This post will help you to understand how Google Adword’s auction process functions as a whole, so that you know exactly how your money is being implemented and what factors affect your total ad spend.
Understanding this process will enable you to make the right decisions later on when it comes to selecting the most appropriate bidding strategies.
Google Adwords and Auctioning
Whilst the auction process can appear overwhelming to begin with, it’s crucial to understand every element of how Google interprets the quality of your paid advertisement. As a result, this will allow your Ecommerce website to achieve strong click-through rates and conversions.
To put it simply, advertisers firstly identify which keywords they want to bid on, how much they want to spend, and group these keywords into specific ad groups.
As keywords are triggered one at a time, Google then selects which keywords from your account are most relevant to that query, using the cost-per-click you’ve specified and the associated ad to that keyword. Your cost-per-click budget (CPC) is essentially the maximum you are willing to spend on an ad.
Once you are entered into the auction, Google looks at two main factors to determine where your ad ranks: Cost-per-click and quality score.
Quality score is a metric to determine how relevant and useful your advertisement is to online users.
Essentially, the higher your quality score, the higher your ad ranks.
Google works this out using the following formula:
Ad rank = CPC bid x Quality Score.
The reason that ‘quality score’ is now implemented within the auction process itself is to ensure that every ad displayed is as relevant as possible for the online user.
Ultimately, this feature prevents PPC users from spending the highest amount possible simply to rank higher in search, regardless of whether their ad lacks quality information aligned to the user’s search query.
Take a look at the below example; this breaks down the auction process in a simple format to show how each advertiser has been positioned for their particular advertisement.
This example demonstrates that the highest position actually went to the advertiser with the lowest ad spend, reinforcing the importance of creating quality campaigns.
How to achieve a high quality score
When considering your quality score level, Google takes into consideration the following elements alongside the history of your Ecommerce site:
Ad relevancy – as touched upon in the last chapter, your ad copy MUST be closely tailored to your keywords and advertisement in order to make it as relevant as possible for the online user. In order to do this, ensure that the benefits of your product, a call-to-action and most importantly, your keywords are included within the text limit.
Landing page quality – There is no point spending valuable time on creating the perfect advertisement if your landing page is not optimised for conversions. As discussed, once your audience member has entered your Ecommerce site via a PPC ad, it is the job of your landing page to keep them there and ultimately, to get them to convert.
Extensions – include extensions that are most applicable to the goals you’re trying to achieve from your PPC campaign; this will make the online experience easier for the prospect and will ultimately increase the chance of conversions. These may include site links to give them more options on where to click, call extensions (especially for mobile ads), location extensions including map information, company address, phone number and company reviews.
When all of the above are implemented effectively, your quality score will improve for your particular keyword and advertisement.
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