This post was originally written by Ryan Moothart and updated by Sabrina Souza with additional information in August 2023.
Ad rank is a critical factor to consider when you’re creating and optimizing successful PPC campaigns.
Contrary to what you might think, ad rank isn’t all about the money. Having a higher budget doesn’t automatically mean your ads will show up in a higher position. It’s a more complex formula that’s important to understand, especially if you have a limited budget. While you may not be able to bid as much as other advertisers, if your ad rank is higher, you can still show up in a higher position than your competitors without having to spend as much per click.
One of Google’s primary goals is to ensure users have a quality experience by connecting them to the right solutions for their queries. By creating ads and landing page experiences that are valuable and relevant to the user, you can increase your ad rank and the chances of Google showcasing your ad. This ultimately helps increase the visibility of your ad and can lead to higher click-through rates, higher conversion rates, quality leads, and cost efficiency.
What Is Ad Rank?
Google defines ad rank as “a value that’s used to determine your ad position and whether your ads will show at all.”
Your ad rank is the result of any given paid search auction and is compared to those of your competitors to determine if and where on the search engine results page (SERP) your ad will show in relation to these competitors.
In the image below, you can see the top 3 positions to attain in the SERP for the keyword “scented candles.” The higher you rank, the higher the position your ad will show in:
To assess your own ad rank, position, and quality, these are the metrics you’ll want to take a look at in your Google Ads account:
- Search Impression Share Lost to Rank: Percentage of how often your ad didn’t show due to poor rank.
- Top Impression Rate: Percent of the impression you received that showed at the top of the SERP.
- Quality Score: Expected CTR + ad relevance + landing page experience.
What Is the Ad Rank Formula?
In simpler times, Google’s ad rank was determined by your max cost-per-click (CPC) bid and quality score. However, like anything else, it’s evolved over time to add a bit more complexity in order to provide users with a more relevant and higher-quality experience.
A key change Google made was adding the expected impact of extensions into the mix, allowing advertisers to further tailor a user’s search experience. For instance, sitelink extensions are a powerful asset that allows you to show the user (up to) 4 additional links to specific pages on your site. They also let you take up more real estate on the page, making your ad stand out more.
According to Google, ad rank is calculated using several factors:
- Bid Amount (and whether or not that meets a minimum threshold)
- Auction-Time Quality Score (includes expected CTR, ad relevance, & landing page experience)
- Competition of the Auction
- Context of a User’s Search (i.e., location, device, time)
- Your Enabled Ad Extensions
Your ad rank is also recalculated each time an ad is eligible for and competes in an auction. Therefore, it’s entirely possible that an ad for one of your keywords will show up in position #1 at the top of the page for one user’s search and in a different position for another’s.
What Factors Affect Ad Rank?
We discussed what factors go into calculating ad rank, but let’s dive deeper into what those factors are:
Bid Amount
You might be thinking – can’t I just bid more to show up higher? Not necessarily. Other factors like ad quality and context matter! If your quality score is high and your assets (keyword, ad copy, etc.) are highly relevant, you can still wind up getting the best ad rank in an auction while bidding less than your competitors.
Likewise, if your quality score is low and your assets aren’t as relevant to your user’s context (where they are in the funnel, for example), you could bid higher than all of your competitors and still not get the best ad rank.
Auction-Time Quality Score
Your quality score is available at the keyword level, scaled from 1-10. Since quality score factors in expected click-through rate (CTR), ad relevance, and landing page experience, a higher score indicates that you’re providing a higher quality ad and landing page experience that’s more relevant to the user searching your targeted keyword than competitors.
While your keyword quality score factors into determining ad rank for a given auction, your ad rank does not directly impact your quality score as a result of that auction.
Quality score is, however, determined in part by your expected CTR, which takes into account your historical CTR trend. That trend can be influenced by an improved ad position, which is determined by your ad rank.
Competition
In an auction, you’re competing against other advertisers for your ad to show up for searches relevant to keywords that you are all targeting. When competing for the same position, if one ad ranks higher than the other, they’ll be more likely to win that position.
Context of the User’s Search
Context includes factors like the user’s search term (the actual query that triggered your targeted keyword), physical location, time of day, device being used, etc.
That’s why it’s important to regularly review your search terms to make adjustments to your targeted keywords, location, ad schedule, and devices to optimize your campaigns and influence ad rank.
Ad Extensions
When creating your ads, you have the option to add additional assets like extensions (sitelink, callout, call, image, etc.). To calculate ad rank, Google takes into account the expected impact of your implemented extensions.
What’s the Difference Between Ad Rank, Quality Score, and Ad Position?
Your quality score is a component of how ad rank is calculated, which impacts your ad position.
Quality score focuses on the quality of your ad based on things like ad copy and landing relevance to targeted keywords. Ad rank layers quality score with factors like bid amount, user location, time of day, etc. Ultimately, all of these factors and calculated metrics determine what position your ad actually shows up in.
How to Increase Your Ad Rank
Having a better ad rank means better visibility on the SERP. The more visible you are, the more likely someone is to click on your ad. There are a few ways to directly improve your ad rank, which all refer to the factors mentioned earlier.
1. Increase Your Bids
This could mean increasing your max CPC if using a max clicks bidding strategy or your target CPA if utilizing a smart bidding strategy. Cost-per-click can also vary widely per industry or keyword you’re interested in targeting. It’s important to do thorough keyword research beforehand to create a proper budget strategy.
2. Improve Your Quality Scores
Ad quality and landing page relevance are important factors for quality score, so Google can make sure users are seeing relevant ads that match their search intent. You’re able to see your quality score on the keyword level to help ensure your keywords and ad copy are highly relevant to the search queries that could trigger them.
3. Optimize Ad Extensions
You’ll want to use as many relevant ad extensions as possible to boost your ad rank. Ad extensions can be set on the account, campaign, or ad group level to make sure you’re able to get as specific as possible to your targeted keyword themes and audience.
Wrap-Up
To sum it up: ad rank matters. It’s a great way to keep a pulse on the quality and competitiveness of your PPC campaigns.
Creating quality ads benefits both the user because they’re getting highly relevant ads tailored to their search and you as the marketer who is able to efficiently use your budget and drive business results.
If you need help optimizing your campaigns, check out our PPC services or contact our team today.
