The "Match Tightness" and your Ad Position in Google
In addition to your maximum bid for a cost per click (max CPC) a Quality Score is used to determine the position or rank of your ad. This Quality Score considers your keyword's CTR (Click Through Rate), ad text relevance, landing page relevance, and your keyword's relevance in relation to a user's search query. This last parameter is an interesting one for the following two reasons:
1) All other things being equal, a keyword phrase that you bid on, which exactly matches the end user’s search query, will lead to a higher Quality Score (and hence a higher position for your ad) compared to another keyword phrase, that some other advertiser bids on, and which only broadly matches the end user’s search query. As an example, let’s say: you have bid on the keyword phrase “Nokia N95” with an exact or phrase match. Another competitor advertiser has bid on “Nokia” with a broad match. An end user searches on: Nokia N95. Both your ad and your competitor advertiser’s ad will match. However, your ad has a tighter fit and hence will have a higher Quality Score (and ad position) all other things being equal.
2) But this Quality Score can only then be calculated in real time, i.e. after the end user enters their search query. Then how does Google assign a Quality Score to a keyword phrase “statically”? The answer is that the Quality Score that is assigned to a keyword is slightly different from the Quality Score that is assigned in real time to calculate the position of your ad. In particular, the Quality Score that is assigned to a keyword phrase in non-real time cannot and does not take into account the keyword’s relevance to a user’s search query.