August 14th, 2015 | By: Suzii Fido

Secrets of AdWords Ranking Revealed

You hear people talking about how important it is to run a Google AdWords campaign for ANY business that has a website, but knowing how to set it up correctly and stand a chance of getting it right, you need to understand how it works.

So here goes……….

Jackie wants to buy an eco friendly gift for her friend so she goes to Google and types

eco friendly xmas gifts search bar

At this point Google will trawl through all the paid ads that have been set up that include these keywords. Once it has done this it needs to rank the ads based on the following:

  • Your bid, which is how much you’re willing to spend
  • The quality of your ads and website
  • Expected impact from your ad extensions and other ad formats

Here are two examples of the ads that will be considered (in reality there would be hundreds or even thousands)

xmas gift e and n ad                                              dodgy present ad

Earth and Nature Ltd are willing to spend £2.00 per click and ALL keywords are present (highlighted in bold when they match the search). In fact their campaign has been set up to match as many search possibilities as they can within the title of the ad copy. Additional site links give further opportunities to see what else the website has to offer and the landing page directs visitors straight to the fabulous gift sets available. They have an overall quality score of 9/10 for this ad copy. What can I say ….a very well marketed advert with a high quality score put together for an amazing ecommerce site.

You guessed it, Earth and Nature Ltd is the sister company of Earth and Nature Solutions Ltd with hundreds of UK manufactured, cruelty free products that are suitable for Vegetarians/Vegans. Here is the link Guess where Jackie is going for her friend’s Xmas pressie. (OK unashamed advertising over now)

Dodgy Presents & Co are willing to spend £8.00 per click and match only two of the 4 keywords. In addition they send everyone to their very dodgy homepage, giving them a quality score of only 2/10

In most situations, you would think that the second ad would automatically get better placing as they are spending twice the budget, but in Google land this isn’t enough.

Let’s add Advertiser C with a Max bid of £2.00 and Quality Score of 6/10 & Advertiser D with a Max bid of £6.00 and Quality Score of 4/10 and the overall ranking would look like this:

Ad Ranking

For example £4.00 bid x 9/10 (4 x 9) gives a ranking of 36 and so on.

In this instance, the adverts would appear in the following order:-
Top Spot   (36)            Earth and Nature Ltd
2nd Place   (24)             Advertiser D
3rd Place   (16)             Dodgy Presents & Co
4th Place   (12)             Advertiser C

Actual Cost Per Click

Working out how much you ACTUALLY pay seems very complicated but it is, in fact, a very simple formula.

Google says you have to stay ahead of the person in the position below you and therefore calculates what you have to pay based on the ranking of the Ad directly below divided by your quality score and then adds $0.01. (in the example below we have set this at £0.01)

So the above businesses would pay as follows:

Actual CPC Cost

This shows how having a higher quality score can save you a lot of money and therefore highlights the importance of a well structured campaign. Earth and Nature Ltd is positioned top at a fraction of the cost that Dodgy Presents has paid confirming that throwing lots of money at a badly run campaign will only serve to eat your budget much more quickly.

So there you have it. The secrets of Google AdWords Ranking and Costs revealed.

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