How does Google choose which ad to show?

Google Ads operates on a sophisticated auction system that balances the playing field, enabling businesses of all sizes to compete for ad space on the Search Engine Results Page (SERP). It's not just about who bids the most; Google's system is designed to ensure users see the most relevant and high-quality ads. Here's a breakdown of how Google selects ads to display on the SERP.

The Steps Google Takes to Choose Ads

The steps Google takes to choose ads are crucial as they reveal the inner workings of Google's ad auction system, enabling advertisers to understand how to optimize their ads for better placement on the Search Engine Results Page (SERP). These steps underscore the significance of ad quality and relevance in determining ad display positions and click costs. Through a deeper understanding of these steps, advertisers can formulate more effective ad strategies, improve return on investment, and establish closer connections with their target audience.

Step 1: Quality Score

Google evaluates each ad based on a Quality Score, which ranges from 1 to 10. This score is determined by three core components:

• Relevance: The ad's relevance to the searcher's intent is crucial. Google assesses how well the ad matches the user's query.
• Expected Click-Through Rate (CTR): Based on historical data, Google estimates how likely the ad is to be clicked when shown, relative to competitors.
• User Experience: The landing page's relevance to the ad and the overall user experience it provides are key factors. A high-quality, useful landing page will contribute to a better Quality Score.

Step 2: Ad Rank

Once the Quality Score is assigned, Google calculates the Ad Rank using the formula:

Ad Rank = Quality Score x Maximum Bid

The term "rank" here signifies the position relative to other ads, with a higher Ad Rank leading to better placement on the SERP. Ad Rank is dynamic and depends on the keyword's cost, competition, and the context of each search.

Step 3: Cost Per Click (CPC)

The final step involves determining the actual cost per click. Advertisers pay when their ad is clicked, but the amount isn't their maximum bid. Instead, it's calculated based on the Ad Rank of the advertiser below them, divided by their own Quality Score, plus one cent:

Your CPC = (Ad Rank of the advertiser below you / Your Quality Score) + $0.01

This formula ensures that advertisers with high-quality ads may pay less per click than those with lower Quality Scores, even if their maximum bid is higher. Google's aim is to reward the creation of ads that provide value to users, thus enhancing the search experience.

Common Queries Answered

As an expert in online advertising and education, it's essential to address common questions surrounding the functioning of Google Ads. Let's explore two common queries related to the Google Ads auction process.

Does the Google Ads Auction Run for Every Search?

The Google Ads auction doesn't trigger for every search. The decision to initiate the auction hinges on the search intent. For informational searches, such as "how to take care of a pet" or "how to start a pet adoption agency," the likelihood of ads appearing is low. However, for transactional and commercial intent keywords like "buy tennis rackets online," ads are more likely to be displayed.

How Do Match Types Work?

Google Ads offers three match types for targeting keywords:
1. Broad Match： With broad match, your ad may appear for any search that includes or is related to your specified keyword. This match type allows for a wider reach but requires careful monitoring to ensure relevance.

2. Phrase Match： When using phrase match, your ad may display for searches that include the meaning of your keyword. This provides a balance between reach and specificity, capturing related searches while maintaining relevance.

3. Exact Match： Exact match ensures that your ad may show only for searches that have the same meaning as your specified keyword. This match type offers the highest level of precision, targeting a specific audience likely to be interested in your offerings.

Conclusion

Google's auction system is designed to maximize the relevance of ads to users while allowing advertisers to achieve cost-effective results. By focusing on Quality Score and creating ads that resonate with their audience, advertisers can secure prominent positions on the SERP at a lower cost, leading to a higher return on investment (ROI).