Bidding the most money per click for a keyword on Google AdWords won’t guarantee your ad will appear at the top of the search results page. Rather, AdWords assigns each advertisement an Ad Rank that determines both ad position and the actual price paid per click.
Google AdWords needs to please two different users.
First, AdWords needs to please searchers. When someone searches with Google, there is an expectation that the results, both organic and in the form of advertising, will be relevant and helpful.
Second, AdWords needs to please advertisers. Advertisers want a fair marketplace that won’t let a crappy ad beat out a relevant, creative, and innovative one.
Google needs to provide a good experience to searchers and a good value to advertisers. So it uses a combination of ad quality and the bid amount in the pay-per-click auction to decide which ads to show at the top of the page or, really, which ads to show at all.
In 2014, Google’s chief economist, Hal Varian, delivered a superb presentation describing how AdWords auctions work, including describing several of the Ad Rank factors.
It is important to distinguish between AdWords Quality Score and Ad Rank. According to Google, the former “is intended to give you a general sense of the quality of your ads” and is reported to you in the AdWords interface. The latter “is calculated in the instant someone does a search that triggers your ad to compete in an auction.”
While all of the factors described in Varian’s presentation and in the balance of this article will impact both Quality Score and Ad Rank, it is a good idea not to confuse the terms. One describes an indication of ad quality while the other puts ad quality into the context of a specific PPC bidding situation.
Expected Click-through Rate
Google determines how likely it is that your ad will get clicked when shown for a particular keyword phrase, regardless of the ad’s position or format. To do this, Google might look at your ad’s historical performance, things it knows about the keyword phrase, and other factors.
Google assigns a particular ad an expected click-through rate of “above average,” “average,” or “below average,” wherein above average and average indicate that there are no real concerns about the number of clicks an ad will get in the auction context.
If you can optimize your ad to get more clicks (this is a common goal), your ad’s rank should improve. Remember, Google is letting searchers vote with clicks to determine which ads are best for a particular query.
Landing Page Experience
Google is concerned about the sort of experience its searchers have with your ad. They don’t want folks to click on a good ad only to be lead to a poor page. An ad is only good, in Google’s view, if clicking on it leads to a page that helps that searcher accomplish something.
A good landing page, according to Varian and Google generally, should:
- Offer relevant and original content that helps a searcher easily complete a task, such as buying your product;
- Be easy to navigate so that a searcher on any sort of device can find links or buttons and use them;
- Foster transparency and trustworthiness by making it easy to find privacy policies or contact links, as examples;
- Be fast loading so you’re not wasting the searcher’s time.
AdWords Ad Rank also considers how relevant an ad is to the query in view. Effectively, Ad Rank uses an algorithm to analyze the language in your ad and compare it to the query. The aim is to ensure that only helpful, useful ads are shown.
The ad relevance metric, again according to Varian, also prevents advertisers from simply buying keywords and running ads that don’t make sense in context.
To boost your ad’s rank, try to be specific and focused. For new advertisers, as an example, it might make sense to focus on specific products or brands rather than promoting your store more generally.
Advertising Extensions or Formats
Google AdWords also considers the impact of advertising extensions or formats when it ranks your ad. These are things like a call extension, a recent product review, or sitelinks.
Google understands that these extensions or formats give the user more information about your product or company and, therefore, may result in a better user experience.
For more on how ad extensions can boost an ad’s performance, see “Using Ad Extensions in AdWords, Bing Ads to Boost Performance,” a Practical Ecommerce article from contributor Robert Brady.
Reduced Advertising Cost, Improving Position
A good Ad Rank could have a couple of important effects on your AdWords’ success. First, Ad Rank determines ad position. For any given auction — remember, Ad Rank is calculated at the instant a search is conducted — the ad with the best rank gets the first position.
In his presentation, Varian described how Ad Rank, which includes the value of the amount bid, changes ad position and cost.
In this table, a hypothetical ad from “Frank” will be placed in the first position because that ad has the highest Ad Rank, taking into consideration the amount bid; the ad quality, which is the sum, if you will, of the Ad Rank factors described above; and the impact of formats and extensions. Notice that Frank also pays less than he bid and less than “Juan” to hold the top position.
|Adv.||Bid||Quality||Format Impact||Ad Rank||Cost|
Ad Rank affects where your ad appears on a Google search results page and how much you have to pay per click to hold that position. Ad Rank, therefore, can have a power impact on your PPC success.