How Ad Rank is calculated in Google Ads? Ad Rank Formula

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Google Ads calculates Ad Rank for every ad in the auction. Ad Rank determines your ad position and whether your ads are eligible to be shown at all.
Therefore, the ad with the highest Ad Rank gets to be shown in the top position, and the ad with the second-highest Ad Rank gets to be shown in the second position, and so on.

The AdWords Ad Rank Formula

The ad rank calculation takes regard to the following aspects:

Bid

When you set your bid, you’re telling Google the maximum amount that you’re willing to pay for a click on your ad. Anyway, Google uses a special version of a second-price auction that occurs when there are several bids in competition: the advertiser doesn’t have to pay their full bid. They only have to pay 0.01$ more than the amount of the next-highest bidder. In other words, each competitor bid their true maximum willingness to pay for a click, but in the end, they only have to pay just enough to beat the competition.

Ad Rank threshold

To ensure the quality of the ad, Google sets a minimum quality thresholds that an ad must achieve to be shown in a particular ad position.

Context of query

With the ad auction, context matters. When calculating Ad Rank, Google look at the search terms that the person has entered, the person’s location, the time of the search, the type of device ( mobile or desktop), the nature of the search terms, other ads and search results that are shown on the page and other user signals and attributes.

Ad extensions impact

Google Ads estimates how extensions(phone number, links to other relevant pages of your site) and other ad formats that you use will impact your ad’s performance.

Auction-time ad quality

Google also looks at how relevant and useful your ad and the website that it links to are to the person who’ll see it.

The three main factors that determine the quality of an ad

Advertisers have to pay only when they receive a click on their ads.
Because Google wants to show the most relevant ads in a higher position, the auction is not only based on the biggest bid. There are several factors that determine the quality of an ad.

Expected click-through rate

Expected click-through rate (eCTR) predicts whether your keyword is likely to lead to an ad click. The Google prediction, it’s based on the history of millions of clicks, which helps Google to decide which ads are best for each search query.

Ad landing page experience

A highly relevant landing page for the user yields a higher score.
A relevant landing page should be easily navigable, to have original content, to be transparent about the nature of the business, etc

Ad Relevance

Ad Relevance is a measure of how well an ad matches what the user is searching for, and it helps to make sure that only useful ads are shown. It also prevents businesses from simply paying their way onto a search that’s unrelated to their product or service.

Keep in mind that during a real-time auction, are many additional factors (like the user’s device, the user’s location and the time of day) that are considered to determine the quality of an ad.

How Ad Rank influences actual cost per click

Higher-quality ads typically lead to lower costs and better ad positions. Anyway, the average cost per click (CPC) is not the price that you’re paying for each of your clicks. Because the system is dynamic, the CPC can vary a lot from auction to auction and depends on a variety of factors, such as the context of each query.

What is Quality Score?

Quality Score is an estimate of the quality of your ads, keywords and landing pages. Quality Score is composed of expected click-through rate, Ad Relevance, and landing page experience.
Your current Quality Score and its component scores can be seen in the Google Ads interface

How to improve the Ad Rank?

Use relevant ad extensions

You should use all of the relevant ad extensions because the expected impact of ad extensions is factored into Ad Rank.

Use at least three extensions for each campaign or ad group

At the time of each auction, your ad will be assembled with the most appealing extensions. More eligible extensions give your ads more opportunity to meet users’ specific needs.

Improve your click-through rate

How to improve your click-through rate?

  • Include keywords in your ad text
  • Experiment with different calls to action
  • Highlight benefits of your products
  • Create time or location-specific ad texts: Test seasonal creative around holidays or special events, or test location-optimised creative

Improve your landing page experience

How to improve your landing page experience?

  • Send traffic to the right landing page
  • Make your site transparent and trustworthy: make it easy for visitors to find your contact information, and clearly state what your business does
  • Improve website loading speed
  • The site must be optimized for mobile devices
  • Easy to navigate, menu links should not be very close
  • The website must follow a tree structure, grouped into categories, products, pages, etc

Improve your Ad Relevance

How to improve your ad relevance?

  • Add negative keywords: Prevent your ads from being shown on unwanted queries or queries that are not closely related to your products
  • Target the right region for your business by using only the relevant languages and locations
  • Include relevant search terms in your ad copy

Implement three to five ads per ad group

make sure you have a responsive search ad in the ad group.
Responsive search ads, increase ad group performance by attracting additional clicks and conversions that your existing text ads aren’t capturing.

About responsive search ads

A responsive ad is more relevant because you can add multiple headlines and description options, which give Google the possibility to show the most relevant combinations to your customers. That give your ads the opportunity to compete in more auctions and match more search terms.

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