How does the Google Ads auction work?

A guide to mastering the ad auction & maximising the return on your search campaigns.

Which auctions do you enter?

When a user makes a search on Google, an auction is initiated between all the advertisers who want to show an ad on this “search term” (the word or phrase the user searched). 

Whether you are entered into the auction depends on the “keywords” or “dynamic search targets” you are targeting in your account. Keywords are phrases that you have chosen as ones that you would like to show ads on, while dynamic search targets are landing pages you have chosen.

If the user’s search term matches one of your keywords or landing pages, then you’re entered into the auction.

If you win the auction, your ad shows in the user’s search results, & hopefully they click through to your website & perform your desired action e.g. submitting a grant application.

Who wins the auction?

Unlike a normal auction, the Google search auction isn’t necessarily won by the advertiser willing to pay the most. Google wants the user to see useful & relevant ads, so the winner depends on both the monetary bid, & “Quality Score”, which is a measure of the quality of the user experience.

Quality Score is made of 3 components:

  • Ad relevance: How relevant is your ad to the keyword and search term?
  • Landing page expectancy: How good / relevant is your landing page? What’s the site speed like? Are there lots of navigation options?
  • Expected click through rate: How likely is someone to click on your ad vs other advertisers’ ads?

Read more on Quality Score here!

How can you win the auction?

As an advertiser, it’s important to use your knowledge of how the auction works to enter & win as many relevant auctions as possible. Using knowledge of how the auction works, the best ways to do this are:

  • Show ads on a wide range of relevant searches
  • Maximise your quality score
  • Bid the right amount in each auction

Read our article on how to do these 3 things!

Do good, better

If you’re looking for a paid media agency with detailed knowledge of the ins & outs of the Google auction, & how to use it to your advantage, we’d love to hear from you!

How does the Google Ads auction work?

Oxford educated, Gwenno’s expertise now spans Paid Search, Social & Display, working on a mix of ecommerce, charity, event, education & B2B clients. In addition to tackling creative strategy, she is also the agency's tracking expert and oversees data & reporting projects.