Purpose Behind Quality Score
The major search engines have each independently implemented efforts to maintain and improve the quality of ads listed on their sites. The primary reason for this is to improve the experience of users who click on sponsored links. It is reasonable to assume that users who have a great experience when clicking on ads will click on them more frequently, thus increasing advertising revenues for the search engine.
In addition, Google chose to introduce variable minimum bids at the same time as it introduced Quality-Based Bidding. On the surface, this new feature allowed advertisers to bid as little as $0.01 to have their ad shown. However, in some cases advertisers found their minimum bids for some ads were raised to as high as $5.00 or $10.00. By implementing variable minimum bids Google created a mechanism whereby the company could set different minimums for different advertisers for the same keyword, and potentially increase the average minimum bid without the advertising community as a whole being made aware. Furthermore, by raising minimums bids, Google could test each advertiser's ability to pay these increases, thus increasing competitiveness within the auctions and extracting maximum revenue from each advertiser.
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