Have you ever wondered how does Google Adwords rank OR’

Why Google puts some ads on top and others are not shown?

There are many people who are advertising their services or products but there are only two or three of them who are able to come up on the first page of the search. WHY?

Imagine, Google system works in the form of a crowd of people where everyone is bidding, calling out their prices to sell their services.

Now in such a situation how will you stand out?

Since Google works on an auction system whenever any advertiser bid the highest paying bidder has most likely chance to come on top.

The problem is for those who cannot pay more. Will they never get a chance to come up.

To resolve this Google made another metric which is quality score i.e Ad Rank system.

Ad Rank is determined by the Max CPC multiplied by Quality Score.

 

Maximum CPC: is the maximum amount an advertiser is willing to pay.

Quality Score: Is a number given by Google depending on many factors. These factors would be discussed further.

Google Ranking Range: This scale is between 1-10(low —-> high)

 

Why do we have a Quality Score?

One can ask this question as to what is the purpose of quality score and what is Google’s interest in putting such a metric.

Well QS is a way of balancing the interests of all parties in the online ecosystem.

• User can view all types of information as each time he refreshes his search query, Google evaluates a new quality score depending on the recent update of the site by the advertiser. This way User gets to know the latest information or products he is searching for.
• Advertiser focuses on improving the ads by putting up good and relevant ads. They work hard so as to reduce the cost. Paying less and improving the looks will cost them less budge.
• Google also has an advantage and more advertisers would come up to put their ads and users would get more relevant info. More people will be willing to pay and competing in the market. More users would come to Google for finding relevant information as their experience was good with Google.

All three parties have benefited from this Quality Score.

 

All three parties have interests. 

So what are the factors by which we can improve our Quality score and rank on top?

There are three very important factors for improving Quality score:

1. CTR( Click through Rate);

                    This means the more people clicking to my Ad more would be my click through Rate(CTR).

Here is an example, suppose I search for the keyword “shopping online”. 

The results that would be coming up are according to my geo-location.

Important Question: Why is there only one ad showing whereas there must be other advertisers who must have paid for the very same keyword. (We’ll answer this further. Keep on reading)

 

 

 

People are going to click on the first option, therefore, the click-through rate would be increased.

 

2. Relevance:

                   Google checks if a user finds a relevant ad to his search for example if a user is searching for a keyword like “shopping online” and you have created an ad which is not related to shopping then your ad is not going to show up ever because it is not relevant to the user search.

Keyword should be relevant with your ad copy and the landing page should also show the keyword.

More the relevancy more would be your quality score and chances would be more for your ad to appear on the first-page search. In other words, more the relevancy higher would be your quality score

3. Landing Page Experience:

                Google a very intelligent and therefore, it keeps track of your site’s visitors as for how long are they spending time on your site. There are also some sub-factors which help in improving Landing page Experience

• easy to load
• less load time
• more user-friendly
• easy to use
• less bounce rate

 

The above three Factors are helpful in increasing your Quality Score. But keep in mind there are some other factors too but mainly focussing on these three would be enough.

GOOGLE’s Paying Formula:

The formula which Google follow is Quality Score multiplied by the amount an advertiser pay.

If someone cannot afford to pay more he should work hard to increase his Quality Score so that when this is multiplied with a small amount of money it gives a higher result.

For Example:

Let us suppose there are two advertisers who are bidding on the same keyword.

–  If person 1 can only afford $2.00/ day(per day) for his Ad and gets a Quality Score of 5. Then 2 X 5 =10

Person 1’s Quality Score would be10.

While Person 2 is willing to pay $5.00 but his quality score is only 1. Then his ad Rank 5 X 1 = 5

His Quality score would be only 5.

This means Person 1 has more chances to come on top.

How does GOOGLE charge for any ad:

                  Every payer has the right to know how Google charges him for an ad. The formula is simple. Consider the following chart.

 

Suppose there three advertisers bidding on a keyword “mobile phone”. google gives Quality Score according to their performance of creating ad and Max CPC is given by the advertiser himself according to his budget. Rank is calculated by the old formula but how?

Now below is the chart with Rank calculated. How did we get these Ranks we’ll explain.

Ad Rank is calculated by multiplying QS with Max CPC. Ad positions are determined according to the score but how is Google cutting the price and charging?

Formula: 

Ad Rank = Max CPC X Quality Score. (Simple mathematical formula 😊)

Max CPC = AdRank / Quality Score.

Google takes Ad Rank of the second best to the advertiser divides it by Quality Score of advertiser then adds 0.01 to it.

Point to be noted: We are not able to know other’s Rank.

Actual CPC is always less than your Max CPC.

An advertiser may appear above a competitor and pay less. 

How do we find Max CPC?

With the help of some tools like Keyword Planner and others, we can know the CPC of any keyword.