One of the most common misconceptions about Paid Search is that the top positions only go to the top bidder. While Google’s paid search placements are done on an auction basis, rankings are determined on a more sophisticated and egalitarian basis, allowing a smart advertiser to pay less and rank higher on Google. You can do this whether you are using an advertising agency or doing it yourself.
Google determines the ad ranking of paid search on 3 criteria, the bid amount, the Quality Score of the advertiser and the expected click-through rate. According to Google, Quality Score is based on ad relevance, expected clickthrough rate and landing page experience. It is Google’s attempt to make sure that a person finds exactly what they are looking for when they use the search engine.
Google looks at the keywords that the searcher typed into the query bar. They then look at the keywords you are bidding on, to see how closely they match. Next, they look at your ad, to see if the search, your keywords and ad are aligned. Finally, Google looks at the landing page to which your ad is directed, and determines whether this is a match as well. The closer each of these components comes to matching the search query, the higher the ad score (Scoring works on a 1 – 10 basis, with 10 being the highest) Expected Click-through rate is Google’s estimate on how likely it is your ad will be clicked. This is determined in part by past history.
With this information and your ad format (does your ad provide additional relevant information using the Google format) Google will calculate your ad rank. If a person bids $2 but has a higher ad rank than a person who bids $3, the $2 bid will win because Google feels it will be the better match for the search.
In the Google auction, you only pay as much as is needed to beat the person who is ranked just below you. If you bid $2 but had a much higher ad rank than the person with a $4 bid, you will only pay what is necessary to beat the person with the $4 bid. In theory, that could be even less than your maximum bid of $2! If the 2nd ranked bid is $4 and the third ranked bid is $3, the person in position 2 will only pay what is necessary to beat the person in position 3. Again, bid amount is only one component, as Google wants to show the most relevant ads in the highest positions.
Rank Higher On Google
In order to lower your costs carefully consider the keywords you are bidding on. Once you have the keywords, write ad headlines that contain the keywords. Similarly, write ad descriptions that also contain your keywords. Your landing page should again contain the keywords and all relevant information regarding the search. Just as in organic search content is of paramount importance. A well written landing page with good information that is easy to navigate and transparent as to the nature of your business is what Google likes.
Google has a simple philosophy, if they show a user exactly what they want to see, that user will have a good experience and return. That is how they became a media behemoth. So, give them what they want. Provide ads and landing pages that thoroughly answer questions people have about your business. Do that and you will pay less and rank higher in Google Ads.