Brenton Chin's Blog

I wanted to do a posting on Google AdWords just because I know it’s a tricky topic that can get quite confusing for digital marketers. My understanding of it was pretty limited, so I did some research on it, and it turns out it’s not as daunting as I originally thought.

So, the key to how Google AdWords works is the “Quality Score”. Depending on the keywords in your advertisement, Google generates the Quality Score to indicate how well an ad relates to what a person is searching for, and how likely they are to click on the ad.

When some one does a search on Google, an AdWords auction is created where every advertiser whose keyword matches the search query will “compete in the auction. The advertiser that wins this auction will be the one who is granted the spot.

It actually all comes down to a very simple formula. The Ad Rank is determined by two metrics: the “quality score” (as discussed above), and the advertiser’s “bid” amount (the maximum amount they are willing to pay)

Ad Rank = Quality Score * Bid

Th ads are placed in order based on Ad Rank. The highest Ad Rank gets the top spot and so on down to either the last ad qualifying for the auction or the last position on the page.

$$ = Ad Rank to beat / Quality Score + $0.01.

Using the above formula, the amount that the winning bidder has to pay for their click is calculated. The winning bid will always pay 0.01 cent more than the ad that they have beaten.

Make sense? It’s may be slightly difficult to learn through words, but if you head on over to https://www.google.com/adwords/ or watch the simple video above, you can try it for yourself! My group member who was in charge of Google AdWords for our client project told me it’s all about practice, practice, practice…