How Does Google’s PPC Auction Process Work?

If you’re about to dive into the world of PPC, you may wonder how the bidding strategy and auction process works…

While not applicable to SEO, let’s review Google Ads and how the auction process works. Knowing this can help you optimise your PPC campaigns and make sure you appear at the top of the SERP (search engine results page) as much as possible.

Let’s take a look at the process step-by-step and how each of these links back to your Google Ads strategy. 

How does the Google Ads PPC auction process work?

Every time an ad is eligible to appear in response to a visitor’s search query, the auction process begins. The goal of this is to determine which ads will show and which order they appear on the SERP. 

Keyword

The first thing that happens in response to a search query is finding any keywords that match the query. This is why it’s so important to get your keyword lists right and to make them as relevant as possible to your product, service or offering.

Ads

Now the ads with the right keywords have been whittled down, Google then removes any that are disabled, have created a policy violation or that aren’t targeting that particular location, for example.

Ad rank

With this list of ads, Google will apply an ad rank to each. Your ad rank will vary for every search that takes place. Ad rank is composed of:

  • The context of the search
  • Your maximum bid (that doesn’t mean you’ll pay this amount every time!)
  • The quality score of your ad
  • The anticipated impact of any ad extensions and other ad formats.

Quality score is an important component of this which goes into a little more detail. The quality score of your ad is a number between 1-10 (where 1 is poor and 10 is excellent) to give you an idea of how good the quality of your ad is, compared to the competition. Some keywords may have an – in the quality score column, this just means there’s not enough data for this particular keyword yet.

A quality score will be assigned to each of your keywords. This is calculated using an (unknown!) combination of:

  • Expected click-through rate (based on previous ad performance)
  • Ad relevance (how relevant your ad is to the search query)
  • Landing page experience (how relevant your landing page is to your keyword).

While it’s important to have a decent bid for each keyword, you can outrank the competition by creating high-quality ads and using relevant keywords. So, it doesn’t matter too much if you’re going up against the biggest brands in the country. Put simply, if your ads are better, they’ll appear on the SERP at a lower CPC (cost per click).

Conclusion

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While there is plenty to consider throughout the auction process, there’s a few different data-points to keep an eye on when optimising your campaigns. Set a reasonable maximum bid, make sure the quality score of your keywords are as high as possible and keep your keywords, ad copy and keywords themed in the same ad group.

Want to know more about all things Google Ads? Speak to our digital marketing experts at Conteur.

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