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> Because I think the high CTR ad is subsidizing the lower CTR ad in terms of quality score.
There's no such thing as subsidizing in Adwords. Each ad is judged on its own merits and conditions at the time your ad runs. Ads don't live in a vacuum. Their ranking and costs will be determined by what is happening at the time. If a competitor's quality and/or bid changes, that will affect you as will a slew of other factors so you cannot make assumptions.
Not to sound like a know-it-all or full of myself but, maybe others don't know what I do or just won't say it and keep it to themselves. I think it's the former.
Think about what you said. Sure, QS is shown to you at the keyword level. Actually I've wondered before why Google would do that. When Yahoo had their PPC before merging last year with Bing, they showed quality at the ad level, which makes more sense. A keyword has no quality by itself. It's not the one that determines if searchers will click your ad. Your ad determines how many times it will be clicked. It's what they see and react to, not the keyword.
Quality Score for Google and the Search Network is a dynamic metric assigned to each of your keywords. It's calculated using a variety of factors and measures how relevant your keyword is to your ad group and to a user's search query. The higher a keyword's Quality Score, the lower its cost-per-clicks (CPCs) and the better its ad position.
In a couple of days I'll pause the low CTR ad and turn back on the high CTR ad, what do you think will happen to the CPC of that higher CTR ad? Personally I think it will go far lower than it has ever been before.
Another way to look at it, a group contains ads AND keywords. They are inter-related. The conclusion is that each keyword will have a different QS for each ad. This affects their ranking and costs.
That's what I would hope for based on what you've gone through and saw so far.
You did not mention if there was any change in CTR of "more expensive" ad that is running in a single mode right now.
"The lower CTR ad MUST have a lower QS, whatever it is, and the cost calculated using it. Since it has a lower QS, your cost is higher. ".......
"If you stopped the higher CTR ad from showing, the CPC for the other ad would be the same."......
"Why expect the CPC to change for the same ad?
You should see a change in QS unless both ads have the same one.".......
"There's no such thing as subsidizing in Adwords. Each ad is judged on its own merits and conditions at the time your ad runs"......
"The conclusion is that each keyword will have a different QS for each ad.".....
"QS is shown to you at the keyword level. Actually I've wondered before why Google would do that."