Time to read: 3 minutes

November 1, 2023

November 1, 2023

Google Ads, What is and how does it work? – Part 2

Time to read: 3 minutes

What is Google Ads?
Google Ads

Google Ads is a powerful pay-per-click (PPC) platform offered by Google that allows businesses to gain visibility across various Google properties.

Intro

In part one, we have explored the different types of Google Ads, let’s dive into how Google decides which ads to show on the SERP.

The Google Ads Auction 

Understanding the Google Ads Auction 

The Google Ads auction is the process through which Google determines which ads to display on the SERP for a given search query. When a user performs a search, Google checks if any advertisers are bidding on keywords relevant to that search. If there are, an auction is triggered, and the ads with the highest Ad Rank scores are displayed. 

The Ad Rank score is determined by multiplying the advertiser’s maximum bid by their Quality Score. The Quality Score is a measure of how relevant and useful Google deems an ad to be based on various factors, including ad relevance, keyword relevance, ad copy, and historical account performance. Advertisers with higher Quality Scores have a better chance of achieving higher ad rankings and lower costs per click (CPC). 

Factors Influencing Ad Placement 

Relevance to the Search Query

Ads that are highly relevant to the user’s search query have a higher chance of being displayed. Advertisers should ensure that their ad copy and keywords are closely aligned with the search intent to improve relevance. 

Quality Score

The Quality Score assigned to an ad is a crucial factor in ad placement. Advertisers should focus on optimizing their Quality Scores by improving ad relevance, keyword selection, and landing page experience.

Bid Amount

The bid amount set by the advertiser determines their maximum bid for ad placement. While bid amounts are influential, ads with lower bids can still achieve higher placements if they have higher Quality Scores.

Historical Account Performance

Google considers the historical performance of an advertiser’s account when determining ad placements. Advertisers with a strong track record of delivering quality ads and generating high click-through rates (CTRs) are more likely to achieve favorable ad placements.

Factors Affecting Google Ads Costs 

The cost of running Google Ads campaigns can vary depending on several factors: 

Competitiveness of Keywords

Highly competitive keywords with a high search volume tend to have higher costs per click (CPC) compared to less competitive or niche keywords. Advertisers should consider the competitiveness of their chosen keywords when planning their budgets.

Industry and Geographic Location

The industry in which a business operates, and its geographic location can affect the costs of Google Ads. Certain industries and locations may have higher competition, resulting in higher CPCs.

Quality Score

Advertisers with higher Quality Scores enjoy the benefit of lower CPCs. By optimizing ad relevance, keyword selection, and landing page experience, businesses can improve their Quality Scores and reduce costs.

Ad Performance

The performance of an ad campaign can influence costs. Google considers higher click-through rates (CTRs) and conversion rates more valuable, leading to lower CPCs.

Ad Budget

The budget allocated to a Google Ads campaign also affects costs. Advertisers with higher budgets can potentially reach a larger audience and secure more ad placements, but they may need to bid more competitively to achieve the desired results.

It is essential for businesses to carefully consider these factors and set realistic budgets to ensure cost-effective advertising campaigns. 

Conclusion

Google Ads is a powerful advertising platform that offers businesses the opportunity to reach their target audience effectively. By understanding how Google Ads works and optimizing campaigns based on factors such as relevance, Quality Score, and budgets, businesses can maximize the impact of their advertising efforts.