Here are a few more tidbits about QS. These are provided basically for informational purposes but can be good to know. At the very least, it may make you understand the enigmatic QS a little better.

The QS you see in your account is a whole number between one and ten. Any Adwords advertiser knows this and most know the implication of having a poor QS. However, Google doesn´t use that number in its calculations. The QS that Google uses has much more precision and contains many decimal places. So, in Google's eyes, your QS is more likely a number between 1.00000 and 9.99999, the QS you are shown rounded off.

Think of it this way. Why use a whole round number? This means that an advertiser bidding $0.20 and QS of seven would rank equally well as one bidding $0.14 and a QS of ten. Google wants more granularity than that.

As mentioned, the QS calculation are normalized to position. This means they are smoothed out to remove the effects of position. This is done so that every advertiser is on a level playing field, no matter which position their ad is served, first or forty-first. Being in lower positions, ads are generally clicked less often, in absolute terms, than those in higher positions. It would not make sense to use the ad's absolute CTR in the QS calculations.

Quality score is also calculated relative to all advertisers for that keyword. This means that your own QS is a good indication of how well you are doing against advertisers using that same keyword. Google likely does this in the following manner:

Google says they now calculate Quality Score for each search. This is likely done after the search and not during since that would require a lot of processing power. This means that, even if no advertiser makes any changes whatsoever, all advertisers will see their QS (if it were possible to see all those decimal points) change no matter if the searcher clicks on ads or not. This change will be minute but a change nevertheless. Over time, these can accumulate and eventually you may see your QS go up or down by a whole number.

Finally, you may be wondering that if QS is effectively CTR, what does Google do when you add a new keyword or new ad? After all, it doesn't know your click rate until the ads actually run. It appears that they will assign an average QS and other types of calculations.

The landing page quality portion is figured out later, once a robot visits the page which may be minutes or hours later. So you may get a good or great QS right after you create the group. But if after visiting the page it determines you have a poor quality landing page, that QS will go down to one.

Once your ad has enough impressions, the QS is adjusted in the normal way after each search. But it also appears that the system makes some calculations on your ad. Google probably makes sophisticated analysis comparing your ad to those of other advertisers with similar ads. They do after all have ten years worth of data they can rely on.

New keywords which nobody has used before, which is extremely unlikely, are probably assigned an initial QS based on similar keywords. Therefore, even if you were the only advertiser for that keyword, it is unlikely you will get a QS of ten right away. Your ad still needs to prove itself. That is why when adding a new keyword that you will rarely see your QS of ten right away.

Here is a resume of QS from this and other pages on this site: