What is Google Ad Rank

Ad Rank

Ad Rank is calculated using your bid amount, the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats.

How ad position is determined

Ad position  is determined by your Ad Rank  in the auction. Your Ad Rank is a score that's based on your bid, the components of Quality Score

(expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats. If you're using the cost-per-click bidding option, your bid is how much you're willing to pay for a single click on your ad. The quality components of Ad Rank are a measurement of the quality of your ad text and landing page in the context of what a user is searching for.

Note that if you're using extensions

 such as sitelinks, the expected impact from those extensions is factored into your Ad Rank. This means that if two competing ads have the same bid and quality, the ad with the better expected impact from extensions will generally appear in a higher position than the other.

To improve your ad position, you can increase your bid, or you can focus on improving the quality of your ads. See the "Next steps" section at the bottom of this article for more information about how to optimize your ad position by improving your ad quality.

New AdWords Ad Ranking Formula =

How Are Google Ads Ranked On A SERP?

AdRank determines the order in which competing ads should be ranked on a SERP, which (obviously) has a huge impact on the visibility of your ads to potential customers. Here’s the basic concept:

AdRank in AdWords has historically been calculated based on your Max CPC and Quality Score.

The preceding figure illustrates how competing ads on Google are ranked in descending order of Ad Rank. The advertiser that has the highest product of maximum CPC bid and Quality Score wins the coveted top ad spot.

How Does AdRank Impact Cost-Per-Click?

A less known (and more confusing) fact about AdRank is that it plays a huge role in determining the actual cost-per-click that your competitors pay when someone clicks on their ads, as you can see by the following figure:

The CPC You Pay is Determined by the Ad Rank of the Person Below You Divided by Your Quality Score.

Note that the cost-per-click you get charged by Google when someone clicks on your ad (which is not the same thing as your maximum CPC bid — which is the most you are willing to pay, but not necessarily what you are actually charged) has everything to do with what other people were willing to pay for the click and their Quality Score, divided by your Quality Score, plus 1 cent.

Confusing huh? Let’s go through a quick sample ad auction example here:

An Example Ad Auction in AdWords where 4 Advertisers are competing for the same Keyword.

In this example, four advertisers are competing for the same keyword. Notice if someone were to click on advertiser 1’s ad, he would pay just $1.61 which is equal to the Ad Rank he must beat (which is Advertiser 2’s Ad Rank of 16) divided by his own Quality Score (which is 10), plus 1 penny.

The key takeaway here is that AdRank helps determines both your ad position and the cost-per-click of your nearest competitor. For that reason, I consider it to be among in holy grail of SEM metrics, right up there with other super important PPC metrics like Quality Score

What’s Changed With AdRank?

Last week, Google announced big changes to the way AdRank is calculated. Unfortunately, In typical Google fashion, the announcement is rather short and vague on details — so here’s my detailed, line-by-line analysis of the official announcement that was posted on official the AdWords Blog (complete with my snarky comments inline).

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