Google Ads Auction: How Does it Work

Have you ever wondered why ads you see are the way they are?

How does one ad get more recognition than other ads?

How does google select these ads?

Google picks the ads in specific ways by holding Google Ads Auctions. These auctions are where companies can place bids to make sure that their ads are seen rather than someone else's, but it takes more than just money and bids to secure the top spot.

The ad auction considers 3 main factors when it comes to the winner: Bid amount, Quality score, and Ad extensions.

Bid Amount

The bid amount is the maximum amount of money that a company is willing to pay for a click on their ad. Companies always want to come in with the lowest bid amount they possibly can to rid themselves of any unnecessary expenses. For example, if a company has the competitive advantage on their quality score over other companies, then they can make a lower bid and still win the spot.

Quality Score

The quality score of a company site can simply be calculated by the relevance and usefulness of both the ads and the website it links to. There are 3 main factors in calculating a quality score: Expected CTR, ad relevance, and landing page experience. A companies CTR is a prediction of how often your ad will be clicked on when shown to consumers, based on googles historical performance for similar products. The ad relevance is determined by how relevant your site is to the ad you are trying to post. The landing page is the most important part of your website because it is the "first impression" to your consumers. It is always best to make sure your landing page is up to date and has relevant and original content that your consumers want to see. A higher quality score leads to lower costs and better ad position for your website.

Ad Extensions

A sites ad extensions are what the consumer will see on your site once it leaves the ad section. The ad extension rank is determined by how a consumer reacts to your site once they click on the ad. For example, company phone numbers or helpful links may add to the usefulness that a customer is looking for. This type of ad extension will give you a higher rank when looking for ad space.

It is always in a company's best interests to make sure that their site is being used to its full potential. When a company takes the time to improve their site then more and more consumers will be drawn to use it. This may also lead to your quality score being improved which would also improve the likelihood of being successful in googles virtual auction house.