Week 4 - MKTG 3349: Google Ads Auction

Today I will be discussing how the Google ads auction works and its benefits. How an ad shows up from search results is based off of a quality, relevance and bid price. The bid price is the maximum amount that an advertiser is willing to pay for ad clicks. This can be a huge factor for determining the order in which ads appear. Also, note that the bid price is not typically the true price paid as it is often less. One huge benefit of using this is that advertisers can modify their bid price at any time of their marketing plan. Below is a simplified table showing the main three factors in an auction and the expected outcomes.

Google ads closely examines relevance and overall functionality of the add to determine the quality of the ad. Advertisers can track this assessment in the quality score under the account. It is a great advantage to be able to access information like this as you are able to make decisions to help improve the impact and quality of your advertisement. Another aspect that Google ads assesses is the potential of extensions. For example, if an ad has an extension in smaller font towards the very bottom, then it will be less likely that the audience will notice the extension. Therefore, if the impact of an extension is projected to be low, advertisers will have a difficult time in achieving a better position in the ad auction.