How Google AdWords Ads Are Ranked
An ad's position is determined by a combination of its maximum cost-per-click (CPC) or price, and click through rate (CTR) or performance. This is known as an ad’s Ad Rank.
The algorithm weighs more heavily on click through rate than the average cost-per-click. So raising your maximum CPC has less effect than you think.
Site A’s maximum bid is $0.10 and has a 1% click-through rate, which produces an Ad Rank of 10 (10x1).
Site B’s maximum bid is $0.06 and has a 2% click-through rate, which produces an Ad Rank of 12 (6x2).
As a result, site B's ad will appear above site A's since it has a higher Ad Rank value, even though its maximum bid is less than site A’s.
This is Google's attempt to ensure that only the most relevant ads appear for a search term.
To improve your ad’s Ad Rank, either improve the cost-per-click or click through rate.
21 Google AdWords Optimization Tips
Here are 21 Google AdWords optimization tips that will increase your click through ratio and lower your cost per click:
- Divide your keywords into campaigns. Each campaign could refer to a specific product category or promotion. This will let you set different options for each campaign and obtain more accurate return on investment (ROI) data.
- Only target customers who speak your language. For example, if you website is only in English, then only target users who understand English.
- Only target countries where your customers are. If you find that the majority of your customers are from the U.S. and Canada, then only select those two countries for your ad to appear in. This is one advantage that Google AdWords has over Overture and allows for more targeted advertising.
- Enter as many targeted keyword phrases as possible. Don’t make assumptions on whether a keyword phrase will attract clicks.
- Include misspelled keyword phrases. I find they produce the highest click through ratios as they typically have little competition.
- Breakdown your keyword phrases into groups of similar keywords that can be targeted using the same titles. This will produce the higher click through rates and lower cost per click.
- Use “Exact” and “Phrase” match to improve your click through ratio and lower you cost per click.
[search engine optimization] – Exact match
”search engine optimization” – Phrase match
search engine optimization – Broad match
- Include negative keywords to avoid click throughs from people you don’t want to attract. For example, all software promoters should include keywords such as free, hack, crack, warez, etc., which are entered by people looking for free or hacked versions of the software.
- Minimize the use of “stop words” such as “in, on, at, from, and, etc.” in your ads. For more information on stop words, visit the What Are Stop Words? Section.
- Set your initial cost per click bid as high as you can afford. This will help to get as high a click through rate as possible. After you have achieved a reasonable click through ratio, you may lower your bid. The high click through rate will help you to achieve a higher position for your bid.
- Set a high enough bid to at least get your ad into the top 8 positions, or the first page. If possible try to bid for the top 2/3 positions to get your ads “above the fold” – visible content that does not require the user to scroll down the page. This will help you to maximum your click through ratio.
- For extremely popular and competitive keywords that cost far too much to the top positions, don’t be afraid to settle for low cost bids that give you rankings in the 40-50 range. They can and do attract click throughs.
- Enter a reasonable daily campaign budget. Make sure it is sufficient; otherwise your ads may not appear every time your keywords are searched.
- Uncheck the “content sites in Google's network” checkbox, if you do not want your ads to appear in content-targeted pages. People have reported that content-targeted ads generally attract a lower click through and ROI ratio. Please note that by choosing not to display your ads in the content sites in Google's ad network, your ads will not appear in the Google Directory and Google Groups, aside from other highly trafficked sites.
- Always include the main keyword phrase you’re targeting in the ad title. If the keyword phrase doesn’t fit onto one line, let it continue on the second line. When a user searches for the keyword phrase you’re targeting, it will be highlighted in bold and will help to draw attention to your ad.
- Always test 2 or more ads simultaneously. Google will automatically display more of the better performing ad. After a while, replace the lesser performing ad with a fresh one. Continue this process in your never-ending quest to improve your click through ratio and lower your cost per click.
- Test ad groups by pausing them to see what effects it has on your conversion ratio and return on investment. Add the ads back into the system by selecting the “Resume” option.
- Test ads by changing the title, description, and displayed URL. Also try changing just one word in an ad. You could be surprised by the results. I have had ads perform up to 30% better just by changing one word in the ad.
- Don’t be afraid to pause and delete ad groups and campaigns that are not producing a return on investment.
- I have seen Google AdWords ads appear in the 2 premium positions that are usually reserved for large advertisers. These positions typically produce higher click through ratios. So it can pay to bid for the top rankings.
- Optimize your return on investment by watching your average cost-per-click, not your maximum cost-per-click. Quite often you can drive more click throughs by setting a much higher maximum cost per click, yet keeping your average costper- click low.