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Google Ads Study Note: Five Key AdWords Auction Insights

Google is the largest search engine in the world. It builds a very close relationship between advertisers and users. Users come to Google, then type their questions on the search box, and try to find good answers. 

 From a business perspective, Google wants users to come back and continue to use Google as their first or only search engine. Therefore, Google needs to have the auction for those ads and to make sure the ads are relevant to what users search for. By delivering relevant ads, Google will earn trust and credibility from users.

 The course instructor Isaac shares five key insights of AdWords auction:

 #1: Always need to focus on relevancy

Google's job is to send users to the most relevant landing page that contains the most useful information to answer their questions. Google really cares a lot about the user experiences with those ads.

There are two subcategories regarding relevancy: 
  • The first is the ad text. Google wants to make sure what your ad content is really relevant to what the users looking for. 
  • The second is the landing page. Make sure your landing page is relevant to the search terms. Google will check how relevant is your content, how clear is your site, how well is your site laid out, and etc. All Google wants is to deliver a positive user experience to users.

#2: Google uses "second price" auction model

The "second price" auction model means that you only need to pay the amount at the advertiser below you. In most cases, advertisers only need to pay as much as they need to beat the other advertisers below them.

#3: You only pay for click

The impression doesn't cost money. Your ad may be shown a thousand times per day, but if no one clicks (what a sad), you won't get charged. You only pay when someone clicks your ad and visit the page.

#4: Every single search triggers another auction

Every single time a query is entered into Google, there is another live auction. Your quality score might change, the competitive landscape might change. That affects how much you have to pay for a click and also affects your average ad position.

#5: Max CPC Bids equal to the MOST you are willing to pay for a click

Google won't charge your max CPC all the time. You may and you would like to pay less when the bidding is not competitive, but you are not paying more than your maximum CPC. The max CPC bid is not necessarily what you are going to pay. It is the most you are willing to pay. Sometimes, a higher position does not mean you get a higher cost per click. 
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