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What is Google AdWords Ad Rank and Why Does it Matter?

Ad rank is important to understand so you can get the most out of your Google Adwords advertising budget. If you properly understand the components of ad rank, you can get a lower cost per click which will result in a lower cost per conversion (lead, call or sale) which will give you a successful and long lasting AdWords Campaign.

What is Google Ad Rank?

Here is the definition directly from Google support:

“Ad position is the order in which your ad shows up on a page. For example, an ad position of “1” means that your ad is the first ad on a page. In general, it’s good to have your ad appear higher on a page because it’s likely that more customers will see your ad. Ads can appear on the top of a search results page, on the side of the page, or on the bottom of the page.”

Let’s explain how this works in plain English:

In  a vacuum, you want your ad to show up in the #1 position on Google. The number one spot on Google will receive a lion’s share of the clicks – you can assume that it will get between 20%-40% of all clicks on a page. That range can vary quite a bit depending on how many other ads are on the page (the fewer ads on the page the more clicks you will obviously get).  Keep in mind that the most important thing is for you to manage your budget cost effectively and still get a high volume of clicks. Showing up in the number 1 spot on the page isn’t necessarily always the right answer, but it is a key metric to monitor in your campaign.

Summary: It’s important to know your ad rank because it determines the position that your ad will show up on the Google search page. 

How is Google Ad Rank Calculated?

Here is a detailed breakdown of the ad rank calculation from Google:

“Ad position is determined by your Ad Rank in the auction. Your Ad Rank is a score that’s based on your bid, the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats.”

Let’s take a look at each of these metrics individually. Google uses a lot of jargon so let’s see if we can translate this so it’s easier to understand:

  • Bid – this is the maximum price you are willing to pay per click. You can set this amount per keyword to get a very granular amount of control over the keywords that are working better than others. Often it pays to start out a bit lower on long tail keyword and higher for generic keywords, but this is something to test as every account is different.
  • Quality Score – Your Google quality score is a combination of many different metrics (outlined above in that Google definition). A quality score is assigned to a keyword in a range of 1-10, with 10 being the best score and 1 being the lowest. If you get a quality score of 10, you can expect to pay less per click than a competitor that only received a quality score of 5 for the same keyword. Quality score is an important metric, but remember what you pay per conversion is still the end all number that will matter most for your business.
  • Expected clickthrough rate – Your ads expected cilckthrough rate is calculated based on the historical performance of both your ad, the URL you are using for advertising and your account. When Google makes this calculation it is using your expected clickthrough rate for a certain position relative to a competitor. For example if you are position 4, Google will not calculate your clickthrough rate and compare it to someone in position 1, it will use spot 4 to do the math.
  • Ad Relevance – It’s of paramount importance that your ad copy match up to what you are advertising for on your site. For example if you are selling natural fruit juice, make sure your ad copy talks about fruit juice. If you try and do a bait and switch and create ad copy for commercial insurance but then send a user to a page about natural fruit juices, Google will punish your ad relevance which will impact your quality score and then cause you to pay more per click relative to your competition.
  • Landing Page Experience – Using the natural fruit juice example, if your ad copy is about juices, then your landing page should have text about fruit juices, images, video and should be 100% relevant to someone looking to buy juice. The more relevant your landing page, the higher landing page score you get which will also help you get a sale (and that is the end goal).

Summary: Your bid price per click, your expected clickthrough rate, your ad copy relevance and your landing page are all important in determining how much you can expect to pay per click in Google AdWords. 

Why Does Google Ad Rank Matter?

Google AdWords is a competitive landscape and to get the most out of your AdWords campaign you need to make sure you understand all the finer points of how it works. As a company just getting into AdWords, there is a lot to learn and it’s not expected that you know all the intricate details right off the bat (that’s why we’re here to help if you need it!) Your bid price, your ad copy and your landing page all matter in making sure you get a good price per click, but most importantly these are the inputs that are going to get you more leads and sales!

Google AdWords is a dynamic marketplace and there are local and national companies jumping in to advertise daily on the keywords are you are bidding on. It’s a war out there and to be forewarned about how Google AdWords works is to be forearmed. If you want a free AdWords analysis, give us a call or send us an email, BTown Web can help!

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