How Google AdWords Assigns PPC Ranking

Bidding high enough on a keyword does not guarantee a high placement on a Google pay-per-click (PPC) search result. The bid price is one of many elements that are factored in when determining the display order of search results. This means simply having the budget to spend isn’t going to guarantee the traffic and/or visibility you’re seeking. When it comes to paid search engine ranking, it’s all about ad relevancy.

For those not familiar with Google AdWords, let me start with an introduction. As Google’s pay-per-click (PPC) online advertisement delivery system, AdWords is one of the premier search engine marketing tools available. A good Internet marketing strategy will consider not only organic search rankings through effective search engine optimization (SEO), but also an effective paid ranking component.

AdWords is based on an auction pricing system. So, the advertiser bids on a price point for a range of rankings for a particular keyword. For example, for the keyword “Arizona Vacation” the price range could be $0.45-$0.55 for placement on slots 1-2, $0.25-$0.45 for placement within 3-7, etc. Hence to be considered for the first two rankings you would have to bid at least $0.45 for that particular keyword. The story doesn’t end there, however.

In order to deliver the search user a better experience, Google has implemented a quality score. The quality score guards against irrelevant search results on keywords by evaluating the relevancy of the ad under consideration for a given keyword. The final ranking on a paid search is then the quality score times the bid price. (Ranking = Quality Score x Bid Price.)

Google does not disclose all that is involved in the calculation of the quality score, but it does state that consideration is given to the relevancy of the text in the advertisement and the click-through rate of the advertisement, as well as the relevancy of the landing page, etc. As you can see, the goal is to drive relevant ads for keywords for the best possible user experience. After all, a poor user experience will result in loss of credibility in the search engine. It is also beneficial for the advertiser, since this system helps to create relevant traffic.

The Google AdWords system then runs your advertisement with your desired position range as evenly as possible given your daily budget.

Tags: AdWords, Internet Marketing, Pay per click, Search engine optimization