Here’s how it works. Let’s say you own an online retail shop for women’s apparel. You’ve spent time analyzing the landing page that you want to send customers to who click on your ad. You determine there are 5 reoccurring keyword phrases on the page that really represent your brand (e.g., women’s fashion, 80s fashion, vintage women’s clothing, 90s fashion and women’s winter collection). These are the keywords you’ll bid on in the Google auction, where you’ll compete against similar industry competitors. You’ve decided that you’re willing to spend $2 per click.Google Ads will then use its algorithm (Ad Rank) to determine where your ads will appear or if they’ll even show at all.Ad Rank: Determines your ad’s position in the search results. Ad Rank is calculated by the following formula:

Ad Rank = Max Cost-Per-Click (CPC) Bid x Quality Score.

This calculation is based on your bid amount and the components of your Quality Score (expected click-through-rate, ad relevance, landing page experience and the expected impact of extensions and other ad formats).

Click-Through-Rate: A ratio showing how often people who see your ad end up clicking on it. If, for example, your ad was shown to 100 people and 4 of them clicked on it, your CTR would be 4%.

If you want to beat your competitors and improve the position of your ad on the results page, you might consider the following:

  • Increase your bid.
  • Improve the relevancy of your ads.
  • Improve the quality of your landing pages.
  • Optimize your landing pages for mobile devices

With Google Ads, there’s no need to blow your ad budget in one go. Instead, set up a daily budget that’s right for you and your business. For example, if you set a daily budget of $50, your ads will stop running on that day once your money runs out. Since you were willing to spend $2 per click, this means that after 25 clicks, your ad will stop running that day and start up the next day. And, it’s up to you to determine if you want your budget to be spread across the entire day (standard delivery) or capitalize on clicks at specific times of the day (accelerated delivery).

Daily Budget: The maximum amount of money you spend each day across your Google Ads campaigns. While you’re in charge of setting an average daily budget for each of your Google Ads campaigns, some days Google may charge you less or more, depending on the performance of your ad. At the end of the month, Google will never charge you more than the average days in the month times your daily budget.

Learn more about choosing the bid amount that’s right for your budget here.


Learn how Forged Media can help grow your brand here