How Does Google Rank Ads?
The mechanism that Google uses to rank ads that appear in the Search Results Page is called the Google Auction System.
As Google is the intermediary between users and advertisers, it needs to provide a good experience for users and a good value to advertisers at the same time.
When advertisers create an ad, they set the price they are willing to pay for that Ad. Take note that you only pay if that ad gets clicked on. This is the cost-per-click or CPC rate. If Google only ranks ads on the basis of their CPC, it would be like a normal auction where the winner is whoever bids the highest.
However, this would not be beneficial for either the business owner nor the user. In fact, it is not beneficial for Google either.
It is Google’s aim to display useful ads in a higher position. Therefore, it combines the price of the ad with a series of other quality elements. By combining all of these elements, Google calculates a score for your ad which is called Ad Rank. This score determines your position in the search results. Also beware that ads with an insufficient score do not appear at all.
Optimising these elements will make your Ads perform better. Let’s take a look at each of these elements.
The Click-Through-Rate or CTR is Google’s prediction of how often an Ad will be clicked on when it is shown. To calculate this prediction Google uses the enormous amount of data that it has on user behaviour.
To be more specific, the CTR refers to the number of clicks that your ad receives divided by the number of times your ad is shown. Thus: Clicks ÷ Impressions = CTR. For example, if you had 10 clicks and 100 impressions, then your CTR would be 10%.
The Google Ads Help page explains: “A high CTR is a good indication that users find your ads helpful and relevant. CTR also contributes to your keyword’s expected CTR, which is a component of Ad Rank. Note that a good CTR is relative to what you’re advertising and on which networks.”
An ad is only considered to be useful if its landing page helps users find what they are looking for. The more relevant your landing page is, the higher the score your ad will be given.
Some of the elements that make a landing page relevant are:
- Relevant content
- Easy navigation
- Transparency regarding your business
- Interaction with consumers
- Privacy guarantee
As the Google Ads Help page points out: “Your landing pages play a big part in turning clicks into customers. When someone clicks on your ad, they expect to land on a page that’s relevant to what they saw in your ad. If they don’t immediately find what they expect, they’re more likely to leave.” Bottom line: Make sure that your landing page matches your ad and keywords.
Google determines the relevance of an Ad by analysing the language used in the ad. It makes an assessment of how well it matches with what the user searched for. It all depends on how closely related your keywords are to your ads.
That said, the keywords that affect your ad’s relevance can either be Above Average, Average, or Below Average. You can rest easy with the first two designations, but the last one usually indicates that your ad or keyword isn’t specific enough. It could also be that your ad group may cover too many topics.
Or, as they are called in your Google Ads account: Ad Extensions. They serve multiple purposes:
- To make your Ad bigger.
- Give you additional space to highlight more information around your products/services.
- Increase your CTR, hence improving your campaign’s performance.
Just to mention a few, call-, location-, and sitelink extensions are among the most commonly used ones. However, we recommend to simply have a look into your Google Ads account and just use all the ones that are applicable to your business.
As you’ve seen the most important factors for ranking ads are:
- Click-Through Rate
- The Landing Page
- Ad Relevance
- Ad Format
Keep these in mind when getting ready to create your Google Ads. In the next part we will show you how to improve the performance of your ads. See you in part 6.