PPC (Pay-per-click) is usually based on an auction-based system where companies bid for targeted users for clicks that bring them to a webpage, app, video or another asset – like a lead form. For this post, we’ll assume performance for Google Search Ads – the largest PPC and digital platform on the web today.
A Quick PPC Overview
How does Google Search Ads (PPC) work?
Google PPC works by allowing advertisers to bid on keywords that people search for and display a corresponding ad. This ad then sends users to an asset, page or app that the advertiser has created. The Ad and targeted keyword get entered into an “Auction” which occurs at each and every search where a targeted keyword is used. This can happen on Google, a search partner or on YouTube. It can also be extended to Display Advertising.
The Google Search Auction
When a user uses a targeted keyword or exact phrase, Google runs a bid auction amongst all of the advertisers bidding on that word
Criteria for entry to the Google Auction
Each entrant must meet the following criteria:
- The Ad is approved and enabled
- The targeted keywords have the right quality score
- The advertiser has sufficient budget left over to cover them for the next few hours or the expected number of searches before running out of budget
- The landing page is active and enabled
How Does the Google PPC auction work?
Google’s rough PPC Action Algorithm is based on Ad Rank. Ad Rank determines your position in the Google Ads displayed and the higher the rank, the higher your ad and thus click-through rate (CTR).
How is Ad Rank Calculated?
The Ad rank equation looks roughly like this:
Ad Rank = Max Bid X Quality Score
Ad Rank = $10 x 5/10QS = 50
In the example above, if 50 is the highest, then that Ad will rank 1st. Quality Score has a large impact on Ad Rank. For example, if an advertiser has a Quality Score of 10 and bids just $6 in the same auction, then their Ad Rank will be:
Ad Rank = $6 x 10/10 = 60
So, with a much lower bid, they will have a higher rank.
What impacts Quality Score?
Quality Score is impacted by the following
- Ad Relevance
- Landing Page
- Landing Page Relevance
- Landing Page Experience
- Keyword Targeting
- Keyword Relevance
- Keyword Group relationship
- Past Performance of related group keywords
- Click Through Rate
- Conversion Rates can significantly change the dynamics of Ad/Keyword performance
So, back to improving Ad PPC Performance
- Make sure your landing page experience is good
- Look for content, page speed, text, and call to actions
- Make sure your Ad and Landing pages match your keyword targeting
- Bid to win
- Don’t start with low bids
- Try to be as specific as possible
- Keep experimenting
For example, if you’re bidding on people searching for a Ford F150, don’t send them to a page about Mercedes with an ad for a Mercedes C200.
Bidding and low-Quality Score – what to watch out for
If you start with too low a bid and your ad places too low, your click-through rate could bring your quality score down before your campaign really gets started. Once a keyword has a low-quality score, its really hard to fix it. We’ll follow up on how to fix low quality scores as a separate PPC Strategy.