In order to be successful in your Google marketing efforts, you need to understand how the process works.
The first thing you’ll want to understand is: What is the Google Ads auction?
Simply put, when a search query is entered into Google, Google Ads will run a quick auction to see which ads should be shown and how they should be positioned.
This occurs every time an ad is eligible to appear for a search term.
How does Google determine which ads are eligible to be shown?
Ad Rank is the value Google uses to determine which ads are eligible to be shown in search results and where they’ll be positioned. It also determines the cost per click (CPC) an advertiser will pay for an ad.
The higher the ad rank, the higher an ad’s position in Google.
How is Ad Rank calculated?
Ad Rank is calculated using the following formula:
Max CPC Bid x Quality Score + additional factors
The additional factors include things like Ad Rank thresholds, competitiveness, the impact of ad formats and extensions, and search context. This goes to show that spending more on ads alone isn’t enough to grant you the best ad rank.
Quality Score is Google’s measure of the quality and relevance of your ads, keywords, and landing pages. It’s measured on a scale from 1-10 and is based on historical impressions for exact searches of your keywords.
A high Quality Score can help you achieve a higher ad rank and lower costs, ensuring users are seeing ads that are relevant to them first.
Cost Per Click
As the name implies, cost per click is the price you pay for every click your ads receive. You will choose a max CPC when setting up your campaign in order to keep your ad spend within your budget. Your Ad Rank will have a direct effect on this because Google Ads uses a second-price auction system.
This means the actual CPC you pay is generated based on your Quality Score as well as the Ad Rank of the advertiser beneath you, plus 1 cent. You can expect this cost to change with each auction, but other than that, Google does not reveal how the average CPC for ads is calculated.
The importance of Ad Rank
Google has a minimum Ad Rank requirement for ads, which is why yours will not be shown if it doesn’t meet the thresholds.
High Ad Rank leads to a greater clickthrough rate (CTR), subsequently increasing your lead flow. You can expect your CTR to change dramatically depending on your Ad Rank.
The average CTR for all Google Search Ads is around 3.17%. But with a high Ad Rank, you can expect to see a CTR of 6% or more when ranking #1 in the search engine results.
The Google Ads auction is triggered by every real-time Google search to decipher which ads will be shown and in what order. Without a good Quality Score and Ad Rank, your ads won’t be shown. For help getting your ads shown on Google, schedule a free 45-minute strategy call with Bizzuka today!