A quality score is one of the least understood part of ad words.
Essentially, quality score is used to measure the relevancy of your site to Google users. In general, a higher click through rate will mean a higher relevancy to the search query. A quality score is issued at the keyword level. A quality score will reflect on the performance of your ad campaign.
According to Google each keyword can be a great, okay or poor. This is directly related to the performance of the keyword. In general a great key word will have a higher click through rate and vice versa.
There are several factors that determine an ad quality score.
Structure of a ad group
The success of an ad campaign is closely related to the group of keywords that you target. A group should be made of closely related keywords, the closer the better and more optimized your ad campaign.
When you are making a group of keywords, each key word must be the most targeted unit of a group.
The actual ad copy
Creating a good ad copy is an art and a science. Best practices include using the keyword up to three times in your ad once in the heading, body and display URL.
A landing page should be very relevant to the ad it should not be a generic webpage. A landing page should directly relate to the keyword of the ad copy.
A good practice would be to optimize your landing page for the targeted keyword. Google factors in the relevancy of your landing page when calculating your ad quality.
A controversial subject would be, does Google factor in the loading time of your landing page? Faster loading times enhance user experience and may eventually factor in your quality score.
A higher click through rate will mean a higher quality ad
The quality of the ad is the sum total of the quality score of all your keywords. By getting rid of underperforming keywords and optimizing your landing pages to reflect high performing keywords can make your ad campaign profitable again.
Other factors like ip targeting, search intent and scheduling ads have a little influence on your ad quality.