Google Ads’ quality score is a bid multiplier that can make purchasing ads on the popular pay-per-click advertising platform less expensive. A high quality score is also a strong indicator of PPC success, so boosting an ad’s quality score could lead to more interactions and sales.
Google’s search engine is popular because it works. Those results might be a top organic link, a carousel, a local pack, or even an ad.
If the ads Google presents are relevant and useful, users won’t mind them and they might even like them. A happy user is also likely to keep coming back to Google for text or voice searches.
Similarly, advertisers are happy when their ads are presented to interested customers who click and buy. So Google wins when it can display the best possible ads for a given query.
Since the goal is to show the best ads, Google has to avoid the temptation to simply award the top ad spots to the highest bidder. To this end, the company employs a proprietary algorithm (or process) it calls Ad Rank.
With Google Ads’ auction format, advertisers place bids on keywords or groups of keywords. The ad auction employs a second-price model, meaning the highest bidding company doesn’t actually pay what it bids. It pays the next highest bid or just slightly more. Advertisers can feel safe bidding a true limit since the amount they actually pay will be adjusted down.
For example, if Amazon bids $5 for a keyword and Walmart bids $4 for the same keyword, Amazon would pay $4.01, which is just slightly more than the next highest bid.
Taking this a step further, the order in which advertisements are shown “isn’t based just on bids,” said Google chief economist Hal Varian in a 2014 presentation. “We want to show more useful ads in a higher position on the results page because users want to see…