After all the recent attention on Quality Score, I had planned to turn my attention to bidding, and write a series of posts on this important PPC topic. But I think Ad-Rank deserves a little attention first. Ad-Rank doesn’t get very much attention – certainly a lot less than bidding, and even a lot less than Quality Score. But Ad-Rank determines your position, and to some degree whether your ads display at all. Ad-Rank Defined According to Google, “Ads are positioned on search and content pages based on their Ad Rank. The ad with the highest Ad Rank appears in the first position, and so on down the page.”
Ad-Rank = CPC bid (Max CPC) × Quality Score
So we bid to gain Ad-Rank. And we care about Quality Score because (among other things) it helps us achieve Ad-Rank. Ad-Rank and Quality Score Quality Score is important because it is weighted equally with your bid in determining where/if your ads run. The two factors are intertwined and the result is interdependent. As the chart at right shows, you can get the same Ad-Rank with a lot lower bid by improving your quality score. And as Quality Score gets more important, bidding gets less important. Not unimportant, but less important. It’s a zero-sum game. Ad-Rank and Bidding Yet while Quality Score is getting more visibility and mind-share than ever before, I’m not sure its ascent is being considered when thinking and acting on bidding. Creating bidding strategies and running bidding rules or using bidding algorithms that don’t take QS into account at all, seems strange and seriously sub-optimal. Traditionally bids are decided in an effort to impact position, and often the assumption is made that when an increased bid resulted in a higher ROAS or ROI, it was the change to the bid that was the direct cause – but I don’t know of a rule or algorithm in any PPC software today that either a) checks the actual position impact or b) checks to see if a Quality Score change was a mitigating factor. It should of course now be noted that both bid and quality score increases have other impacts beyond their influence on Ad-Rank; Google has said that minimum bid and quality score thresholds are set for achieving Top (as opposed to Right Column) positioning, for example. So there are cases where it’s wise to increase your bid regardless of Quality Score issues. Ad-Rank and You The core tenant of High Resolution PPC is that we’ve all been lulled into an over-simplified view of how paid search works, both to accelerate our adoption, simplify our understanding, and keep us from complaining about really unfair or opaque aspects of the system that is taking our money. Ad-Rank is an open secret. It’s well documented, easy to understand, extremely important, and almost never discussed. Time to change that.