What Is Google Adwords? – How the Google Ads Auction Works

Google Ads are paid advertisements offered by Google which pop up in search results on google.com with the use of Google Adwords or advertisements that appear on other websites via the Display Network and Google’s AdSense program. Google ads are a very effective medium of driving relevant, qualified traffic to your website exactly when people are looking for the types of products or services your business offers.Google Adwords

Google also provides Display Ads, which are displayed on the Google Display Network. The Google Display Network is an extensive collection of outside, third-party websites that have partnered with Google and agreed to serve Google ads. Google ads on the Display Network come in text, image, video, or rich media format, and also differently targeted. This includes remarketing and banner ads.

The Adwords Auction

Adwords function on an auction system, which takes place every time a user performs a keyword search.

To “win” the Adwords auctions and see your Google advertisement pop up for relevant keywords, you will need to optimize your Quality Score and the bid amount. Thus, the higher your Quality Score, in conjunction with your bid amount, the better your ad positioning. Here are some of the factors, amongst others that affect your Quality Score:

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  • The importance of your Google ad to the search query.
  • The importance of the Google keyword to your ad group.
  • The importance of your ad to its landing page.
  • Historical click-through rate (CTR) of its ad group.
  • Overall historical account performance.

Other benefits also accrue from having a high-quality score:

  • Lower costs: Advertisers get rewarded with Google’s high-Quality Scores by lowering their cost per click (CPC), to help improve ROI.
  • Higher Exposure: With high-Quality Scores, your ads will get displayed more often, in better positions on the SERP – the top vs. the bottom of the page. This will enable you to get more clicks and conversions without having to raise your bids.

How Does Auction Work?

Immediately a query is made on Google, the search engine processes the request and runs the auction which will then determine an ad position and each advertiser’s CPC.

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How to Enter a Google Auction

Your Google ads are qualified to be entered into an auction whenever you are bidding on keywords that are important to the user’s search query. Your bids, Quality Score, and importance will come into play in determining if your ad qualifies to be displayed on the SERP.

What is Entered into a Google Auction?

Immediately advertisers identify keywords they desire to bid on, Google will then enter the keyword from your account that it feels is most relevant to the auction with the maximum bid you have specified and the associated ad.

How Much Does Google Ads Cost?

Google ads cost varies depending on several factors, including the competitiveness of your keywords and industry, your geographic location, the quality of your advertising campaigns, etc.

In the US, the average cost per click for Google search ads across all Industries is $2.32, while in other countries, the average costs for Google ads are often much lower.


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