Google Ads auction interpretation: what affects your click price?
When we search on Google, Google Ads conducts a quick auction of all ads to determine which ads appear in the search results and where they are located. To determine whether ads are eligible to appear in Google search results, and where they should rank, Google uses a value called Ad Rank. If an ad does not meet the rating threshold, it will not be shown in this search. Of course, the ad rank also determines the CPC that the advertiser needs to pay for the ad click.
How Google Ads auction ads work
When a user conducts a search, Google Ads conducts a quick auction for the keyword and all ads related to it. Bidding is used to determine which ads can be shown, their ranking, and how much advertisers have to pay. In Google Ads, advertisers can customize what keywords they want to target, as well as set a maximum cost-per-click bid. After a user searches, the Google Ads bidding system starts working. For each user search, Google Ads will find all ads related to the keyword; the system will automatically ignore those ads that are not related to the search term or that have not yet passed the review; rank the ads that meet the criteria, and the ranking is based on keyword bids , the quality of the advertisement itself, the relevance of the search term itself and other core dimensions; the winning advertisement in the above three links will appear in the search results. Google's search results are also constantly changing, and each Google search results page now displays three ad slots above the organic search results and three below the search results.
What is Google Ads Ad Rank?
In simple terms, ad ranking is the process of ranking all ads related to search keywords according to certain criteria. The first ranking result will be displayed on the first ad slot, and so on. Ad rank = keyword bid * ad quality score + other factors (almost all the paid bidding ads we have seen have a similar ranking calculation principle) * From this ranking calculation formula, it can be seen that the higher the bid, the higher the ranking. First of all, all those who put or plan to put auction ads must remember this sentence deeply. For example, under the same bid, if your ad has a high quality score, it will rank above your competitors. Even in many cases, because the quality score is high enough, even if the bid is not as high as that of the opponent, the ranking is also above him. Bidding is a very stupid way to place bids, and it wastes a lot of advertising budget. According to Google's data, the average click-through rate of Google Ads ads is 3.17%, but the actual situation may vary greatly. The click-through rate of the first-ranked ad is often higher than 6%.
What is CPC in Google Ads?
The concept of CPC exists in many advertisements, which means that you pay for each click of the user, but it should be noted that the actual CPC consumption is not equal to the keyword bid you set in the advertising background. In the advertising background, you can set the highest acceptable bid for each keyword. This bid can be for a certain keyword, or it can take effect at the level of a certain ad group. Maximum CPC is the highest amount you are willing to pay for an ad; Actual CPC is the actual cost you pay for this click after each user clicks, which may be higher or lower than the keyword bid you set; CPC It is the average amount you pay for advertising; of course, there are many forms of paid advertising now, Google Ads is a typical pay-per-click advertising, and there are also pay-per-impression advertising.
How does Ad Rank affect actual CPC?
Google does not have an official document that clearly states its calculation method and the specific factors related to the impact, but according to a large number of data and side documents, it is basically calculated according to the following formula. CPC = Ad Rank of the advertiser below you/your Quality Score + USD 0.01 Simple understanding, for example, in this auction, your Ad Quality Score is 8, the first and second advertiser's Ad Ad Rank is 20, then the actual cost you pay for this click should be 20/8 + 0.01, which is $2.51.
How is Quality Score affected?
Although, like the seo algorithm, Google will not disclose the complete algorithm rules, but we can still verify through many side data. There are three factors that affect the quality score of Google Ads: 1. Expected click rate Expected click rate is the prediction of click rate after the advertisement is displayed in the search results. This data comes from the user's historical click-through rate. Through the prediction of this dimension, Google can judge which advertisements are more in line with the user's search needs. 2. The page user experience is the same as the SEO ranking rules. Even if it is a paid advertisement, Google does not want to provide users with pages with poor experience. 3. Relevance between advertisements and search terms Google will measure the relevance between advertisements and user search terms to ensure that each display is the most useful advertisement for users, and prevent irrelevant advertisements from affecting users' search experience. In simple terms, these three large dimensions will measure each ad, giving an above-average, average or below-average rating. Of course, in addition to the above three factors, Google will also consider other factors, such as the type of device the user is using, the location of the user, the timing of the advertisement, and so on.
How to check my Google Ads Quality Score
Log in to your Google Ads account, select Keywords from the menu on the left, click the column in the upper right corner of the cousin, click Modify Keyword Column, scroll to the Quality Score section, and select the corresponding option. If there is a "-" in the quality score, it means that the keyword does not have enough exposure and clicks, and Google just gives an accurate score. Summary: Google Ads bidding is a kind of real-time bidding advertising, and it can be said that the cost of each bidding is dynamic. Therefore, optimizing the quality score of an account should be a continuous process, constantly adjusting and optimizing according to historical data, and at the same time adjusting the delivery strategy according to sales feedback, so as to make advertising play its due value instead of wasting budget.
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