Thinking About Keywords for PPC Ads - How Google Determines Ad Position
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When thinking about what kinds of keywords you want to use for your search ads, it helps to know what criteria Google uses to decide where to place its ads. Google uses an equation that takes two factors into account: the maximum cost-per-click of the ad for the particular keyword and the keyword's quality score. The maximum cost-per-click is obvious, and the equation itself is actually pretty simple: your ad's rank equals the cost per click multiplied by the quality score.
It's the quality score that's complicated. Google explains that the overall quality score "considers the keyword's clickthrough rate (CTR) and the relevance of the keyword, your ad's text, and landing page." As far as your ad's ranking or actual position in the SERPs, important factors include your keyword's CTR, ad text relevance, and your keyword's relevance to a user's search query.
It's important to note that Google's ad ranking system is not based solely on price; relevance plays a strong role. So at least in that sense, you won't be "locked out" of the top position if you can't afford to pay top dollar. Of course, a high CPC helps -- but there are reasons you might not want to pay a lot of money (I'll get to that in just a bit). Given the factors that go into your quality score, you want to make sure your keywords and ad text are relevant, and you want to build a strong click through rate. This is no surprise; Google wants to maximize its income, and the best way to do that is by putting ads that perform well near the top. You can get a higher position than ads with a higher click through rate than yours, but you'll have to pay a lot more money to do that.
This really highlights the importance of making sure your ad, landing page, and products are truly relevant to your chosen keywords. Relevance is the more cost-effective strategy. As Parish explains, "It is never beneficial to pay top dollar to keep an ad in a high position for a keyword that isn't highly relevant." Those cologne and shaving product advertisers may not have looked at it that way, but frankly, by targeting "unique gift" as a keyword, they were wasting their money. It isn't so much that "unique gift is too broad of a keyword; it's that it isn't relevant enough.
Next: The Fine Tuning Process >>
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