How The Google Ads Auction Works in 2023

The Google Ads auction refers to the process that Google uses to determine which ads will appear on a search page and the order of the ads. The auction also determines whether or not any ads will show at all.

Each time an ad is eligible for search, it enters the auction that occurs when people search a keyword. The auction decides whether or not the ad actually shows and in which ad position it will show on the page.

The Google Ads Auction Explained

At the beginning of the auction, Google Ads finds all the eligible ads that meet the targeting criteria based on the keywords entered. Ads are only eligible if they meet the minimum Ad Rank threshold. Google Ads gives a grade to each advertisement that is eligible called Ad Rank.

Ad Rank is how Google Ads determines which ads should show up first and the order of the ads. When someone searches for a term or a phrase using the Google search engine, Google takes into account the Ad Rank of every advertisement that is eligible for the auction.

At the end of the auction, the ads will be ranked accordingly based on their Ad Rank.

Example of Ad Rank and The Auction

If someone searches for “Marketing Software” using Google, Google Ads will give a grade to each advertisement that is eligible for auction. If the scoring scale was 0-100, then it would look similar to the example below.

google ads auction rank

What Is Ad Rank?

Ad Rank is a value that Google gives to each ad that is entering an ad auction. It utilizes a variety of factors to essentially give a grade to each advertisement. Then, Google uses the grades to rank the advertisements during an auction. Your ads are graded every single time there is a keyword search where they are eligible to appear.

Ad Rank Factors

Here are the key factors in the ad auction that determine your real-time ad rank:

  1. Your Bid:
  2. Depending on the bid limit you set, you inform Google of the maximum amount that you are willing to pay for a click on your ad. If you are using Smart Bidding, then your bid should be optimized for each auction.

  3. Your Ad Quality at Auction:
  4. Google assesses how useful and relevant your ads and the website it connects to are to the users and your targeting. Google will determine the expected clickthrough rate, landing page experience, and the relevance of the ad to the keyword.

  5. Expected Impact of Ads and Assets:
  6. Google Ads wants to show the most relevant ads that bring users to a relevant landing page. If you are using relevant keyword targeting with your ads and your assets, then you can win an auction even if you don’t have the highest bid. Assets such as images, sitelinks, callouts, structured snippets, lead forms, calls, prices, and more will improve the quality of your ads.

  7. The Context of Your Ads:
  8. Since each search on Google comes from a unique user with a unique device in a unique location, your ads need to be relevant. Google will look at the searcher, their location, device, the time of the day, and other attributes to see if your ad is relevant to them.

In Summary

Advertisers can understand the nuances of Google Ads auction and accordingly plan to make their Ads rank higher. The most important factor is an organized and a relevant campaign for the keywords you are targeting. You need to ensure your advertisements are targeted towards the keywords being searched. In addition, your landing page should be relevant as well.

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