Wow, Google’s Quality Score is really starting to bite hard on some PPC budgets. I’ve just taken a call from Auctioning4U, a UK-based firm that helps people sell goods on eBay, and they are reporting that average click costs have risen by almost 2,000% in just one week.

Trevor Ginn, Head of Consulting at Auctioning4U, told me that one keyphrase has jumped in price from 12p to £2.75 in the last week.

In another example, the price went up from his default of 30p (which paid for an average Adwords position of 1.3) to £5.50. “Feel my pain,” he says, not without reason.

Naturally, Trevor is wounded and reeling, and puzzled as to what he’s done wrong. He’s not really done anything wrong. It is simply a case of Google shifting the goalposts.

Yup, this PPC hyperinflation is linked to Google’s newly-enhanced focus on ad quality. It could be a case of too much, too soon.

We know that Google is starting to look at landing pages to evaluate ads. With Google Adwords the position of an ad isn’t simply linked to the amount you are prepared to spend, but also to the quality of the ad.

Quality has historically been judged by clickthrough rates – poorly performing ads are deemed to be less relevant that others that generate a higher number of clicks. It is of course in Google’s interest to generate as many clicks as possible, since this is how it earns 95% of its revenues.

But the quality of an ad also takes into account the ad copy. For example, keywords in the ad headline are thought to matter, since repeating the keyphrase a user has searched on is more likely to attract interest (especially since Google emphasises keywords in bold, in organic results and also in the ad text / headline).

Now we have another factor: the landing page. Smart marketers know all about landing pages – they are vitally important in driving customers towards the checkout / business goal. Google knows all about landing pages too. It knows that advertisers who ignore best practice and link to generic pages, such as the homepage, are less likely to generate a return on investment. Targeted landing pages will improve ROI from Adwords.

Google is now forcing marketers to look at their landing pages, in order to encourage repeat business for itself. Ultimately, it knows that campaigns that do not perform are likely to be stopped, once marketers analyse ROI. That would damage Google’s business. It needs to convince marketers that improvements to landing pages is the way forward. And it is.

The trouble is that marketers like Trevor are experiencing PPC hyperinflation, and this has happened very quickly (in the space of a week). Furthermore, Google is not providing sufficient transparency to understand the reasons why keyword costs have risen so sharply.

What does this mean for Google? Well, let’s look at Trevor’s case in a little more detail to find out how he will react.

The phrase ‘UK auction’ cost 30p last week. Trevor’s ad used the headline: “We auction online”, so the search query was replicated – good news for the quality score. The ad text mentioned “no sale, no fee” and “you get cash”, so the call-to-action is there to drive clicks. And drive clicks it did – Trevor would expect to attract a few hundred visitors every month from his ad.

Yet now the price has increased on an insane level, so Trevor will simply cancel his campaign. Google Adwords advises him to “increase bid to £5.50 or improve quality score”.

Presumably Trevor’s problem is with his landing page? Google doesn’t make that clear. Trevor links the ad not to his homepage, but to a page describing Auctioning4U’s services, which seems reasonable enough, given the ad text.

At first glance I thought he’d used an image for the landing page text, meaning Google wouldn’t be able to read his page, but should it matter if he did? What if he linked to a Flash widget, like our one-minute pitch? That too would damage his quality score, it seems, even though it might be the best tool to quickly communicate a message to first time visitors.

All of this ties in to Martin Dinham’s comments on search marketing and the long tail. Previously it had been worth the effort to mine the long-tail (those keyphrases that aren’t used very often but convert very well, albeit in small numbers). But Martin noted that the price had vastly increased in recent weeks, making the time-consuming mining of the long-tail increasingly unprofitable. Since this is a key business driver for PPC-focused search agencies, it could spell trouble.

Trevor of course needs to look at improving landing page quality, but making changes to websites is not normally an easy process for a marketer. So what does he do in the meantime? He will switch off that campaign, that’s what he’ll do. Surely no business can tolerate this level of PPC inflation?

Maybe Google has ramped up this focus on quality too quickly? Maybe the quality score weighting is too savage? Maybe it should tell Trevor exactly where the problen lies – it isn’t SEO, after all… 

What we do know is that this sort of thing will affect many marketing folk, so do send word if you experience similar issues.

Check out what Google says about the Adwords Quality Score