Quick fact: I wrote this article after explaining how the Google Search Ads auction works for a new client today (which is a frequent question for new advertisers). So I hope this article will help others with the same questions.
Have you ever wondered how Google decides which ads to display when you search for something? It may seem like a simple process, but a mysterious auction takes place behind the scenes. The Google Search Ads auction is a highly competitive environment where advertisers battle it for the coveted top spot on the search results page. How are bids used to determine an ad’s position? What role does Quality Score play in the auction? In this article, we’ll uncover the secrets of the Google Search Ads auction and show you how to increase your chances of winning. So get ready to enter the world of Google Search Ads and unravel the mystery of the auction.
How does the Google search ads auction work?
- Advertisers create ads and select keywords: Advertisers create ads they want to display when someone searches for a particular keyword. They also choose the keywords that they want to target with their ads.
- The user enters a search query: When a user enters a search query on Google, the search engine checks to see if any ads match the keywords in the search query.
- Auction begins: If there are ads that match the user’s search query, an auction starts. Advertisers’ bids for the keyword are used to determine the ad’s position on the search results page.
- Ad rank calculation: Google calculates an ad rank for each ad in the auction. Ad rank is calculated by multiplying the advertiser’s maximum bid for the keyword by their Quality Score. Quality Score is a metric that measures, among other factors, the relevance and quality of an advertiser’s ad and landing page.
- Ad with the highest ad rank wins: The ad with the highest ad rank wins the auction and is displayed in the top position on the search results page. The ad with the second-highest ad rank is shown in the second position, and so on.
- The advertiser pays for clicks: Advertisers only pay when someone clicks on their ad. The cost per click (CPC) is determined by the second-highest ad rank divided by the advertiser’s Quality Score plus $0.01. This means the advertiser with the highest ad rank pays just enough to beat the second-highest ad rank.
Some questions I get from time to time:
Questions about Google Search Ads auction
How is an advertiser’s maximum bid for a keyword used in the Google Search Ads auction?
An advertiser’s maximum bid for a keyword is the highest amount they are willing to pay for a click on their ad when a user searches for that keyword. In the Google Search Ads auction, the maximum bid is one of the factors used to determine an ad’s position on the search results page. Specifically, the top bid is multiplied by the ad’s Quality Score to calculate the ad’s ad rank. Therefore, advertisers with higher maximum bids for a keyword will generally have a better chance of winning the auction and achieving a higher ad rank.
What is Quality Score, and how does it affect an ad’s position in the auction?
Quality Score is a metric that measures the relevance and quality of an advertiser’s ad and landing page. It is determined by several factors, including the ad’s relevance to the keyword, the quality of the landing page, and the expected click-through rate of the ad. Quality Score affects an ad’s position in the auction by being multiplied by the maximum bid to calculate the ad’s ad rank. Therefore, advertisers with higher Quality Scores will generally have a better chance of winning the auction and achieving a higher ad rank, even if their maximum bid is lower than their competitors.
Is ad position determined solely by the highest bid, or are other factors considered?
Ad position is not determined solely by the highest bid. While an advertiser’s maximum bid is important in determining ad position, it is not the only factor. Ad position is also affected by the ad’s Quality Score, which is determined by several factors, including the ad’s relevance to the keyword, the quality of the landing page, and the expected click-through rate of the ad. Therefore, an advertiser with a lower bid but a higher Quality Score can achieve a higher ad position than an advertiser with a higher bid but a lower Quality Score.
How is the cost per click (CPC) determined for an advertiser in the auction?
The cost per click (CPC) is determined by the second-highest ad rank divided by the advertiser’s Quality Score plus $0.01. This means the advertiser with the highest ad rank pays just enough to beat the second-highest ad rank.
What happens if two advertisers have the same Quality Score for a keyword?
If two advertisers have the same Quality Score for a keyword, the ad with the higher bid will generally be given preference in the auction. However, other factors, such as the user’s location and device, may also be considered in determining the ad’s position.
How can advertisers improve their Quality Scores to increase their chances of winning the auction?
Advertisers can improve their Quality Scores by creating highly relevant ads, optimizing their landing pages, and improving the click-through rate of their ads. Advertisers should use the targeted keyword in the ad’s headline and description to create relevant ads. The landing page should also be relevant to the ad and provide a good user experience. To improve the click-through rate of their ads, advertisers can experiment with different ad extensions and call-to-actions.
In summary, Google Search Ads auction bid works by determining which ad will be displayed based on the advertiser’s bid for the keyword and their Quality Score. The ad with the highest ad rank wins the auction and is displayed in the top position on the search results page. Advertisers only pay when someone clicks on their ad.
To learn more
Video: How the Search ad auction works
