In July 2005, Google introduced minimum bids for keywords based on their Quality Score. And since then there have been further improvements; the inclusion of landing page quality and landing page load time as factors in Google’s Quality Score.
In the coming weeks, Google is set to unleash further improvements to Quality Score based on feedback from advertisers:
Quality Score will now be more accurate because it will be calculated at the time of each search query Keywords will no longer be marked ‘inactive for search’ ‘First page bid’ will replace ‘minimum bid’ in your account
What does each of these changes mean to your PPC campaign?
More accurate Quality Score: The quality of ads will be evaluated each time it is triggered by a matching search query, instead of being on a static per-keyword Quality Score system. This allows for more accurate, specific and up-to-date information when determining the relevance of the ad that should be displayed.
Keywords no longer marked ‘inactive for search': Instead all keywords will get the chance to display their ad on Google’s search network unless set as paused or deleted. This follows the replacement of ‘minimum bid’.
‘First page bid’ to replace ‘minimum bid': This is being replaced to give advertisers a more meaningful metric as the feedback from ‘mininum bid’ was that it wasn’t always helfpul in getting the ad placement to where advertisers wanted. And this new metric will make it easier to determine a bidding strategy for the first page.
Here’s an example to illustrate how per-query Quality Score works:
Nancy’s Dairy advertises on the keyword ‘milk.’ Nancy’s ads perform better on the keyword ‘milk’ in the U.S. than in Canada. Her ads also perform better on the query ‘milk delivery’ than on ‘milk,’ and better on certain search network sites than on others. Instead of one static Quality Score and minimum bid that determines whether the keyword ‘milk’ is eligible to trigger an ad for all search queries, we will now determine eligibility dynamically, based on factors such as location, the specific query, and other relevance factors. For that reason, Nancy’s keyword ‘milk’ will be able to trigger an ad for search queries where it’s likely to perform better, i.e., in the U.S., on ‘milk delivery’ and on certain search network sites.
Official Google annoucement can be read on Inside AdWords