Understanding the Google Ads Auction
Google Ads
February 1, 2023
Bryant Stephens

How Google Ads Auctions Work

Google Ads is an online advertising platform that allows businesses to display their advertisements to a wide audience. The platform operates through a complex auction system that determines which advertisements are displayed and where they are displayed on the web. Understanding how this auction system works is crucial for businesses to have successful advertising campaigns on Google Ads.

Key Components of the Google Ads Auction

The Google Ads auction involves several key components, including advertisers, ad inventory, keywords, and ad rank. Advertisers are businesses or individuals who place advertisements on Google Ads. Ad inventory refers to the available space on websites where advertisements can be displayed. Keywords are the terms or phrases that trigger advertisements to be displayed to users. Ad rank is a calculation that determines the order in which advertisements are displayed on a website.

How the Auction Process Works

The Google Ads auction process is triggered every time a user searches for a keyword or visits a website with ad inventory. The first step in the process is determining the eligibility of advertisers. Advertisers must meet certain requirements, such as having a valid payment method and ad content that complies with Google's policies, to be eligible for the auction.

Once eligible advertisers have been determined, the next step is calculating ad rank. Ad rank is determined by the combination of an advertiser's maximum bid and quality score. The maximum bid is the highest amount an advertiser is willing to pay for a click on their advertisement. Quality score is a calculation that takes into account several factors, such as the relevance and landing page experience of an advertisement.

Finally, the winning ad is selected based on the highest ad rank. The winning ad is then displayed to the user in the ad inventory space on the website.

Factors that Impact Ad Rank

There are several factors that impact ad rank and, therefore, the chances of an advertisement being displayed to users. The first factor is maximum bid. A higher maximum bid can increase ad rank and increase the chances of an advertisement being displayed.

Quality score is another important factor in determining ad rank. Quality score takes into account the relevance of an advertisement to the keyword it is being triggered by, as well as the quality of the landing page experience for users who click on the advertisement. A higher quality score can improve ad rank and increase the chances of an advertisement being displayed.

Ad relevance and landing page experience are also important factors in determining quality score and, therefore, ad rank. Advertisers should ensure that their advertisements are highly relevant to the keywords they are targeting and that the landing page experience for users is of high quality.

Finally, ad format and device type can impact ad rank. For example, advertisements that are well-suited to mobile devices may have a higher ad rank than advertisements that are not optimized for mobile.

Optimizing for Google Ads Auctions

To optimize for the Google Ads auction, it is important for advertisers to understand the auction insights report. This report provides valuable information about an advertiser's performance in the auction, including their average ad rank and the reasons why their advertisements may not be displaying.

Improving quality score is another important aspect of optimizing for Google Ads auctions. This can be achieved by increasing the relevance of advertisements to keywords and improving the landing page experience for users.

Increasing the maximum bid can also improve ad rank and increase the chances of an advertisement being displayed. However, it is important for advertisers to strike a balance between increasing their maximum bid and maintaining profitability.


The Google Ads auction is a complex system that determines which advertisements are displayed to users and where they are displayed. Understanding the key components of the auction, such as ad rank and quality score, and the factors that impact

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