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Google Explains Quality Scores

Biggest Bid Doesn

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It’s kind of nifty how forthcoming Google has been with the transparency lately. For the longest time, trying to get anything out of them was like trying to squeeze a nickel out of Ed McMahon. The latest explanations of how things work is a blog post describing how quality scores work and why the highest bidder doesn’t always get highest placement in the sponsored results.

Hal Varian, Google’s Chief Economist, at the official Google Blog uses a simple analogy of two sellers with different offerings who might use the same keywords: a guy who sells actual jets, and a guy who sells models of jets. The guy who sells real jets bids a lot more per click than the guy who sells models because leads are obviously worth a lot more to him.

However, the jet-seller’s links don’t get clicked as often as the model-seller’s, which puts Google in a conundrum that’s solved with the quality score. Google multiplies the maximum cost per click of an ad by the quality score, which is determined by historical click-through rates, quality of landing page, keyword relevance, ad relevance, and performance in a geographic area, among other factors, to determine placement.

Thus, the lower bid could achieve higher placement because it’s more likely to be clicked, which, in theory, accomplishes three things: makes Google more money, provides a relevant lead to the advertiser, and provides a relevant direction for the searcher.

“The quality score gives search engines a way of aligning the incentives of the buyers, the sellers, and the viewers of ads,” writes Varian. “The search engine wants to sell ad impressions, but advertisers want to pay for clicks. The solution is for advertisers to bid on a cost-per-click basis, while the search engine estimates the total value of the ad over time: bid per click times the expected number of clicks.”

 
 

Google Explains Quality Scores


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  • http://www.marketingminefield.co.uk/articles/10-websites-local-marketing.html Websites For Local Marketing

    It’s things like the quality score which makes Google by far and away the best search engine. I don’t believe Yahoo would ever have introduced the quality score had it been in Google’s position as it may well lead to lower revenues in the short term.

  • http://ezinearticles.com/?expert=Mike_Kay MikeKay

    So what’s the news? What are they explaining after all? Nothing new..same old quaility page, quality ad bla bla bla

    maybe the can explain me how I was paying 1$ when I was the only bidder and the minimum bid was 10-20 cents…that would be nice to know!

    I was bidding against who?

  • http://www.jaankanellis.com Search Marketing Blog

    Seriously this is not news.  It has been this way since QS was introduced.

  • http://www.potpiegirl.com PotPieGirl

    Goodness, Jason… tough crowd you’ve got here  =)

     

    It’s "news" because many people still don’t get it.  That is most likely why Google took the time to explain it (again)…and Jason did a write up on Google’s most recent explanation.

    Don’t shoot the messenger!  haha!

    I read your stuff everyday, Jason… keep up the good work!

     

    Jennifer

    ~PotPieGirl

     

    • http://www.dsipreorder.com DSi_preorder

      The fact that it is good news to many people is a good thing if those people are your bid competitors!

  • http://WebHostingPad-Coupon-Code.com WebHostingPad Coupon Code

    I’m glad the quality of a site is part of the formula.  Just like a person pounding a nail in the wall to hang a picture isn’t considered a carpenter, Google wouldn’t be what it is today if it let every website through the flood gate on even terms.  Even my own sites are better because I’ve been forced to play by G’s quality rules.   When I use G, I want to find relevant content and they make great strides to see that I do.

  • http://www.nintendodsiconsoles.org.uk/buy-dsi-console/pre-order-dsi-console/ Pre Order DSi

    exactly. This ‘news’ has been known for over a yr now.

  • http://www.dsi-prices.co.uk/ DSi

    Isn’t this the point of QS??

    • http://www.wii-consoles.co.uk/nintendo-dsi/nintendo-dsi-in-stock.asp DSi

      Yes, that is the point of the quality score ;-)

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