MARKETING
Understanding the Google Ads Auction & Why Ad Rank Is Important
The author’s views are entirely his or her own (excluding the unlikely event of hypnosis) and may not always reflect the views of Moz.
There are 3.5 billion searches on Google every day, and 84% of people use Google at least three times per day to search for information.
When there is a search query on Google, Google Ads runs a quick auction to determine which ads will show for that search query, and what the ad positions should be. This ad auction is repeated every time an ad is eligible to appear for a search term out of the billions searched each day.
To determine if an ad is eligible to be shown in the Google search results, and what the position of the ad will be, Google uses a value called Ad Rank. If an ad does not meet the Ad Rank thresholds, it will not be shown. Ad Rank also determines the CPC (cost per click) that the advertiser pays for a click on their ad.
In this post, I cover the main factors that are used by Google to determine the Ad Rank of an ad during the auction, and what those factors mean for your ad strategy.
Understanding the Google Ads auction
How the Google Ads auction works
When a user makes a search query, Google Ads runs a split-second auction of all the ads whose keywords are relevant to it. This will determine which ads are eligible to be shown, their ad position relative to competing ads, and the CPC that the advertiser will pay for a click on their ad.
When setting up Google Ads pay per click (PPC) marketing campaigns, advertisers identify which keywords they want to bid on and set their max CPC bid. The advertiser also sets up ad groups with keywords and creates related ads.
When there is a search query, the Google Ads auction begins. Here is the auction process according to Google:
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For every search query, Google Ads finds all the ads whose keywords are relevant to the search terms.
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The system ignores ads that are not eligible for that location and any disapproved ads.
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The remaining ads will be evaluated based on their Ad Rank. The Ad Rank is based on the max CPC bid, ad quality, Ad Rank thresholds, search context and the ad extensions and formats used.
The eligible ads that won the auction are shown on the SERP based on their Ad Rank.
The layout of the Google search results page changes constantly. Currently, Google shows three ads above the organic search results and three ads below the search results on each search page. Depending on the popularity of the search term, and the number of qualified ads, ads may be shown on multiple search pages for the search term.
Here is an example of a search for “eye doctors Dallas” that shows three eligible Google Ads above the organic search results:
What is Ad Rank?
The ad with the highest Ad Rank will be shown in the top position of the search results page for a relevant search term. This is followed by the ad with the second highest Ad Rank and so on. Ads that do not meet the Ad Rank eligibility requirements will not be shown on Google.
Ad Rank calculation
Ad Rank = Max CPC Bid x Quality Score plus additional factors like the impact of ad extensions and ad formats, Ad Rank thresholds, search context, and competitiveness of auction.
Thus, spending more does not necessarily guarantee you the best Ad Rank. Here is an example of basic Ad Rank calculations for four advertisers competing for ad positions in the Google Search Results:
As seen in the example, Advertiser 1 had a lower max CPC bid than the other three advertisers, but was able to qualify for the top ad position because their quality score was high. Advertiser 4, in contrast, had the highest max CPC bid but the lowest quality score, and ended up in the lowest ad position.
Why should you care about your Ad Rank?
Google sets minimum Ad Rank thresholds that will determine if an ad is shown at all on Google.
In the example in Figure 2 above, there are four advertisers competing for an auction with Ad Ranks of 24, 20, 12, 8. If the minimum Ad Rank to show above the organic search results is 20, only Advertisers 1 and 2 will show above the search results. If the minimum Ad Rank to show below the search results is 10, only advertiser 3 will show below the search results. Advertiser 4 will not meet the minimum Ad Rank thresholds, and their ads will not be shown on Google at all.
Advertisers compete to have their ad shown in the top-most position on the SERP since that leads to a higher clickthrough rate (CTR) and results in more leads. Ad CTR changes considerably depending on your ad position.
The average CTR across all ads on Google Ads is 3.17% in search. But that CTR ranges considerably depending on industry and position, with a “good” CTR for position 1 being 6% or higher.
Even those minor differences in percentage can equate to thousands of clicks more for higher-ranked ads.
With that in mind, let’s dig into the two main factors determining your Ad Rank a bit more.
What is CPC?
Cost per click (CPC) is the price you pay per click on your ads in your pay-per-click (PPC) marketing campaigns.
When you set up a Google Ads PPC campaign, you set the max CPC bid for the keywords in your account. The max CPC bid can be set up at the keyword level or at the ad group level:
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The maximum CPC is the maximum amount that you’re willing to pay for a click on your ads.
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The actual CPC is the final amount you’re charged for a click on your ad. Your Actual CPC is determined at the time of the auction and may be less than the max CPC amount.
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The average CPC is the average amount you’re charged for a click on your ads.
While CPC costs can vary depending on your industry, the average CPC in Google Ads is $2.69 for search and $0.63 for display.
CPC pricing is also called PPC or pay-per-click. Hence, Google Ads is called PPC or pay-per-click advertising.
How Ad Rank affects actual CPC
Ad Rank also affects the actual CPC you pay for a click on your ads.
Google Ads uses a second-price auction system. The actual CPC you pay is calculated at the time of auction based on your Quality Score and the Ad Rank of the advertiser below you, plus $0.01. Because the auction is dynamic, the actual CPC can vary with each auction.
Google does not disclose the details of how they calculate the Average CPC for Google Ads. According to Search Engine Land, the Actual CPC you pay for a click on your ad is determined at the time of the auction by the following formula:
Actual CPC = (Ad rank of Advertiser below/Your Quality score) + $0.01
What is Quality Score?
The Quality Score is a diagnostic tool that is used to estimate the overall quality of your ad compared to other advertisers.
Ads and landing pages that are considered more relevant and useful to the search query get a higher Quality Score. This helps to ensure that more useful ads are shown at a higher position on the SERP.
Quality Score is measured on a scale of 1-10, and is available for every keyword. It is based on historical impressions for exact searches of your keyword.
Three factors that determine Quality Score
Quality Score is calculated based on the performance of three main factors:
Expected CTR
The expected CTR is a prediction of the ad clickthrough rate when the ad is shown on Google. Expected CTR projections are based on user CTR, which helps to decide which ads will perform best when shown for a search query.
CTR is the number of clicks your ad receives divided by the number of times your ad is shown: CTR=clicks/impressions.
Landing page experience
The landing page experience measures how relevant and useful your website landing page is to the person who clicked on the ad.
Ad Relevance
Ad relevance measures how well your ad matches the user’s search intent. It ensures that only the most useful ads are shown for every search query, and prevents ads that are unrelated to the product or service from being shown for a search query.
Each of the three Quality Score factors is given a rating of “Above Average”, “Average” or “Below Average”.
In addition to the three factors above, Google considers additional factors during the real-time auction such as the type of device used, location of the user, time of day, impact of ad extensions, and more.
How to check your Quality Score in Google Ads
Google Ads provides four Quality Score status columns at the keyword level to check Quality Score:
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Quality score
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Landing page experience
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Expected CTR
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Ad relevance
To check your Quality Score in your Google Ads account:
1. Log in to your Google Ads account
2. Click on “Keywords” in the left menu
3. Click on the “Columns” icon in the upper right corner of the table
4. Click on “Modify columns for keywords” and scroll to the Quality Score section. Add the following components to your table metrics (see Figure 4):
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Quality score
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Landing page experience
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Expected CTR
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Ad relevance
5. Click Apply
6. Once these columns are added, scroll to the right on each keyword in the table to check the Quality Score and its components (see Figure 5).
7. If there is a “-“ in the Quality score column, it means that there are not enough searches that exactly match your keywords to determine the Quality Score for that keyword.
For information on improving your Quality Score, read these tips from Google.
Conclusion
The Google Ads auction is a real-time auction that is triggered with every search on Google to determine which ads will be shown for that search term, and in what position. The Ad Rank and Quality Score of the ads are important factors in the ad auction and help to determine whether an ad is eligible to be shown on Google. By improving the individual components of Ad Rank and Quality Score, you can improve the eligibility and rank of your ads.
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MARKETING
YouTube Ad Specs, Sizes, and Examples [2024 Update]
Introduction
With billions of users each month, YouTube is the world’s second largest search engine and top website for video content. This makes it a great place for advertising. To succeed, advertisers need to follow the correct YouTube ad specifications. These rules help your ad reach more viewers, increasing the chance of gaining new customers and boosting brand awareness.
Types of YouTube Ads
Video Ads
- Description: These play before, during, or after a YouTube video on computers or mobile devices.
- Types:
- In-stream ads: Can be skippable or non-skippable.
- Bumper ads: Non-skippable, short ads that play before, during, or after a video.
Display Ads
- Description: These appear in different spots on YouTube and usually use text or static images.
- Note: YouTube does not support display image ads directly on its app, but these can be targeted to YouTube.com through Google Display Network (GDN).
Companion Banners
- Description: Appears to the right of the YouTube player on desktop.
- Requirement: Must be purchased alongside In-stream ads, Bumper ads, or In-feed ads.
In-feed Ads
- Description: Resemble videos with images, headlines, and text. They link to a public or unlisted YouTube video.
Outstream Ads
- Description: Mobile-only video ads that play outside of YouTube, on websites and apps within the Google video partner network.
Masthead Ads
- Description: Premium, high-visibility banner ads displayed at the top of the YouTube homepage for both desktop and mobile users.
YouTube Ad Specs by Type
Skippable In-stream Video Ads
- Placement: Before, during, or after a YouTube video.
- Resolution:
- Horizontal: 1920 x 1080px
- Vertical: 1080 x 1920px
- Square: 1080 x 1080px
- Aspect Ratio:
- Horizontal: 16:9
- Vertical: 9:16
- Square: 1:1
- Length:
- Awareness: 15-20 seconds
- Consideration: 2-3 minutes
- Action: 15-20 seconds
Non-skippable In-stream Video Ads
- Description: Must be watched completely before the main video.
- Length: 15 seconds (or 20 seconds in certain markets).
- Resolution:
- Horizontal: 1920 x 1080px
- Vertical: 1080 x 1920px
- Square: 1080 x 1080px
- Aspect Ratio:
- Horizontal: 16:9
- Vertical: 9:16
- Square: 1:1
Bumper Ads
- Length: Maximum 6 seconds.
- File Format: MP4, Quicktime, AVI, ASF, Windows Media, or MPEG.
- Resolution:
- Horizontal: 640 x 360px
- Vertical: 480 x 360px
In-feed Ads
- Description: Show alongside YouTube content, like search results or the Home feed.
- Resolution:
- Horizontal: 1920 x 1080px
- Vertical: 1080 x 1920px
- Square: 1080 x 1080px
- Aspect Ratio:
- Horizontal: 16:9
- Square: 1:1
- Length:
- Awareness: 15-20 seconds
- Consideration: 2-3 minutes
- Headline/Description:
- Headline: Up to 2 lines, 40 characters per line
- Description: Up to 2 lines, 35 characters per line
Display Ads
- Description: Static images or animated media that appear on YouTube next to video suggestions, in search results, or on the homepage.
- Image Size: 300×60 pixels.
- File Type: GIF, JPG, PNG.
- File Size: Max 150KB.
- Max Animation Length: 30 seconds.
Outstream Ads
- Description: Mobile-only video ads that appear on websites and apps within the Google video partner network, not on YouTube itself.
- Logo Specs:
- Square: 1:1 (200 x 200px).
- File Type: JPG, GIF, PNG.
- Max Size: 200KB.
Masthead Ads
- Description: High-visibility ads at the top of the YouTube homepage.
- Resolution: 1920 x 1080 or higher.
- File Type: JPG or PNG (without transparency).
Conclusion
YouTube offers a variety of ad formats to reach audiences effectively in 2024. Whether you want to build brand awareness, drive conversions, or target specific demographics, YouTube provides a dynamic platform for your advertising needs. Always follow Google’s advertising policies and the technical ad specs to ensure your ads perform their best. Ready to start using YouTube ads? Contact us today to get started!
MARKETING
Why We Are Always ‘Clicking to Buy’, According to Psychologists
Amazon pillows.
MARKETING
A deeper dive into data, personalization and Copilots
Salesforce launched a collection of new, generative AI-related products at Connections in Chicago this week. They included new Einstein Copilots for marketers and merchants and Einstein Personalization.
To better understand, not only the potential impact of the new products, but the evolving Salesforce architecture, we sat down with Bobby Jania, CMO, Marketing Cloud.
Dig deeper: Salesforce piles on the Einstein Copilots
Salesforce’s evolving architecture
It’s hard to deny that Salesforce likes coming up with new names for platforms and products (what happened to Customer 360?) and this can sometimes make the observer wonder if something is brand new, or old but with a brand new name. In particular, what exactly is Einstein 1 and how is it related to Salesforce Data Cloud?
“Data Cloud is built on the Einstein 1 platform,” Jania explained. “The Einstein 1 platform is our entire Salesforce platform and that includes products like Sales Cloud, Service Cloud — that it includes the original idea of Salesforce not just being in the cloud, but being multi-tenancy.”
Data Cloud — not an acquisition, of course — was built natively on that platform. It was the first product built on Hyperforce, Salesforce’s new cloud infrastructure architecture. “Since Data Cloud was on what we now call the Einstein 1 platform from Day One, it has always natively connected to, and been able to read anything in Sales Cloud, Service Cloud [and so on]. On top of that, we can now bring in, not only structured but unstructured data.”
That’s a significant progression from the position, several years ago, when Salesforce had stitched together a platform around various acquisitions (ExactTarget, for example) that didn’t necessarily talk to each other.
“At times, what we would do is have a kind of behind-the-scenes flow where data from one product could be moved into another product,” said Jania, “but in many of those cases the data would then be in both, whereas now the data is in Data Cloud. Tableau will run natively off Data Cloud; Commerce Cloud, Service Cloud, Marketing Cloud — they’re all going to the same operational customer profile.” They’re not copying the data from Data Cloud, Jania confirmed.
Another thing to know is tit’s possible for Salesforce customers to import their own datasets into Data Cloud. “We wanted to create a federated data model,” said Jania. “If you’re using Snowflake, for example, we more or less virtually sit on your data lake. The value we add is that we will look at all your data and help you form these operational customer profiles.”
Let’s learn more about Einstein Copilot
“Copilot means that I have an assistant with me in the tool where I need to be working that contextually knows what I am trying to do and helps me at every step of the process,” Jania said.
For marketers, this might begin with a campaign brief developed with Copilot’s assistance, the identification of an audience based on the brief, and then the development of email or other content. “What’s really cool is the idea of Einstein Studio where our customers will create actions [for Copilot] that we hadn’t even thought about.”
Here’s a key insight (back to nomenclature). We reported on Copilot for markets, Copilot for merchants, Copilot for shoppers. It turns out, however, that there is just one Copilot, Einstein Copilot, and these are use cases. “There’s just one Copilot, we just add these for a little clarity; we’re going to talk about marketing use cases, about shoppers’ use cases. These are actions for the marketing use cases we built out of the box; you can build your own.”
It’s surely going to take a little time for marketers to learn to work easily with Copilot. “There’s always time for adoption,” Jania agreed. “What is directly connected with this is, this is my ninth Connections and this one has the most hands-on training that I’ve seen since 2014 — and a lot of that is getting people using Data Cloud, using these tools rather than just being given a demo.”
What’s new about Einstein Personalization
Salesforce Einstein has been around since 2016 and many of the use cases seem to have involved personalization in various forms. What’s new?
“Einstein Personalization is a real-time decision engine and it’s going to choose next-best-action, next-best-offer. What is new is that it’s a service now that runs natively on top of Data Cloud.” A lot of real-time decision engines need their own set of data that might actually be a subset of data. “Einstein Personalization is going to look holistically at a customer and recommend a next-best-action that could be natively surfaced in Service Cloud, Sales Cloud or Marketing Cloud.”
Finally, trust
One feature of the presentations at Connections was the reassurance that, although public LLMs like ChatGPT could be selected for application to customer data, none of that data would be retained by the LLMs. Is this just a matter of written agreements? No, not just that, said Jania.
“In the Einstein Trust Layer, all of the data, when it connects to an LLM, runs through our gateway. If there was a prompt that had personally identifiable information — a credit card number, an email address — at a mimum, all that is stripped out. The LLMs do not store the output; we store the output for auditing back in Salesforce. Any output that comes back through our gateway is logged in our system; it runs through a toxicity model; and only at the end do we put PII data back into the answer. There are real pieces beyond a handshake that this data is safe.”
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