Before I had ever heard of Pay-Per-Click or Paid Search, I was completely unaware of how it was determined which ads or search results would appear on a page. Now, over four years later, I have a solid understanding of how search results are populated, ads are shown, how display ads follow me around, and so much more. It’s the wonderful world of Digital Marketing led by Google, Facebook, Bing, and so forth.
More than likely you have encountered a Google ad of some sort. Whether it be while you were “Googling” something, lost in an endless hole of YouTube Videos, or you saw an eye-catching image on the side of your favorite website, I can almost guarantee you have been graced with the presence of an ad. Today we are going to focus on exactly how Google determines which ad to serve on the SERP (search results page).
Before we begin, there are a few terms we should all get familiar with. I cheated and pulled the definitions from the “Ultimate Guide to Paid Search Acronyms & Terminology”. Many terms can be found in the article but a few important ones are listed below;
- Search Engine Results Page (SERP) –The listings a user sees in the search engines after typing in a search query. The results typically consist of a series of Organic listings and Paid or sponsored search ads.
- Ad Delivery – A setting that determines how quickly you want Google to use your budget each day: either spread throughout the day (standard) or more quickly (accelerated). This setting affects when during the day your ads are likely to show, especially if your campaigns are limited by budget.
- Ad Position –The order in which your ad appears on a page in relation to other paid ads. An ad position of “1” means that your ad is the first ad on a page.
- Ad Rank – Not to be confused with Ad Position, Ad Rank is a value that’s used to determine your ad position behind-the-scenes. This is calculated as the product of your bid and Quality Score.
- Ad Rotation – A preference that determines which ad in your ad group should show when you have multiple ads active. Rotation settings include Optimize and Rotate Indefinitely. Optimize uses Google’s machine learning to automatically choose the ad most likely to win the auction. Rotate Indefinitely will rotate your ads evenly across all auctions. This setting is important to check to ensure that you have a proper balance between testing of your messaging and performance of your account.
- Quality Score –A complex and partially hidden formula used by search engines that takes CTR and several other factors into account in order to decide whether your keywords are relevant to your ads and landing page. This is multiplied with your max CPC to calculate your Ad Rank to see what your ad position will be.
- Impression Share –Impression share (IS) is the number of impressions you’ve received divided by the estimated number of impressions you were eligible to receive. Eligibility is based on your current ads’ targeting settings, approval statuses, bids, and Quality Scores. Data is available at the campaign and ad group levels.
Google Ads Settings
Before an ad can ever make it on to the SERP, it has to be created within a Google ads account and the proper settings must be adjusted. In my opinion, this is the first touch point for Google to determine which ad will be served. Below are the key settings to determine if an ad is shown and the setting’s role in the auction.
- Budget: If you have budget, your ad can show, if not, it won’t. The biggest thing to remember here is that if your campaign is limited by budget, your ad will not show or have the chance to show in every auction.
- Ad Rotation: This specifically has to do with the ads within your own account to determine which ad will show in the auctions you win.
- Ad Delivery: This setting determines if Google will show your ads as quickly as possible, or if Google will be cautious and spread out the delivery of your ad throughout the day. In the new UI, it can be found under budget.
All ad settings help to determine how often your ads will show and play a role in the final auction. When adjusting the settings, more info regarding each setting can be found on the page.
Once all settings have been confirmed, your ad now has the chance to show but it’s not that easy. Several factors go into the final milliseconds prior to an ad populating on the SERP. Google uses an automated algorithm to determine your ad rank or the position that your ad will be in on the SERP. The algorithm (or formula, if you will) to determine ad rank includes the following factors;
- Bid: This is set in your Google Ads account and is basically the max amount you are willing to pay every time your ad is clicked on.
- Quality Score: This is the relevancy between your keywords and ad and your ad and landing page. Quality Score is a beast on its own and more information can be found here.
- The Search: This is literally the keywords included in the search, location of the user, and all of the physical factors regarding the user.
- Format: This includes the text in an ad, the extensions being used, etc.
From that point, all of those factors are combined to determine where an advertiser places next to their competitors. Unfortunately, while bid and other metrics are known, other factors like how exactly Quality Score is determined, where competitors rank, etc. make it nearly impossible to know ahead of an auction where you will place.
In short, those are the factors that go into how Google determines which ad to show. For more information, PPC Hero contains multiple articles that dive into individual factors and optimizations to boost your ad rank.