Key concept: Bids and advertiser competition

The concept

As an advertiser, you'll name the top price you want to pay for a click on your ad, also known as your cost-per-click (CPC) bid. Every time an ad is shown to a customer on the web, our system considers all advertisers' bids, and runs an ad auction focused on two things:

  1. The best (most relevant) ads to show for the customer. We don't want to show an ad for chocolate if someone is searching for cheese! We look at the customer's intent (their search or the content of the page they're browsing) as well as the advertiser's targeting settings and ad content.
  2. Of the ads that meet the conditions outlined above, our system then evaluates all competing ads and bids and determines which ads to show in which position on the page.

Tip

Check out the the ad auction concept to learn more about how bidding works in the overall Google Ads universe.

Why it matters

This is where the amount of your bid comes in -- if your ad is eligible to show, the higher your bid, the higher your ad position is likely to be. However, even with a high bid, if your ad is less relevant, then it might appear lower on the page. The highest-quality ads tend to appear in the very top positions on the page. A high-quality ad may not actually have a high bid, but due to performance over time, the ad has performed so well that our system rewards it with a prominent position.

Ads in higher positions on the page -- particularly those in the top portion of a webpage before a customer needs to scroll down in her browser -- tend to generate more clicks which can lead to more traffic to your site and, potentially, conversions.

Note

We also can't show an ad for an advertiser who has maxed out his advertising budget for the day or whose ad has been disapproved for policy reasons.

How it's used

When you set up your campaigns and ad groups, you'll have the option to define an ad group-level bid. This is the default bid for all keywords in your ad group. When you select keywords and estimate traffic, keep an eye on the forecasted performance and traffic within our tools. You may want to adjust your bids for your overall ad group.

Beyond default ad group bids, you can also try the following:

  • Your ad group level bid is applied for both the Search and Display Networks by default, so you may want to try using a different ad group bid cap for each network.
  • Try keyword-specific bids, particularly for high-value keywords. These are the keywords that are popular, and for which you may need to compete more aggressively with your fellow advertisers if you want to appear in the top positions.
  • You may want to try cheaper keyword variations to show up for related keywords or placements that will get you similar traffic with lower costs, and hopefully higher positions on the page.
  • To help lower bid costs and improve your ad's chances of appearing in higher positions, you may want to focus on improving the quality of your ad content (text, URLs, thumbnails, images, videos), keywords, and website.  Learn more about improving your ad quality.
  • You can also try using Google Ads bid optimization tools, like automatic bidding, the bid simulator, or Conversion Optimizer.

For the best positions on the page and improved traffic (impressions, clicks, and conversions), you'll need to beat your competitors with quality, bid amounts, or a mixture of both.

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