Bidding and Ranking for Search Ads

In a previous article, we discussed how search adverts work and what the basics are. We also briefly mentioned that advertisers are charged for search ads on a per-click basis. In today’s article, we will talk all about bidding and ranking for search ads. We will discuss what the processes are, and how you can bid against competitors. 

It is important to know that every search advert you post will not have the same cost. The cost that you, as the advertiser, will need to pay will vary depending on a lot of different factors. Each click will be priced based on a bidding system.

Now, it is also important to know that each advertising platform has its own advanced bidding options. Each option is aimed to help you run your ad campaign better. 

You have the option to either bid for placing on the Search Engines Result Page, or you can choose to make a bid based on how much you are prepared to spend for each click. 

Not only that but also have the option to tailor your approach to bidding for ads during certain times of the day only. Most of the important aspects can be tailored based on your preference. 

Usually, search ads are run as a Vickrey auction model. This means that advertisers can choose to place their bids to appear based on certain criteria.

Whether or not the adverts are eligible to appear or appropriate depends on the advertising platform. The platform will also be the one to determine when the adverts should appear, and when they are appropriate to show. 

Once the advertisement is clicked on, you, the advertiser, will pay the platform. 

Your Role as The Advertiser

There are few major key roles for the advertiser in order for this to work. You and your team will create the copy for the ad, you will determine where the advert will land, so choose your landing page carefully. We shared some advice regarding this in our article titled “Targeting options”. 

Next, you and your team will need to select the keywords or keyphrases as well as the criteria for which you want a certain ad to appear. You can also designate the maximum cost per click that you are willing to spend for a click on your ad. The advertising platform will only operate within this budget. 

The Advertising Platform’s Role

Now, it is the platform’s role to check the ad for compliance with editorial guidelines. Search engines, especially Google, are strict with their guidelines and must be followed.  Failure to do so will increase the risk of demonetizing your website or decreasing your page rank and/or authority.

The platform will also choose where the advert will be shown. Most of the time, it will be on relevant search queries. The rank of the ad will also be determined by the platform based on the advertiser’s maximum bid. But the relevance of the ad will also be a factor. This includes the clickthrough rate of the ad, the keyword, the relevance of the landing page, and the ad copy.

You can decide your cost per click bid for your keywords on Google Adwords. You can also use this platform to set the budget for your campaign. In Adwords, you can run and manage multiple campaigns at once.

Keep in mind that Google and other platforms will only follow the budget you have set. Once it has reached the cap, your advert will stop running. This is very important so you don’t overspend on a campaign. 

If overspending is one of your concerns, you can choose to set up daily budgets at first. This will help you determine the success of the campaign without spending too much. The downside to this is that your adverts may not run as often as you would like them to.

Conversion and Clickthrough Rates

Now, let’s discuss the conversions and click-through rates for adverts. The internet and search engines have created their platforms to be an even playing field for all businesses. This is why they have different factors to ensure that every advertiser can get their fair share. Just because someone has the biggest budget, doesn’t necessarily mean they will get top ad listings.

A search engine’s algorithm is complex to make it even for everyone. They consider a lot of different factors such as the relevance to keywords, the relevance of the landing page, and more. 

According to research, top ads are almost always guaranteed to get the highest clickthrough rates or CTRs. The top listing is an advertiser’s goal. This also means that the competition for the top spot is as fierce as it gets. 

You’re competing with advertisers from all over the world, and the tougher the competition is, the higher the costs per clicks are. It won’t hurt your chances of getting the top spot if your advertisements have the following qualities:

High relevance to a user’s search query

High CTRs over time

Consistent performance

Competitive CPC bids 

Outbids other ads that have the same quality

Does More Click Mean More Earnings?

On paper, it does look like the more clicks you have the better. However, you need to remember that being on the top ad position may also mean you have to spend more for each click. 

And if you are on a limited budget for advertising, bidding a higher price might not always be the best idea. Naturally, this will mean that you have to occupy the lower ad position. But you can still get more clicks and potential customers on a budget. 

You need to consider what a user does after clicking on your ads. This is why it is crucial for you, as the advertiser to determine the goal of the campaign before you start running ads. When you have a goal, you can track how well your campaign is doing, and how many users follow through with that goal after clicking your ads. This is known as conversion. 

Cost Convertion

The cost per action or per each conversion is the sum of the campaign costs divided by the sum of conversions. By knowing these numbers, you can track how well a campaign is doing.

© Image credits to Ana Paula Lima