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Do New Advertisers Pay 4x More Than Established Advertisers?

Do New Advertisers Pay 4x More Than Established Advertisers?

An experienced search marketer is aware that what you pay per click within Google is directly tied to your Quality Score and the Ad Rank (Quality Score * Max CPC Bid) of the other advertisers. If you are new to search marketing, you might not know that only in the last few years did Google even give advertisers the ability to see their Quality Score for the keywords in their account.

Prior to this change, which happened in 2007, Google only showed a text representation for Quality Score (Poor, OK, and Great). Many search advertisers may be surprised to know that your actual Quality Score and the Quality Score displayed in your account are not the same. Every keyword has a Quality Score, every ad has a Quality Score, and every account has a Quality Score; however, the only Quality Score number that

Google is willing to show advertisers is the Quality Score tied to the keyword (which is turned off by default). When I’ve spoken with Google, I’ve been told that I should focus on improving the keyword level Quality Score, but tests that I’ve run have shown—hands down— that account and ad Quality Scores have big implications when you consider your per–click costs.

Recently, I did a case study to measure the impact of these hidden Quality Scores. To set up the test, I replicated one of our accounts into a brand new account. Shortly after, I began to see keyword level Quality Scores at even levels between the two accounts. I set maximum CPCs equal to one another for all keywords in both accounts, and lo and behold, actual per–click costs were 4x higher in the new account than the older account, largely driven by the historical account Quality Score.

When I made all other factors constant (excluding the account), I saw a 4x difference in CPCs because the original account has over 5 years of high historical performance that drove better account level Quality Scores than the new account had been able to achieve in a few weeks’time.
nterestingly, accounts default to not show keyword level Quality Score in the AdWords interface—almost like they’re trying to hide it from less savvy users. So why wouldn’t Google share this information? There are three reasons I can think of that I believe have some merit (please comment below if you think of other viable reasons):

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  1. Google thinks showing this information will only complicate a process that they hope to make easy enough that the least sophisticated among us can feel comfortable running their own account.
  2. Google offers free advertising credits to new advertisers. By having an account level Quality Score, advertisers are discouraged from constantly creating new accounts for the free advertising (I think this is the least likely concept).
  3. With so much focus on improving Quality Score, it is common for advertisers to restructure campaigns and occasionally to make large enough adjustments that warrant setting up new accounts. The more frequently advertisers add new accounts, the more the market pushes CPC bids higher.

There are probably a hundred other reasons that Google doesn’t share this information, but I think it is worthwhile to note that as you optimize your paid search accounts, you should keep in mind these invisible Quality Score components and make the decision that is best for you as an advertiser, and not what is most convenient for Google and their shareholders.

Just last week, Alex Cohen of Click Equations and I were talking about how we, as search marketers, need to look out for our own self–interest and. in doing so need to demand more from Google, Yahoo, and Bing. I am asking you today to contact your Google rep and demand that they begin to display account level and ad level Quality Scores. The only way we can invoke change is if we demand it and expect it.


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James Green

Search Marketing

James Green is the founder of Siftable.com which serves as a search marketing agency/consulting group with expertise in building, growing ... [Read full bio]

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