Quality score is a number between 1 to 10 and it is assigned automatically by google adwords when you add a new keyword to your account.

when it comes to quality scores every adwords manager wants 10 but for some keywords it’s never going to happen.

A combination of factors, including expected CTR, ad relevance, and landing page experience, will determine whether that score sinks or skyrockets. But not all keywords are created equal.

Quality score in the metric Google uses to determine the quality and relevance of your ad copy and landing page in relation to a given keyword. It’s then used to calculate your cost per click (CPC) and ad rank for that keyword. The higher your relevance and your Quality Score, the better your ad rank and the less you pay every time someone clicks on your ad.

Price of your ad is determined by:
CPC=The rank of ad bellow you/(Your quality score + 0.01$)

As you see the quality score is the most important factor to determine actual cpc.

Max Bid Quality Score Ad Rank Actual CPC
Advertise1  2$  10  20  16/10+0.01=$1.61
Advertise2  4$  4  16  12/4+0.01=$3.01
Advertise3  6$  2  12  8/2+0.01=$4.01
Advertise4  8$  1  8  Highest CPC

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