Score. Google utilizes an algorithm that multiplies the Quality Score of the keyword you are bidding on by the bid amount and generates a result, called an Ad Rank. The Ad Rank is what determines whether your ad will show first, second or last in Search Engine Search Results.

What's interesting is that the top advertiser rarely pays the highest amount, it's the advertiser with the combination of highest relevance (Quality Score) and bid amount that takes first place. Indeed, it is almost impossible to wind up in first place if your ad is completely irrelevant.

As such Google issues a Quality Score to each keyword in your AdWords campaign. The score runs from 1 to 10 (10 being highest) and takes into account:

  • Historical CTR data
  • Ad text / keyword relevance
  • Landing page relevance

 The Ad Rank formula, according to Google is:
Quality Score(QS) X Bid = Ad Rank

Let's take a look at a simplified example to see how it all ties together:

Two advertisers aim for the number one position with two different bids:

Advertiser X (QS) 8 X (bid) $4.00 = (Ad Rank) 32
Advertiser Y (QS) 5 X (bid) $6.00 = (Ad Rank) 30

As can be seen, Advertiser Y who bid 50% higher than Advertiser X still wound up in the second position. Why? The Quality Score was substantially higher for Advertiser X, thereby granting him the top position, which will lead to higher CTRs and probably more conversions. The best part is that Advertiser X paid much less for the first spot than Advertiser Y did for the second spot.

Improving Your Quality Score

Clearly, any effort made to improve Quality Scores in your AdWords campaign pays back in dividends. But how do you improve Quality Scores? Here are some suggestions:

  • Make sure your ads are relevant to the keyword and the landing page.
  • Use AdGroups to organize similar relevant keywords (and ads) together.
  • Your landing page should be an extension of your ad, with very relevant, unique content.
  • Your keyword should show up in your ad title, ad text and of course in your landing page.
  • Remove non-relevant keywords from your campaign or AdGroup.
  • Implement negative keywords.
There you have it. By improving the overall visitor experience, from keyword, to ad to landing page you can actually improve your Quality Scores and save some bucks at the end of the month, while your conversions actually increase.

Feel free to contact us and we'll be happy to discuss this and many other ways to reduce your AdWords campaign  costs.

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One of the mainstays of online marketing is found in Google AdWords, the leader for paid search engine marketing.  It looks like advertisers on this tool will soon be able to take advantage of an interesting item – dynamic remarketing.

According to Jennifer Slegg, this program is currently in pilot and only available to those in the education and travel sectors.  However, it is planned to expand later in the year, speculatively reaching all paid advertisers in due time.

Slegg demonstrates what the ads look like in this new form.  They serve as reminders for visitors who have previously seen a product on a company’s website, showing these products in an advertisement on other websites.  Slegg reports that Sierra Trading Post had double the click-through rate and five times higher conversion rate with this than traditional remarketing campaigns.

In the tool, Google automatically adjusts to recommend products, as well as those that are related and generally popular.  A real-time bidding algorithm is also mentioned by Slegg.

Overall, this tool could be a valuable option for businesses as it becomes available.  It should be a strong way to reach visitors that showed interest in specific products – potentially bringing them back to the original company’s website for a purchase.

Are you interested in taking advantage of Google AdWords and other online marketing tools?  Speak to one of our specialised team members and we can show you  how to increase your online marketing efforts! 

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