Search engine marketing is one of the most effective forms of digital advertising in terms of ROAS (return on ad spend). Paid search should be a part of every business strategy, from local businesses to the biggest global brands. And with over 100 billion searches per month, when we talk about paid search, we’re talking about Google.

Google’s advertising platform is one of the most advanced creations ever built by a human hand. Google indexes the majority of the web and connects people to information in a split second. During that split second Google also takes a look at its ad inventory and delivers ads. The golden opportunity of search is that people are looking for something, so an ad is provided as a viable option – not an interruption like a video ad on YouTube for example.

So the better you do with paid search, the more money your business is going to earn. And while the nuts and bolts are extremely complex, the basics of understanding how it works are rather simple.

The 3 Rs of Google Search

Before we get into ad rank, it’s important to know how Google structures its advertising business around 3 principles that are known as the three Rs.

  1. Reach – getting to the right people when it matters, engaging with new customers at their time of need
  2. Relevance – providing the right message that answers someone’s search
  3. Results – focusing on the outcomes and performance of campaigns in order to leverage data to improve campaigns over time

Google wants to provide the best possible ad results when someone searches. The best possible results means the highest chance of a click, which is how Google makes its money. But there is a serious focus on quality too. If people click on an ad and have a bad experience, they are less likely to click on another ad in the future. Google’s longterm strategy is to focus on quality (oftentimes forgoeing higher bids) to condition people to click on ads.

In order to create a qualitative approach to the ad experience, Google created Ad Rank, and Ad Rank is everything. It determines if your ad gets delivered, and what the position of your ad will be. This can make or break campaigns.

What Factors Contribute to Ad Rank?

Ad Rank is comprised of 5 factors that are put together to create the Quality Score. The Quality Score is the invisible metric that classifies ads into a ranking when a search is made. Here are the five factors:

  1. The bid – of course the bid is important, paying more for a click has a positive effect on whether your ad is delivered or not. But just having a higher bid or being willing to pay more is not a guarantee that you have a high score. (Google doesn’t say what low bidding does but I’m going to assume that you have to hit certain thresholds to make sure that your ad is considered for delivery).
  2. Impact of ad formats – Google’s advertising platform includes a large amount of formats (like Google shopping and Google display in addition to text search results) and extensions. Extensions are adding things like product reviews and phone numbers to ads. Google likes it when an ad becomes more effective and extensions make it easier for customers to connect to businesses on their terms.
  3. Expected click through rate – Google looks at your past campaign performance for a particular keyword to determine the expected click through rate or how many people will click out of everyone who sees it. Google wants the most clicks possible so it will favor what has worked better in the past.
  4. The landing page experience – Google cares a lot about where it sends people because, like I said above, if people click to a bad experience, they will be less likely to click in the future. Google looks at landing pages and looks at the experience. Does the landing page have relevant and original content? Is the message of the service or product clear? Is it easy to navigate?
  5. Ad relevance – this is a language analysis that determines how well the text in your ads matches what people are searching for. The better your keywords, the better the chance that it matches what people want.

For most purposes, marketers want to keep the cost down as much as possible in order to reach the maximum number of people, so the three things that can be controlled are the landing page experience, the ad relevance, and the ad formats. It’s relatively easy to add extension features onto your ad formats, so the hard work comes from optimizing your landing page and how well you execute a keyword strategy that can maximize ad relevance.


2 thoughts on “How Google Calculates Ad Rank

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.