Paid search ad bidding and a stock market have a lot in common. Like individual stocks in the stock market, the market value of a paid media keyword is determined by what people are willing to pay for it.

Some high-demand or niche keywords can be very expensive (such as “best mesothelioma lawyer“); others may be worth next to nothing if nobody is bidding on them. Unlike the stock market, however, in a paid media auction each participant is paying a different price for the same commodity.

In their recent article How to Win in the Google Stock Market, Search Engine Watch explores one of the best parts about the paid search playing field: it isn’t level at all.

In paid media, the value of each keyword depends on the value that can be extracted from it. So to get the most out of paid media campaigns, we can either increase the value we receive from a conversion, or decrease our cost. Unfortunately, we don’t always control what people are willing to pay for our product or service. However, we can influence how much we have to pay for their click.

The Importance of Quality Score

Table depicting ad spend savings based on Quality Score, which translates into Quality Score's effect on ROIThe amount paid by each participant in a keyword auction can vary significantly based on their ads’ Quality Score, which is rated 1 to 10. A higher Quality Score will result in a lower cost-per-click bid, as search engines discount costs per click for scores over 7.0 and increase bid costs for scores lower than 7.0 (ads scoring 7.0 experience no discount or inflation). How much can the cost vary? Quite a bit, as this chart of Google’s discounts and penalties shows.

Put simply, the higher Quality Score your ads have, the lower your costs per click will be, the more you can afford to bid for keywords that have high value for your business.

So how do you increase your Quality Score? With the three key components that all major search engines use to determine Quality Score: matching searcher intent, click-through rate, and landing page experience.

Matching searcher intent

Aligning your paid search ads to match what your target customers are seeking is one of those fundamentals of paid media advertising that seems so simple, but can be far from easy. However, matching searcher intent determines much more than your Quality Score and cost per click; it also determines the quality of traffic from those clicks, which in turn affects on-site conversion rates and thus the revenue you get from paid search ads.

Improving click-through rate

Click-through rate (CTR) is a clear indicator that your ad messaging and copy resonates with your target searchers. Like so many aspects of paid search advertising, CTR can almost always be improved, as creating compelling ad copy is a never-ending process. Ensure constant CTR improvement by testing ad copy variations and replacing underperforming ads with new ones.

Landing page experience

A search engine’s estimation of your ad’s success doesn’t stop with the click. If a user clicks on your ad because it matches their search intent, but isn’t happy with the page they’re taken to, they’ll leave quickly. That fast bounce is tracked by search engines and will harm Quality Score, as it indicates that your site didn’t deliver on what your ad promised. Regular testing and optimizing of landing pages, usually as part of a conversion rate optimization (CRO) engagement, can boost both Quality Score and on-site conversions, producing both savings and revenue.

As you optimize your ads and landing pages, your Quality Score will increase over time, and can make an impressive difference in your paid search spend. For instance, over 5 years, we saved one client more than $600,000 in paid search ad costs solely by improving Quality Score. What kinds of savings could you see from a higher Quality Score?