Pay Per Click - Quality Score and Cost

Pay per click advertising refers to the placement of an advertisement on the search results page. The advertisement is selected in a process that involves the keywords that are used in the search. When the advertisement is clicked, the visitor is taken to the website of the advertiser and the advertiser is charged a sum of money.

There are two initial steps involved in developing a pay per click advertising campaign. These are to determine the budget and to decide on the keywords. It should be noted that not all keywords cost the same amount of money. The way in which the actual cost is calculated is quite complex and is frequently misunderstood.

When an advertising campaign is set up there is the option to choose a large number of keywords. Naturally some of these will be more appropriate to the advertisement then others. When these have been chosen then a bid is made on them; this indicates the maximum price that the advertiser is willing to pay for a click-through.

Once these have been determined the advertisement must be designed. This is invariably a short advertisement with a title, two lines of text and a link. As it is so short it is necessary to chose words with a great deal of care.

When a searcher makes a query, the search engine determines whether the query terms match the selected keywords, and determines the value of a parameter called the Quality Score. This reflects the degree of match between the selected keywords and the actual text of the advertisement. The higher the Quality Score, the more highly the advertisement will be featured in terms of its positioning on the search results page.

This also influences the amount charged for a click on the advertisement; for instance, if it is at the lowest position then the lowest possible sum is charged; if it is at the top of the list or above the search results then the maximum amount will be charged.

The ranking of an advertisement is determined by multiplying the maximum cost per click amount by the quality score; the higher this product, the higher the rank; the higher the rank the greater the cost.

Paul Rogan
Market Defender