Pay-per-click is a model that most of the advertisers use to advertise their brands, products, and their business. Whether itís on search engine or social media advertisers need to pay every time when the user clicks on the ads. Pay-per-click ads are also known as search engine marketing
(SEM) Last year i.e. 2018 Google has done major changes, such as Adwords has changed into Google Ads with its new appearance and added with new campaigns, targeting, and other tools.
PPC has become increasingly sophisticated over the years, companies of every size spend billions of dollars every year on search advertising. There are different types of ads like text ads, video ads, image ads, display ads and much more, but keyword targeting is the foundation of search advertising. Advertiserís bids on the keywords where people likely use what people are searching for their business.There are many search engines and social media platforms that offer PPC campaigns, some of the most popular are like†
1. Google Ads
2. Bing Ads
4. Yahoo Gemini
No two ads performs are exactly alike, each has different style, formats, price,and placement of Ads. So this has became a massive advantage of advertiserís to gain potential customers. A PPC campaign may actually consists of different goals like Brand awareness, Leads, sales, Retargeting.
How do PPC ad auction works?
Search engines will not show ads for the all the quires, but when the quire is typed the auction begins. It considers 3 factors while calculating the CPC Bids
1. How much money an advertiser can pay if their ad is clicked
2. Quality Score
3. Ad Rank
The first factor how much an advertiser is willing to pay is important term. Advertisers can set maximum bid (Max CPC) at individual keyword level or at the ad group level (a grouping of related keywords).
We know that many people bid for the same keyword for top rankings, but here quality score plays a major role in what position the ad display in search results and how much an advertiser will pay for the ad. Google show an external Quality Score of 1 (bad) to 10 (excellent) at the keyword level in AdWords.
Google expects three things when calculating Quality Score:
1. click-through rate (CTR), which is calculated by when a user will click on an ad.
2. Ad relevance to the query. The ad copy should clearly relate to what the user is looking for.
3. Landing page experience. Checks whether the page is related to query and that does provide good experience.
Quality Score = 1 + Landing Page Experience weight + Ad Relevance weight + CTR weight
The weighting Google gives to each of the three factors:
- Landing page experience: 39%
- Expected CTR: 39%
- Ad Relevance: 22%
AdRank determines the in which position to be the ad is displayed in the SERP. If your ad is triggerd at position 2 then your ad rank is two The better the Ad Rank, the higher the position. The best Ad Rank gets the top ad position.
Ad Rank = Ad quality score x Max CPC†
How CPC Calculated?
Ad Rank has a big impact on the actual cost-per-click (CPC). CPC is calculated using this formula:
CPC = The Ad Rank of Advertiser Below/Quality Score + $0.01