According to the statistics published by Google Ads (Google AdWords), the probability of buying a product or using a service by users who clicked on Google ads and entered your website is 50% higher than others. In addition, Google Ads increases brand awareness by 80%.
Google Ads is an online platform for click ads or pay-per-click, which allows business owners to compete with their competitors in the business world and display their ads in the highest position in Google search results. The Google Ads system is an online bidding system where advertisers announce their bids to get a better position. Of course, this position is not only dependent on the bid, and another factor called “Quality Score” plays a role in it.
In this article, it has tried to efficiently deal with the effective factors in the Google AdWords auction, so that you can optimize your campaign with a more comprehensive understanding.
Table of Contents
The concept of auction in Google Ads
What is an auction?
Bidding is a process that happens with every search on Google, during which it is determined which ads will be shown on the search result page and in what order.
Every time an eligible ad is displayed, it enters the Google auction process, during which it is determined whether this ad will be displayed or not, and if so, where it will be displayed on that page.
How does the auction work?
When someone searches on Google, the Google Ads system lists all the ads that match the main search keyword; Among the listed ads, it ignores those that do not qualify, such as ads that target a specific country or those that violate Google Ads policies; Among the rest of the ads, only those with high “Ad Rank” may be displayed.
It can be concluded that Ad Rank determines the display or non-display as well as the display position of your ad. The higher your Ad Rank, the more likely you are to get a higher position in search results.
What is Ad Rank?
When running an advertising campaign in Google Ads, we need to know how the position of each ad is determined. It is important to note that the ranking of Google ads is not only based on the cost of each click other factors are involved, which are generally defined as Ad rank.
Ad Rank calculation formula
Ad Rank = max. Bid * Quality Score
Any ad that can score higher in this formula will rank higher than its competitors on the search results page.
For example, suppose for the digital marketing keyword, we consider the maximum price per click to be 1 dollar and our Quality Score for this keyword is 10, as a result, our Ad Rank will be 10. If our competitor enters the auction with a maximum price of $1 per click and a lower Quality Score, for example, 5, the Ad Rank will be equal to 5. Therefore, if this competitor wants to compete with us, who have a higher Quality Score, he should increase the suggested price per click to $2.
How to get a better Ad Rank?
As explained above, Ad Rank mainly depends on two factors:
- Bid price
- Quality Score
Familiarity with pricing strategies in Google Ads auction
In connection with the bid price, Google Ads has provided different price bidding methods known as Bid Strategy. These strategies can be different according to your advertising goals.
Pricing strategy is divided into two main types:
- Manual Bidding
- Automated Bidding
In the first type, Manual Bidding, you control the pricing, but in the second type, or Automated Bidding, you will allow Google Ads to perform calculations to determine the bid according to your goals.
This pricing strategy can be adjusted when creating a campaign in the Bidding section; Of course, after creating a campaign, it is possible to modify and edit it from the settings section of each campaign.
- Manual CPC Bidding
In this strategy, you can determine the cost of advertising in Google by offering the highest cost per click for Adgroup or any of the keywords in it. This method is the best option for people who want to have precise control over their ads.
- Automated Bidding
The smart or automated pricing method can vary depending on the advertiser’s goal. Its types are mentioned below:
Target Search Page Location Bidding
In this strategy, Google Ads automatically changes the cost per click so that your ads are placed at the top of the search results or any position on the first page of the display. In fact, in this strategy, you have left the pricing to Google Ads to consider the cost of each click based on your desired position.
Of course, it should be noted that this strategy does not 100% guarantee that your ad will be displayed in the position you have determined, because on the one hand, these costs are approximate, and on the other hand, other factors such as Quality Score are involved in displaying ads.
Target Outranking Share Bidding
In this strategy, to be able to compete with your competitors, Google Ads automatically increases and decreases the cost of each click. Of course, you can consider your competitor’s domain as well as the most you are willing to pay to compete.
Note that Google is not going to deduct the exact amount you have included per click from your account; Rather, you have allowed Google to compete with your competitor to show the ad up to that amount, and Google can increase the cost of each click up to that number.
This is another automated Google Ads pricing strategy that helps you get the most clicks possible for your Google ad budget. In this way, you can determine the maximum price per click and control the maximum cost per click.
If you don’t set the cost per click, Google Ads will try to adjust the costs according to your goal, which is to get the most clicks.
Target cost-per-acquisition (CPA)
In this strategy, you will have more control over automatic pricing. In this way, Google Ads tries to automatically adjust the bid in such a way that you get as many conversions as possible according to your defined CPA target. Some conversions may cost more and others less than your goal.
Enhanced cost-per-click (ECPC)
In this strategy, Google determines the cost of each click based on the two factors of return rate and conversion rate of your campaign. This means that Google Ads will adjust the cost according to the chance of users becoming customers for you.
This item is activated in Manual CPC mode by ticking Help increase conversions with Enhanced CPC.
Target return on ad spend (ROAS)
In this strategy, Google AdWords automatically sets bids in such a way that you get the maximum amount of conversions for the cost of advertising. Some conversions may have higher and some lower ROI than the set target.
This strategy automatically adjusts your bid to get the most conversions using all of your budget. In this strategy, Google optimizes to get the highest conversion volume. This strategy is useful when you have a large budget and you want your ads to be in a way to gets the most conversions.
Getting to know Quality Score
Quality Score is a diagnostic tool to show the quality of your ads compared to other advertisers. This score is measured at the level of keywords and on a scale of 1 to 10.
A higher quality score indicates that your ad and the landing page the user was directed to compared to other advertisers were most relevant to the searched keyword and were more efficient for the user.
How to calculate Quality Score
The quality score is calculated based on a combination of the performance of the following 3 items:
Expected Clickthrough Rate (CTR) or expected conversion rate; That is, the probability of your ad being clicked at the time of display.
Ad Relevance or the connection of your ad, in the sense of how much your ad is in line with the user’s search intent.
Landing Page Experience or the user’s experience of your landing page in the sense of how relevant and useful your landing page is for the user who clicked on the ad.
Each of the above will be characterized by 3 levels:
- Above average
- Below Average
These levels are determined based on a comparison to other advertisers whose ads have been shown for that keyword in the past 90 days.
If each of the 3 items involved in the Quality Score is placed in one of the Average or Below Average levels, it means that that item can be improved, which will eventually lead to a higher quality score.
According to the things that have been said, it can be concluded that launching an advertising campaign in Google Ads alone cannot make the business successful; What is very important is to optimize the campaign and achieve the set goals with the lowest cost.
To be able to optimize Google AdWords advertising campaigns, one must first have a complete understanding of the mechanism of its process and identify the factors affecting it.
By reading this article, you have become familiar with how the Google Ads auction works and you have found that, contrary to the proverb “The more money you pay, the more you eat”, in the Google Ads system, you are not going to get a better position by spending more money, and other factors are also It is involved.