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Tuesday, 5 November 2019

What is Ad Rank in Google Ads & How To Improve It

Ad Rank is one of the most important concepts in Google Ads, this concept is defined by Google, which determines how prominently your ads are shown on Google paid search results. Ad Rank affects many important factors of your campaign, so it is important to achieve higher Ad Rank.

So What is Ad Rank in Google Ads?

Ad Rank is the rank given by Google to an advertiser in the paid search results basis which the advertisers ad position is defined in Google SERP
Ad Rank determines the position of an advertiser while ranking in paid search results on Google. Ad Rank has high impact on the visibility of your ads in Google search.

Ad Rank Formula

Ad Rank = Bid x Quality Score
Bid 
Bid is the CPC amount with which you are participating in the auction
Quality Score 
Quality Score is the score given to a keyword between 0 to 10 basis following parameters
  1. Relevancy of Ad Copy
  2. Relevancy of Landing Page
  3. CTR
1. Relevancy of Ad Copy
Relevancy of Ad Copy means, the users search query should match the content of the ad copy. Eg: If someone is searching for “resorts in coorg”, the ad copy should also say “resorts in coorg”, or else the ad is irrelevant
2. Relevancy of Landing Page  
Relevancy of landing page means, the user sees an ad copy of “resorts in coorg”, so he should land on Coorg related page, if the user lands on any other page, then the landing page is irrelevant to the user
3. CTR
CTR is click through rate of the particular keyword for which we are considering relevancy of ad copy and relevancy of landing page.  
If all the above three parameters are in place, the quality score of the keyword will be high.
As we have now understood quality score, let’s now move back to Ad Rank. Let’s take an example with 5 advertisers and try to understand, how does Google calculates Ad Rank for each Advertiser.
In the below example, I have defined a bid for each advertiser and quality score for each advertiser with which they will participate in an auction (Note: you would be able to see bid and quality score for your keywords only)
What is Ad Rank in Google Ads
Now when the ad is shown on Google paid results, the position of their ads will be as below:
  • Advertiser E will rank at No 1 position
  • Advertiser D will rank at No 2 position
  • Advertiser A will rank at No 3 position
  • Advertiser B will rank at No 4 position
  • Advertiser C will rank at No 5 position
You can see that Advertiser C is bidding with higher amount but still ranking at no 5, this means that higher bid will not help you achieve higher position, what matters is the quality score achieved for your keywords when you participate in any auction.
Let’s now understand how much Advertiser E will have to pay if someone clicks on “E”.
CPC = Ad Rank of the Competitor Below You + $0.01
       Your Quality Score
Advertiser E’s CPC =       D’s Ad Rank        + $0.01
                          E’s Quality Score
Thus, E’s CPC = 455 + $0.01
                8
E’s CPC = $ 56.88
Similarly, CPC for D, A, B, C would be calculated

Why Ad Rank Matters?

Ad Rank helps to improve following metrics
CTR  You achieve higher Avg Position if your Ad Rank is high, this helps to improve the CTR for your ads, which drives more users to your landing page
Increase in Conversions – As you are driving more users to your landing page, the chances of conversion increase, which leads to a higher ROI
High Impression Share  When you achieve high Ad Rank, it helps to achieve higher impression share, which directly relates to increasing visibility on Google paid search for your keywords

Conclusion:

Ad Rank is one of the important metrics of Google Ads, the primary focus of any campaign should be to achieve higher Ad Rank which helps to increase in higher ROI. Lot of optimisations and experimentations are required in order to achieve higher Ad Rank which includes keywords, ad copy, landing pages etc

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