You’re scrolling through the Google search results page doing the usual routine: looking for something that might catch your attention, reading top-ranking articles and learning what the newest trends are.
Then, you see these ads on the webpage. You start wondering how Google determines the order of how these ads would rank. How does it show you the best results that make searching a lot easier?
It knows exactly what you’re looking for like it can read your mind, which is fascinating and terrifying at the same time.
However, none of this is coincidental. Google Ads calculates a value called ad rank to decide a paid ad’s ranking on a SERP. And if you’re a digital marketer who wants to know how it is calculated and what you can do to improve your ranking, then you’ve come to the right place.
Let’s learn everything about ad rank, how to improve it without breaking the bank and why it matters in digital marketing.
What Is Ad Rank?
According to Google, ad rank is a value used to determine your ad position relative to other ads. It is the platform’s way of deciding the order of competing ads on the results page, and whether your ads are eligible to be shown.
For instance, if your ad shows up in the first position on Google’s search result page, your ad rank for that search is a first. Let’s take a look at this example:
As you can see, Filmora ranks higher than Canva in the ad positions for the search term ‘video editing software’. Meaning, the former has a better ad rank than the latter, giving Filmora better exposure and a higher clickthrough rate (CTR).
However, keep in mind that rankings can change without prior notice. Google recalculates your ad rank every time a search triggers your ad, so it’s possible that it’s not always on top. It will also depend on your current ad quality and the competitiveness of an auction, to name a few.
Simply put, every search is different. Let’s delve deeper into the factors that impact your ad rank.
How Is Ad Rank Calculated?
Before 2017, the calculation of ad rank was simple. It only involved your max CPC and the number of competitors depending on the search. This was the formula back then:
Ad Rank = Maximum Cost Per Click (CPC) Bid x Quality Score
Everything changed when Google Ads introduced changes like machine learning and thresholds. Things became more complex, establishing six factors such as:
Once you set your bid, you’re telling Google Ads how much money you’re willing to spend for every click on your ad. In the ad rank calculation, Google will likely prioritise an ad with a higher click per cost (CPC). But in some cases, it’s not the only factor.
Keep in mind that you’ll pay less than the maximum amount. For instance, if your maximum CPC is set to US$2 and the next highest bidder has a max CPC of US$1.60, you only have to pay US$1.61 in this auction.
Your bid is not permanent. You can always change it any time you like depending on your budget.
Context Of Search
Context matters, especially in ad auctions. When calculating your ad rank, Google checks the search terms a user enters, the type of device they’re using and their location at the time of the search, among others.
Competitiveness Of Auction
If two ads with similar ad ranks are competing for the same position, they have equal chances of winning that position. However, if the gap in ad rank between the two ads grows, the winner is the one that has a higher rank. They may also have to pay a higher CPC to ensure that they win.
Ad And Landing Page Quality
Google Ads evaluates the quality of your ads and the landing page it leads to once the ad is clicked. The more relevant and useful they are, the higher your quality score.
To check your quality score, you can visit your Google Ads account to know what you can improve on.
Ad Rank Threshold
To make sure that the ads are of quality, Google sets minimum thresholds that a paid ad should achieve to meet eligibility.
Expected Impact Of Ad Extensions And Other Formats
When creating an ad, you can include additional information like phone number, address and links to specific pages on your site. These are known as ad assets. Google looks at the assets and other ad formats you’ll use to determine the ad performance.
4 Effective Ways You Can Improve Your Ad Rank
Now that you’ve learned about the six factors affecting one’s ad rank, you may feel clueless about where to start. You might even wonder if you need to increase your ad budget just so you can get ahead of the cutthroat competition.
Fortunately, improving your ad rank doesn’t mean you have to break the bank. Although things can feel a bit tricky oftentimes, there are actionable strategies you can take advantage of. Check them out below:
Enhance Your Ad Relevance
Many digital marketers wrongly assume that since Google Ads is essentially an auction, you only have to bid higher to steal the top spot. However, this isn’t entirely true anymore.
Even if your bid is lower than your competitors, you can still outrank them if your ads are more relevant. What truly matters now is quality.
Although Google still looks at your ad’s expected CTR by evaluating your ad’s clicks and impressions, it also weighs up your ad’s relevance to a search. So, how do you exactly create better ad relevance?
First, you have to understand the user’s intent. Think about the buyer persona and what problems they want to solve. Does your ad give direct answers and solutions to their needs?
You can begin by auditing your ad copy and checking the keywords you’re currently bidding on. If your descriptions and headlines include terms that users are searching for, then you’re off to a great start.
Create A Better Landing Page
Aside from your ad, Google assesses the quality of your landing page. Sadly, this is often a forgotten factor when digital marketers talk about conversion rates.
You have to focus on the kind of experience the searcher will get if they ever click on your ad. Ask yourself: Is the page relevant, informative and easy to navigate? Remember, the user experience can either make or break the overall ranking of your ad, so tread carefully.
One of the best things you can do is take the user directly to the product your ad is talking about. Make sure that the ad copy is entirely connected to the message your landing page is trying to communicate.
Take a look at Canva’s ad:
If you click the ad, you can observe that the landing page serves as the perfect extension of their advertisement:
Here are other tips you need to consider when optimising the page:
- Did you know that about 40% of internet users abandon a page that takes more than three seconds to load? This is why you have to make sure the page load time is fast. You can check your page speed on Google PageSpeed Insights.
- Create a clear call to action.
- Consider the kind of devices your visitors might be using like smartphones, tablets, laptops and desktops.
Don’t Forget About Ad Extensions
In the process of setting up new Google ad campaigns, some people usually forget about ad extensions. Although they seem unimportant at first glance, they help boost your CTR which can result in a higher ad rank.
Bear in mind that these extensions provide additional information about your business that your ad cannot cover anymore. At the end of the day, you are still limited by word and character count.
These are the available ad extensions you can use:
- Lead form
- Structured snippet
Even if there are several options offered on your end, you are not required to add each one of them. This can lower your chances of ranking high, especially when you add extensions that don’t align with search terms.
So, which extensions do you have to include? Glad you asked!
We highly recommend that you establish your campaign goals first before creating ad extensions. For example, if you’re aiming for higher web traffic, you can add relevant site links within your website that can address a user’s problem.
But if your goal revolves around lead generation, adding a lead form extension to your ad might help. Whatever your objective is, you need ad extensions that perfectly match your call to action.
Check out this example from Filmora:
To make it easier for users to try their video editing software, they added an extension that will directly lead them to the Download page.
Use Negative Keywords
Using negative keywords in your ad campaigns allows you to exclude search terms and queries that are not related to your products. This will help you avoid paying for irrelevant clicks that won’t lead to conversions and sales.
Once you’ve determined your negative keywords, you can add them to your Google Ads campaign at an ad group level or at a campaign level.
Improving your ad rank doesn’t just revolve around bids and budgets. This is no longer about how much money you’re willing to burn to get that number one spot. Thanks to the evolution of Google Ads and its algorithm, lots of factors have now been introduced.
You have to improve the landing page experience, write a clear CTA on your ad copy and focus on a user’s search intent. So, even if you’re on a tight budget, you have a higher chance of outperforming your competitors.
When you know the ins and outs of paid search advertising, you can launch ad campaigns that will perform well. And if you’re ready to start and aim for a high ad rank, Roots Digital is here to help you optimise your PPC strategy. Check out our Google Ads Management Service now!
We’re always ready for a conversation—don’t hesitate to reach out.
What is the formula of ad rank?
Before Google Ads implemented changes in determining ad rankings, the formula for ad rank used to be simple:
Ad Rank = Maximum Cost Per Click (CPC) Bid x Quality Score
Now, there are six factors you need to consider:
– Your bid
– Context of search
– Competitiveness of auction
– The quality of the ad and landing page
– Ad rank threshold
– Expected impact of ad extensions and other ad formats
How do I get a higher ad rank?
To get a higher ad rank, here are some tips you may find useful:
1. Create better ad relevance.
2. Focus on the landing page experience.
3. Improve and choose the best ad extensions that align with your campaign goals.
4. Use negative keywords.
What are the three factors that influence ad quality?
The three factors that influence ad quality are ad relevance, landing page experience and expected clickthrough rate (CTR).