The PPC Auction: The Ultimate Guide for Beginners

Where your ad ends up on the results page is determined by lots of factors, and not whoever has the highest bid alone. It’s a complex decision made behind the scenes by the search engine, deliberating which ad should take top spot. With things like auto bidding in place, the PPC auction can be made as simple as possible for your campaign.

While it may be daunting at first, we’re here to put your mind at ease and tell you what factors contribute to your ad’s position on the results page. The auction is a necessary part of any PPC strategy, so it’s good to get your head round the ins and outs. Want to work with expert PPC consultants who use effective bidding strategies to get your ad out there? Embryo can help. Find out more about our approach to the PPC ad auction by getting in touch.

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What is the PPC ad auction?

The PPC ad auction is the process that the search engine performs to decide which ads should be shown and which should come first. As many would believe, it isn’t actually the highest bidder who’s given the top spot. This is a common misconception. Letting the top bidders pave their way to the front ruins the quality of the top ads, and less relevant results may appear in response to the user’s search query. So, all this proves is that ads need to earn their spot with an effective campaign.

The auction balances all factors, so bidding does still come into it, it’s just not the primary ranking factor. After all, the search engine needs financial benefits too. But they also want to keep their audience happy by showing relevant and useful ads.

How does the auction work?

When a user types in their search query, the search engine will locate all ads that have bid for those keywords and find all that are eligible to show for that query. From this, those with a high ad rank are the ads likely to show and reach the top. The way an ad rank is determined is through a combination of quality (relevance, click through rate, landing page experience) and the amount of the bid.

Within the auction, certain ad rank thresholds are taken into account- these are essentially the minimum requirements your ad must meet in order to be shown by the search engine, such as the lowest amount you need to bid. Let’s look in a bit more detail at the factors that contribute to your ad ranking thresholds:

Ad quality

Quality is key. There’s no cutting corners by just throwing your highest bid out there. Ads lower in quality will have a higher bid threshold to meet. This maintains the quality of what the search engine displays so it can satisfy its users. If you invest in quality, you will be rewarded with a lower threshold. With the user-focused approach of search engines, quality goes a long way in your campaign.

Context of the user’s search

The specificities of the search query also determine thresholds. For example, the intent behind the search may change the threshold or even how competitive the keywords are. You may be required to bid more for keywords that other businesses are also competing to rank for.

Where and how the user is searching

User device and location can feed into how the threshold is set. Thresholds may be different between mobile device or desktop as user intent can change. Or, the variations could come down to which country or even city that the user is based in.

Auto bidding strategies

Save the stress with auto bidding strategies. This type of strategy allows you to automatically set the bids for your ads, making managing your campaigns much easier and more efficient. Google’s technology eliminates the need for guess work. Smart-bidding now has an increased level of accuracy and is optimised for your ROI (return on investment).

With automated bidding, all elements of context can be factored into the strategy. So, you can rest assured that its results are as reliable as can be. With some of the time consuming elements handed right over to Google, PPC specialists can focus their energy elsewhere, thus creating the perfect campaign for the business at hand!

Another benefit of auto bidding is that it can be optimised for your specific goals. Perhaps  you want to:

  • Maximise clicks
  • Target CPA
  • Target ROAS
  • Enhance CPC
  • Maximise conversions

Anything is possible! Whatever smart bidding strategy you want, it can happen.

Final thoughts

Not everything is about the bid. While it does contribute, the fate of your campaign isn’t solely determined by the bid amount. Keep your quality up to scratch and this can take your ad a long way up the results page. Remember, patience is key- you will experience some fluctuation, and that’s fine. Thresholds and competition are bound to vary, but try not to panic and use guess work.

You should hopefully now know what the PPC ad auction is and how it works. Auto bidding is a great strategy that can really benefit your campaign and helps PPC experts to target exactly what your ads need. Want to know more? Have a gander at the blogs below to learn more about PPC. If you’ve got a question for us, feel free to get in touch.

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