What happens between the search and the page
Google’s page “The ad auction” describes the process in six numbered steps. In short, every time an ad could appear:
- Find the candidates. Google Ads gathers the ads whose keywords are a close enough match for what was searched.
- Drop the ineligible. Ads that can’t run for this search fall away: one aimed at another country, say, or one that has been disapproved.
- Apply the minimum. Any ad whose Ad Rank, which takes in things like its likely click-through rate and the experience its ad and page offer, doesn’t reach the bar is removed.
- Rank and show. The ads left are laid out on the page in Ad Rank order.
- Start over. The next search gets a fresh auction, and the result can differ with the search’s context and with whoever is competing at that moment.
Google sets this apart from the kind of auction where the top bid always takes the lot: here, money is one input among several.
One page, several auctions
A results page isn’t one prize. The spots at the top are filled by their own auction, separate from the auctions for spots further down. The same ad can’t take two places in one location, but it can appear in more than one location on the page.
Ad Rank is worked out twice in each auction: once to settle whether the ad may show at all, and again to place it among the ads that may. What goes into it: the bid, the quality of the ad and its landing page, the Ad Rank thresholds, how close the competition is, the context of the search, and the likely effect of ad assets and other formats.
An illustration: who shows, and who pays what
Google’s help pages explain the rules with simplified examples of their own. This one is ours: five made-up Ad Rank scores, with a made-up minimum of 35 for the spots above the results and 6 for the spots below. The rules applied are Google’s: an ad shows where it clears the minimum, and pays just enough to clear that minimum and stay ahead of the ad ranked directly below it.
| Ad Rank (example) | Where it shows | Charged just enough to |
|---|---|---|
| 70 | First above the results | Stay ahead of the 45 |
| 45 | Second above the results | Clear the minimum of 35, as no lower ad reaches the top |
| 25 | First below the results | Stay ahead of the 12 |
| 12 | Second below the results | Clear the minimum of 6 |
| 4 | Nowhere | Nothing: it misses the minimum |
An ad with nothing below it still pays something: the reserve price, which is the threshold rounded up to the next cent.
Why a top position can cost more with nobody close behind
The minimums aren’t fixed. Each auction sets its own, and Google names what pushes them up or down: weaker ads face a higher bar, higher spots on the page carry a higher bar, and the bar shifts with the searcher’s location and device and with the subject of the search.
On the Search Network the bar, and so the price per click, is usually higher above the results than below them, which means a top spot can cost more even when no rival sits directly underneath. In return, Google says, top ads tend to be clicked more often. So a weaker ad on a high bar can be dear even with the space below it empty.
The gap to the next ad counts as well. Two ads with near-equal scores have near-equal odds; a wide lead makes winning likelier but can raise the price paid for that surety. That is why ads several places down can still nudge what the leader pays.
The ceiling
A click can cost more than the max. CPC bid: Google says the actual CPC can go above it when, for example, enhanced CPC or a bid adjustment is switched on, or when automated bidding tools are in use.
What an advertiser can change
There are two levers, by Google’s account: the quality of the ad and its landing page, and the size of the bid, used alone or together.
Quality reaches further than order. It bears on whether an ad gets into the auction in the first place, on what each click ends up costing (better ads often pay less), and on whether extras such as sitelinks can show with the ad.
Google’s top and absolute top impression rate metrics show where ads have been landing on the page. Expect that place to move: with a new auction for every search, Google regards the movement as normal.
Bay 02 explains Quality Score, Google’s summary of ad quality.