Google Ads or Google AdWords is a paid search platform, which means you pay Google to place your ads in front of people searching for things that you want them to see and click on.
Google Ads uses a keyword bidding system, where bidders attempt to rank higher above other advertisers on search results based on the keywords they bid for. This is why you may see extremely high bids sometimes on Google – it’s because they’re taking advantage of the keywords that you bid on. The most important factors that affect your cost:
Quality Score and Ad Rank are the two main components that determine how much you pay for an ad.
If you’re unfamiliar with Google AdWords, the first thing to understand is “Quality Score.” In Google’s own words: Quality Score is our measure of how well an ad’s landing page and keywords match the user’s search query and ad click-through behaviour. It enables us to accurately and efficiently deliver relevant ads. A higher Quality Score can help reduce your cost per click, improve your ad’s position on the page, and increase how many times you appear in search results for your keywords.
If you’re familiar with Google Analytics, it’s a close cousin of session duration – in the sense that a high-quality score means people are staying on your page for a longer time and they’re more likely to engage with your content (but that’s not a guarantee!).
The second component that determines how much you pay is “Ad Rank.” In Google’s own words: Ad Rank is a proportional representation of your quality score, ad relevance and expected clickthrough rate. We use the equation below to calculate your Ad Rank, which determines how high or low you rank in Google’s search results for a specific keyword.
The best way to think about it: If you bid $1 and your competitor bids $0.99, but they have a slightly higher quality score than you (which is also a subjective number), then Google will show your ad in a higher position and only charge you 0.01 cent for it – because the difference between both Ad Rank values is small.
In this blog post, we shed light on some of the factors that affect your cost with Google AdWords. If you’re considering hiring a Google Ads agency and using their service to promote your company or website, it’s important to understand how these three variables can impact what you pay for each click-through and conversion.