Now is quality score determine by position through the position normalization algorithm ? I'd imagine so because if I'm right I notice when my ad runs in a new position the QS will go to ok, but after it collects some clicks in that position the QS will go up to great and usually stay there I think this would fall under the category of position normalization? So for example if I been bidding on spots 1,2,3 and the data has built the QS up to great, but then I bid down to number 7 my QS goes to ok, but after collecting clicks in that position my QS goes back up to great I'd imagine the Google database is collecting calculating the CTR / Quality Score / Cost for each position? see what I'm saying?
That's what I was thinking becuase if I remember right I was bidding super high when I first started my campaign and my ads were setting in positions 3-4 on an average, but if I'm right after time went by my ads started averaging position 1, but I just bidded down again, so therefore my ads might move up again and I can just keep bidding down until I get to the lowest avg. cpc.
I have no documentation to back this up, but it seems that AdWords doesn't measure straight CTR, but rather "Will this ad, with it's high CTR, generate more revenue for us than the one above it? If so, let's move it up so we can get it more clicks." In other words: Pos#2 ad is bidding $1.00 with a 2% CTR Pos#3 ad is bidding $0.50 with a 5% CTR Since, per 1,000 impressions (Mil): Pos#2 ad generates $20 per Mil ((1,000 x 2%) x $1.00) Pos#3 ad generates $25 per Mil ((1,000 x 5%) x $0.50) "By moving this ad up we can boost the CTR to 5% or 6% turning it into a $28-$32 per Mil ad and still make $18 per Mil of the other." In other words, by moving up the higher Revenue per Mil ad, they've increased their revenue by 6% per Mil.
The thing is though Adwords doesn't allow you to see your actual AdRank number. I'd imagine as your AdRank improves your Bid Rate Decreases, but the question is how long and how many clicks or how much do you have to spend to achieve this. I guess its just a black box and I'll just keep spending to find out
Well just lots of testing.... Just keep putting money into it I put in around 500 each round I have collected almost 400 clicks and have put a lot of money into my campaigns, but I will tell you this I've gotten my click cost down 75 percent since I started and it keeps going down.
Read this: http://adwords.google.com/support/bin/answer.py?answer=46675 and this: http://www.google.com/adwords/learningcenter/text/19428.html