Understanding Ad Rank on Google AdWords
January 10, 2013 No Comments PPC Sam


 

 

Often people think that in order for your ad to rank the highest on Google Search one must allocate each keyword with a higher cost-per-click (CPC) than its competitors. This theory is false. The ultimate goal for Google is for their users to have a positive Internet experience. There are many different calculations with the Google Adwords Quality Score that can depict if your ad will be displayed in the top spots in Google Search.

 

Understanding that the Google Auction is not solely based on price allocated to each keyword is very important. The quality of your destination URL could ultimately decide if your ranking will be higher than your competitors. Having a ranking based off relevant links is great news for smaller companies since larger organizations are not able to control the ad market by allotting the most money per keyword.

What is a Quality Score?

There are three components to Google’s definition of quality score:

  • Click-Through-Rate
  • Relevancy
  • Landing Page Quality

Once your ad is displayed, Google is able to record if users are clicking your ad more than others. If you have a higher click-through-rate, your ranking on Google will increase. For relevancy, the ad must fit the keyword the user typed in to the search bar. Finally, the landing page quality is the actual destination URL you are taking your user to once they click your ad. You want your content on your landing page to be relevant to your sponsored ad. Google is able to read the landing page for keywords and see if your content is relative to your displayed paid ad.

Max Bid x Quality Score = Ad Rank

      Max Bid

Quality Score

Ad Rank

Position Rank

$4.00

1

4

4

$3.00

3

9

2

$2.00

6

12

1

$1.00

8

8

3

The table above shows that the higher the Ad Rank, the better position your ad will be shown on Google Search. Therefore, even though a competitor had the highest max bid, they are still in position 4 because of their low quality score. In this example, the best performing ad is $2.00. Therefore, the company with the max bid of $2.00 will be positioned at number 1, the max bid of $3.00 will be ranked 2, the max bid of $1.00 will be position 3 while the $4.00 max bid is the lowest position rank just because its quality score is very poor.

Conclusion

Just because the advertiser with a maximum bid of $2.00 is in position 1, it does not necessarily mean that they will have to pay their highest maximum bid. There is a more complex equation Google uses to determine the actual price each advertiser will have to pay. Click here to watch the full explanation of the Google Ad Auction presented by Hal Varian, Chief Economist at Google. However, the most important concept to understand is that just because you are allocating the most money per click, it does not necessarily mean you will be in the first position on Google’s Paid Search. The ad’s quality score is most relevant to ranking the highest. This concept is great for smaller companies because they won’t be forced out of the ad market. Having the highest click-through-rate, relevancy, and precise landing page will land you on the top of Google Search.

Sam Sherman is a PPC Consultant in Cleveland. Currently working for Rosetta, Sam works primary on off-site promotion and Paid Search campaign management for the financial service industry. Sam all aspects of digital marketing solutions for small businesses– including web design, search engine optimization (SEO), paid search (PPC), and social media marketing.

About The Author
Sam Sam Sherman is a PPC Consultant in Cleveland. Currently working for Rosetta, Sam works primary on off-site promotion and Paid Search campaign management for the financial service industry. Sam all aspects of digital marketing solutions for small businesses- including web design, search engine optimization (SEO), paid search (PPC), and social media marketing.

Leave a reply

Your email address will not be published. Required fields are marked *

Follow

Get every new post delivered to your Inbox

Join other followers