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Overview of Google's Online Ads Auction

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Andrew Bull
Overview of Google's Online Ads Auction

Google Ads* seem so simple.

They certainly make it easy to set up a new campaign — especially with the new Adwords Express.

However, running straight in to a Google Adwords campaign without any knowledge has the impact as running in to a brick wall.

You get a loud bang and a whole lot of pain!

Top Tip: If you're going to run you own campaign on Adwords start with a very small budget, the amount that you can happily lose without losing sleep or breaking sweat.

So, what kind of knowledge do you need to start the right way with Google Ads.

Lots!

There are many different kinds of campaigns to run, and even full-time ads experts often don't know it all.

However, there's one topic that appears in all these campaign types.

The Advertising Auction.

Knowledge of the auction will help you:

  • Win the auction
  • Lower your CPC
  • Help you max out your precious advertising budget.

How the Auction Works

  1. A person enters a query into a Google Search Engine
  2. Google's servers find every Ad that matches that query.
  3. The auction controller throws away all the ineligble ads.
  4. The Quality Score of the remaining ads is calculated — think of this as the overall quality of a campaign.
  5. Quality Score X Max Bid (what an advertiser is willing to pay for a click) = Ad Rank
  6. The person with the best Ad Rank wins the auction and the top position on the page (Please note, finishing top is not always the best strategy).
  7. The price you pay for a click = (Ad Rank of person finishing below you / Your Quality Score ) + 0.01.

 

The full version of this article: Complete Guide: Google Advertising Auction.



*Google recently rebranded Google Adwords, Google Ads.

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