As we have mentioned in previous posts from this section and series your Ad’s Rank is not solely determined by the CPC (cost per click) that you are willing to pay. There are many other components that come into play.
We separated this post within this series to make sure everyone understands the importance of the formula shown below. Take a look and understand the importance of optimizing your Quality Score and choosing Competitive CPC’s.
The Magic Google AdWords Ad Ranking Formula
Ad Rank equals your Max Cost Per Click (CPC) multiplied by your Quality Score. Bottom line here is that if you have a great Quality Score, you pay less per click then the next person. So it is very, very important to work on your Quality Score.
You can choose your Max CPC either at the Ad Group level (we will go over account structure and what an Ad Group is versus a Campaign) or at the Keyword level.
AdWords Ranking Formula Example
So here we go, we have an example of how the Google AdWords Ad Ranking formula works. We have Alison and Scott who both are willing to spend a $1.00 for their clicks and have a Quality Score of 8 and 10, respectively. Jon is willing to spend the most at $2.35 but has a low score coming in at just 3 out of 10. The way your Ad Rank is determined is by multiplying your Quality Score and your Max CPC.
So that gives Alison an ad rank of 8, Scott a 10 and Jon a 7.
Note:In this case, the higher your Ad Rank, the better position you will get when the ads are displayed.