Quality Score and the core ad metrics

Screenings almost always include a few calculations. Each one is a single division, so the real skill is knowing which number goes on top.

The five core formulas

CTR             = clicks / impressions
Average CPC     = cost / clicks
Conversion rate = conversions / clicks
CPA             = cost / conversions
ROAS            = conversion value / cost

Worked example: 40,000 impressions, 800 clicks, cost 2,400, 32 conversions, conversion value 9,600.

• CTR = 800 / 40,000 = 2%
• CPC = 2,400 / 800 = 3.00
• Conversion rate = 32 / 800 = 4%
• CPA = 2,400 / 32 = 75
• ROAS = 9,600 / 2,400 = 4, or 400%

To check your answer, reverse it. If CPA is 75 and there were 32 conversions, 75 times 32 should give the cost of 2,400.

Quality Score

Quality Score is a 1 to 10 diagnostic shown at keyword level. It is built from three parts:

• Expected CTR: how likely your ad is to be clicked for that keyword.
• Ad relevance: how closely the ad matches the intent of the search.
• Landing page experience: whether the page is relevant, clear and easy to use, including on mobile.

Each part is rated below average, average or above average. Quality Score is a guide to ad quality; the live auction uses real-time signals, so treat the score as a pointer to what to fix, not a goal in itself.

Bidding strategy concepts

Manual CPC gives full control. Automated strategies set bids for you based on a goal: maximise clicks for traffic, maximise conversions or target CPA for leads, and maximise conversion value or target ROAS for sales with different values. Conversion-based strategies need accurate conversion tracking to work well.

Common mistakes

1. Dividing the wrong way round, such as clicks / cost for CPC.
2. Confusing CPA, which should be low, with ROAS, which should be high.
3. Forgetting to convert a decimal like 0.025 into 2.5%.
4. Judging a keyword on CTR alone when it never converts.