The Ad Rank Forecast: Would a Higher Quality Score Beat a Higher Bid?

Marketing Academy · Field Work●Paid Ads

All projects·From: Quality Score & Ad Rank

MiniForecast· 15 minutes

PolicyBazaar (PB Fintech)

Objective: Given four competing advertisers' bids and Quality Scores in the same auction, calculate Ad Rank for each and forecast both the resulting position order and the CPC outcome of a Quality Score improvement.

You manage paid search for PolicyBazaar's term life insurance vertical and want to prove to a stakeholder that improving Quality Score can outrank a richer competitor without raising the bid.

Apply the lesson's Ad Rank formula to forecast the auction outcome, then check the result against the CPC-multiplier table.

Before you start

What you'll need

Free path (everything below is enough to finish)

Google Sheets

FreeBuild the Ad Rank and CPC forecast tables

Free, no account access needed for a forecast exercise

The process

2 steps

Step 01 of 02

Ad Rank = Quality Score x Maximum Bid + Other Signals

Ad Rank is roughly Quality Score multiplied by Maximum Bid, plus other signals like device and extensions. A lower bidder with a higher Quality Score can outrank a higher bidder with a lower score.

Four advertisers bid on 'term life insurance online' with different bids and Quality Scores. Ignoring other signals, what is the rank order?

Google Sheets— A 4-row table of Bid and Quality Score per advertiser.

Procedure

List each advertiser's Max Bid and Quality Score in a Sheets table
Add an Ad Rank column computed as Bid x Quality Score
Sort descending by Ad Rank to get the auction order

Sample output

Advertiser        Max Bid   Quality Score   Ad Rank (Bid x QS)
PolicyBazaar       $3.00     8               24.0
Competitor A       $5.00     3               15.0
Competitor B       $4.00     4               16.0
Competitor C       $2.50     9               22.5

Rank order: PolicyBazaar (24.0) > Competitor C (22.5) > Competitor B (16.0) > Competitor A (15.0)

Healthy

PolicyBazaar wins the top spot at $3.00 against Competitor A's $5.00 bid, purely because QS 8 beats QS 3.

Unhealthy

Assuming Competitor A wins because $5.00 is the highest bid on the list, ignoring the Quality Score multiplier entirely.

What this means

Ad Rank is a product, not a sum, so a large Quality Score gap can flip the outcome even against a much larger bid gap.

So what do I do about it?

Symptom	Action	Effort
A competitor is outbidding you 60%+ but you still rank higher	Don't raise the bid to 'be safe'; the QS advantage is already doing the work	5 min

YouYou can do this yourself, no engineering access required.

Step 02 of 02

Quality Score CPC multiplier tiers

The lesson's CPC multiplier table shows QS 10 gets up to a 50% discount vs. baseline, QS 7-9 gets 20-30% off, QS 5-6 is roughly baseline, and QS 1-4 pays a 25-400% premium.

If PolicyBazaar raises Quality Score from 8 to 10 on this keyword, what should happen to the CPC actually paid, holding position roughly constant?

Google Sheets— Same table, add a forecast row for QS 10.

Procedure

Add a forecast row: same $3.00 bid, Quality Score raised to 10
Apply the lesson's discount tiers to estimate the new effective CPC range
Compare forecast CPC against the current QS 8 CPC

Sample output

Scenario          Bid      QS   Discount tier applied      Forecast CPC range
Current            $3.00    8    20-30% off baseline         $2.10 - $2.40
Forecast (QS 10)   $3.00    10   up to 50% off baseline      $1.50

Healthy

Raising QS from 8 to 10 forecasts a further CPC drop from roughly $2.10-2.40 down to about $1.50, without touching the bid.

Unhealthy

Concluding the CPC is fixed at whatever the bid is set to, and that Quality Score only affects position, not price.

What this means

Quality Score compounds: it wins better positions AND buys them at a lower actual price than the max bid suggests.

So what do I do about it?

Symptom	Action	Effort
Stakeholder asks to raise the bid to defend position	Show the forecast table; a QS push to 10 is cheaper than a bid increase for the same or better position	30 min

YouYou can do this yourself, no engineering access required.

Final deliverable

An Ad Rank comparison table across 4 advertisers plus a before/after CPC forecast for a Quality Score improvement from 8 to 10.

See a reference example

Sample output

Lenskart, Ad Rank forecast (excerpt)

Advertiser     Bid      QS   Ad Rank
Lenskart        $2.20    9    19.8
Competitor X    $4.00    4    16.0

Forecast: raising Lenskart's QS from 9 to 10 at the same bid moves effective CPC from ~$1.80 toward ~$1.60, while position stays #1.

Success criteria

You're done when you can:

Correctly computes Ad Rank as Bid x Quality Score for all 4 advertisers
Correctly forecasts a lower CPC (not just better position) from the QS 8 to QS 10 improvement