[JimWillTri]

Can you give an idea of how much lower the cost per click could be with a very high quality score (ie 5% of Googles suggested cost per click)?

"With a high Quality Score you can get clicks for a much lower cost. Some experiments put this at about 5% per unit of quality score change (Quality score is on a scale of 1 to 10)."

[geetanjalityagi]

As I understand from your question, there are two things here one is average cost-per-click which is how much you actually pay for each click and this is usually lower than how much you bid (max CPC). I've seen avg. CPCs fall by 10 - 50% (depending on the industry) when Quality Score changed from 5 to 7 for keywords. You can actually track Quality Score and overlay it with avg. CPC and other stats to see a correlation for your account. We created a tool for doing this. The second is Google's suggested cost per click which is the recommended first page bid that Google shows next to each keyword. This is a function of your Quality Score and competition. You'll notice that keywords with a low Quality Score have a relatively high required first page bid. Please feel free to email me (geetanjali att optmyzr.com) with any questions!

[JimWillTri]

Thanks very much for the detailed answer. That really explains things from Googles perspective. Very nice service you offer. I think that it will serve to save people a lot of money on Adwords.