How AdWords Quality Score and Ad Rank are Calculated

There are a few fundamentally important calculations on the business landscape, such as break-even, cost-benefit, ROI, and as far as advertisers that play the Pay-Per-Click (PPC) game are concerned: how AdWords quality score and ad rank are calculated.

The good news is that figuring this out doesn’t require one of those terrifying calculators that have entire user manuals devoted to their operation, and there’s no need for a compass, slide rule or protractor. Even better, you don’t have to “solve for X”, and nobody is going to ask you to figure out when trains leaving Chicago and New York pass each other.

First though, before we look at how AdWords quality score and ad rank are calculated, let’s take a step back and clarify these terms for those of you who aren’t familiar with them, or would appreciate a refresher.

What is AdWords Quality Score?

AdWords quality score – which is reported on a scale of 1 to 10 — is Google’s ranking of how relevant (i.e. searcher-centric) it thinks an ad is. Google is pretty secretive when it comes to precisely how quality score is calculated. Generally however, it’s understood as an aggregated estimate of an ad’s keywords, relevance, landing page experience, and overall performance in ad auctions (i.e. clickthrough rate). The higher the score, the more Google likes an ad. The lower the score, the less Google likes an ad.

What is AdWords Ad Rank?

Now let’s move over to AdWords ad rank. This is a value that Google assigns to various ads that are competing for the same keyword. So for example, if five businesses want their ad to show up for the keyword “new homes in St. Louis”, then the ad rank will ultimately determine who gets first position, second, third and so on.

Ad rank is calculated on a few factors, including: the bid amount (how much the business is willing to pay to have their ad show up in the top spot), the quality score (as described above), and something new as of 2013 that we’ll focus on next.

Extensions and Other Formats

In late 2013, Google implemented one of its oh-so-wacky algorithmic changes, and made the expected impact of extensions and other formats a major component of how quality score and ad rank are calculated. HubSpot does a nice job of translating this policy change into terms that folks outside of Google’s lair can understand: “the more fancy features and ad formats you use, the better your Ad Rank is going to be”.

For example, all else being equal, an advertiser that puts sitelinks on its ads (i.e. additional links that searchers can click and go to other pages on the site) will have a higher quality score and ad rank, and therefore will likely pay less for the click and get a higher spot.

So, why does Google love extensions and other formats? The answer is simple and shouldn’t surprise anyone. These things make ads larger and more eye-catching, which means that there’s a greater chance that searchers will click on them (it doesn’t matter where searchers click on the ad – a click is a click!).

When that happens, Google makes money. When that doesn’t happen and searchers click an organic search result instead, the Google doesn’t make money. And you know something? We have it on good authority that Google likes to make money. Just call it a hunch.

Learn More

If you’re trying to unravel how quality score and ad rank are calculated, or you’re finding that you’re still paying too much for your clicks and yet barely showing up on page #1 (let alone spot #1), contact us today. We have in-depth experience managing AdWords campaigns – both from the ground-up, and optimizing existing campaigns so that they’re getting much better results for far less spend. Your consultation with us is free. And remember: there’s no calculus or algebra – we promise!

Have you taken the leap into incorporating AdWords into your inbound marketing strategy? If not, check out our FREE eBook “Why Google AdWords Should Be Part of Your Inbound Marketing Strategy” now: