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Quality Score No Longer Matters, So Let's Stop Talking About It

December 30, 2018
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Paid Search

Google is going to remove the Quality Score columns from your Search Campaigns within 18 months.

*gasps*

While this seems far-fetched, think of it this way – There’s a Quality Score element tied to your Shopping, Display, and YouTube campaigns, and you’ve never had access to that data.

It’s going away because it doesn’t matter anymore. Here’s what matters in the modern era of Google Ads – Predicted Conversion Rate.

That is, Google wants to ensure that advertisers are actually delivering solutions. They are less focused on whether your ad receives a click.

Disclaimer: There are certain conditions that still require a short-term focus on Quality Score. This is rare, and we will dedicate a separate post to that.

But for the most part, the only people still focusing on Quality Score are the bad agencies and their clients that don’t know any better.

The Quality Score Ecosystem

There are three stakeholders in each Google search – The User performing the search, the Advertiser that hopes to win the click, and Google, whom will be financially rewarded when the User clicks a paid ad.

The introduction of Quality Score was an enormous milestone in the history of PPC advertising as it served as the first system of checks and balances that protected the interests of all three parties.

Quality Score maintains order by penalizing Advertisers that have suboptimal ads and landing pages. Advertisers that comply with Quality Score standards are rewarded with a lower cost-per-click.

The User wins when Advertisers write clear, relevant ads and design fast-loading, mobile-friendly landing pages.

The Advertiser wins when their costs are reduced and can profitably turn a User into a customer.

Google wins when Users click on ads. Google also wins when Advertisers see profit and commit to spending more money on their platform.

It’s a wonderful ecosystem.

Google loses when Users habitually scroll passed the ads in favor of organic results, or when Advertisers stop spending money on Google Ads. Quality Score is supposed to prevent this from happening.

An Imperfect System

Quality Score is made up of three primary components: Click-Through-Rate (CTR), Relevancy, and Landing Page Experience. 

In theory, CTR should be an excellent way to measure the quality of an ad. You would assume that Users rationally decide which ad is most relevant to them, and they express that with the action of a click. High CTR should represent high quality, right?

Unfortunately, internet Users are the least rational creatures to ever roam this planet. If you've ever analyzed the results of a web usability test, you're already aware that there is no rhyme or reason to most actions taken on the web. Behavior varies vastly and there is no set of standard behavioral expectations of an average user.

The other two components of Quality Score, relevancy and landing page experience, are bot-driven. That is, we are completely relying on Google's bots to determine if our ads are relevant and if we deliver a satisfactory landing page experience.

Optimizing for Quality Score often proves to be a wild goose chase. We've seen accounts with crazy-high CTRs, incredibly relevant ads and beautiful, keyword-optimized landing pages... but terrible Quality Scores. We've even seen accounts where branded keywords (a keyword that is the name of the company and nothing more), show a Quality Score of 3.

The system is clearly flawed.

But here's the main issue: Quality Score has existed for 14 years and there are still loads of bad ads being served on Google. Many Users are still reluctant to click on paid ads, and many Advertisers have been moving their marketing budgets to other platforms and channels.

Thanks for the memories, Quality Score. We’re ready to move on.

Where Quality Score Falls Short

Quality Score is effective in environments where click-through-rate is the leading factor to determine if an ad is useful. Users vote with their clicks and determine how relevant one ad is compared to the next.

However, Users don't go to Google to discover relevant ads. They are looking for solutions, and an ad click does not guarantee that a User is going to find a solution to their problem.

Solutions are only found at the point of conversion.

Changes to the Quality Score Ecosystem

Most Advertisers Have Improved Their Landing Pages

Non-mobile, complicated websites are penalized with low Quality Scores. While CTR has the most influence on increasing your Quality Score, a poor landing page experience would prevent you from ever exceeding beyond a low ceiling. This protected Users and was a meaningful improvement that Advertisers could work toward.

Thanks to CMS platforms like Shopify and Webflow, it’s easier than ever to create responsive, fast-loading websites that meet the minimum Quality Score requirements. This is a huge win for Users, but reduces the marginal value that could be earned by Advertisers that were once rewarded for delivering a best-in-class landing page experience.

The landing page experience element of Quality Score is no longer as pertinent, and we can therefore shift our focus to something that produces more value for each party in the ecosystem.

Users Are Now Clicking On More Paid Ads

In the early 2000s, Google's revenue model was dependent on a major change in User behavior. Their growth depended on influencing Users to click on more ads. This never would have happened if Advertisers were not incentivized to write better ads.

As such, a Quality Score ecosystem that placed great weight on CTR was an ideal solution.

Today, Google is no longer as concerned with getting users to click on paid ads (compared to organic listings).

We are all more comfortable clicking on paid ads than we were in the past. This is partially due to the original Quality Score ecosystem, but also a result of drastic changes to the design of the Google search results page.

There are now so many paid ads on a Google search results page that a User must scroll far below the fold to find organic listings. Particularly on a mobile device, this becomes a daunting task.  

Google has also done a great job disguising their ads to look like organic links. A large percentage of Google Users still do not know that the top few links are paid ads.

The following Tweet is a hilarious observation of this phenomenon:

Tweet by @IntelligentPPC

While many users, including the author of this post, are still reluctant to click on ads, the amount of paid ad clicks (and therefore ad revenue) continues to rise year over year.

Google's Ad Revenue from 2001 to 2017 (in billion U.S. dollars) via Statista.com

Thanks to stable ad revenue growth and a change in User behavior, Google is less reliant on a Quality Score system that primarily focuses on Click-Through-Rate alone.

Google can now shift to a solutions-based environment that even better protects the interests of the Users.

Improved Machine Learning

Google’s algorithms are better than ever at predicting user behavior, and better at predicting which Advertisers will deliver solutions for individual Users. For more on this, see our post, Join or Die: It’s time to embrace Google Automation.

Google stands to benefit if they can develop a new system of checks and balances that even better protects the interest of all three parties by ensuring that Advertisers are actually delivering solutions... and this system is already in place.

Higher Costs

More advertisers have joined Google, and many Advertisers are leveraging Smart Bidding to bid more aggressively on premium auctions. As a result, costs have increased, and efforts focused on improving Quality Scores do not have the same cost-saving effects that they once yielded.

Advertisers should focus less on marginal-savings-per-click, and instead shift to value-based bidding. That is, bidding more or less aggressively based on a User's likelihood of converting. CPCs will continue to rise, but if your Conversion Rate increases at a rate greater than your Cost-Per-Click, you will increase your profitability.

The chart below demonstrates an example of an increase of CPC by 10%, but an increase in Conversion Rate by 20% would play out for a sample of 100 clicks:

The result is a 20% increase in Total Conversions and 8% decrease in Cost-Per-Conversion, proving that an increase in CPC is not necessarily a bad thing. Therefore, frustrated Advertisers will learn that time spent attempting to lower costs through Quality Score optimization would be better spent optimizing for greater Conversion Rates.

Predicted Conversion Rate, The Next Frontier

This should seem obvious, but when an Advertiser implements a conversion goal, they are telling Google which User actions have value to them. If an Advertiser is able to see consistent conversions in an account, and if these conversions are being achieved within Target CPA or Target ROAS goals that are entered into the system, the Advertiser is likely profitable and will therefore continue to advertise on Google.

What’s more, if a User performs a conversion action and does not immediately perform subsequent similar searches on Google, you can assume that the User received a solution.

Everybody wins.

There are obviously outliers. Not all conversion actions ensure that User’s received a solution. However, this is much more reliable than basing this information on CTR or bot-driven perceptions of relevance and landing page experience.

This transformation has already begun. Manual CPC bidding will also be leaving us in the near future, and the Smart Bidding algorithms that will remain are heavily weighted toward Predictive Conversion Rate.

Discussions of Max CPC Bids and Quality Score will be replaced with topics we like to refer to as The Three A's of Google Ads: Automation, Attribution and Audiences. All three of these elements serve as data inputs that are fed into bidding algorithms and are essential in guiding the Predicted Conversion Rate machine.

The role of the account manager will continue to shift away from manual adjustments and more toward guiding the machine. It's our prediction that Google will kick off 2019 with a host of new features that will take us one step further down that path.

For example, we are soon going to gain access to additional inputs to help influence Predicted Conversion Rate. There are certain factors the machine cannot anticipate, such as a flash sale on an ecommerce site or a similar event that would cause a sudden spike in conversion rate.

This Isn't Really Goodbye...

While we are likely going to lose access to our Quality Score metrics, Quality Score itself is not going away. As mentioned earlier, your Shopping, Display and YouTube ads have Quality Scores that are factored into your ad rank each time an auction takes place. This is going to continue to ensure a level playing field on the platform.

However, Google will soon want Advertisers to stop being distracted by their own Quality Scores and exclusively focus on delivering solutions to Users in a profitable manner.

So stop wasting your time talking about Quality Score and focus more on understanding automation, Predicted Conversion Rate, and the other significant changes that are inevitable in the Google Ads' ecosystem.

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