Skip to main content

How does the Google Ads auction system work?

 The Google Ads auction system determines which ads appear on a search results page, in what order, and how much advertisers pay. Here's a breakdown of how it works:

1. A User Triggers a Search

When someone searches on Google, the system scans its pool of advertisers bidding on keywords relevant to that query.

2. Eligibility & Ad Rank Are Calculated

For each ad, Google calculates something called Ad Rank, which decides:

  • Whether the ad is shown at all

  • Its position on the page

Ad Rank is based on:

  • Bid Amount: How much you're willing to pay per click

  • Quality Score: Based on:

    • Expected Click-Through Rate (CTR)

    • Ad Relevance to the search

    • Landing Page Experience

  • Ad Extensions & Formats: Use of site links, callouts, etc.

  • Context of the Search: Device, location, time, search intent

3. Highest Ad Rank Wins, But It's Not Just the Highest Bidder

You don’t need the highest bid to win. A more relevant ad with a better Quality Score can beat a higher bidder.

4. Cost is Determined (Second-Price Auction)

You don’t pay your full bid. Instead, you pay just enough to beat the Ad Rank of the next highest competitor — not necessarily your full bid.

Formula:

Actual CPC = (Ad Rank of the competitor below you ÷ Your Quality Score) + $0.01

5. Ad is Displayed

Google displays the top ads, often above or below organic results.

Example:

  • Advertiser A bids $4, Quality Score = 10 → Ad Rank = 40

  • Advertiser B bids $6, Quality Score = 5 → Ad Rank = 30

Result: Advertiser A wins the top spot, even with a lower bid.

Popular posts from this blog

Explain the Angular compilation process: View Engine vs. Ivy.

 The Angular compilation process transforms your Angular templates and components into efficient JavaScript code that the browser can execute. Over time, Angular has evolved from the View Engine compiler to a newer, more efficient system called Ivy . Here's a breakdown of the differences between View Engine and Ivy , and how each affects the compilation process: 🔧 1. What Is Angular Compilation? Angular templates ( HTML inside components) are not regular HTML—they include Angular-specific syntax like *ngIf , {{ }} interpolation, and custom directives. The compiler translates these templates into JavaScript instructions that render and update the DOM. Angular uses Ahead-of-Time (AOT) or Just-in-Time (JIT) compilation modes: JIT : Compiles in the browser at runtime (used in development). AOT : Compiles at build time into efficient JS (used in production). 🧱 2. View Engine (Legacy Compiler) ➤ Used in Angular versions < 9 🔍 How It Works: Compiles templat...
Read more

Explain the concept of ControlValueAccessor in custom form components.

 In Angular, the ControlValueAccessor interface is what allows custom form components to work seamlessly with Angular forms (both reactive and template-driven). 🧠 What is ControlValueAccessor ? It’s an Angular bridge between your custom component and the Angular Forms API . When you use a custom form component (like a date picker, dropdown, slider, etc.), Angular doesn't automatically know how to read or write its value. That’s where ControlValueAccessor comes in. It tells Angular: How to write a value to the component How to notify Angular when the component’s value changes How to handle disabled state 📦 Common Built-in Examples: <input> and <select> already implement ControlValueAccessor You implement it when creating custom form controls 🔧 Key Methods in the Interface Method Purpose writeValue(obj: any) Called by Angular to set the value in the component registerOnChange(fn: any) Passes a function to call when the component value ch...
Read more

What are the different types of directives in Angular? Give real-world examples.

In Angular, directives are classes that allow you to manipulate the DOM or component behavior . There are three main types of directives: 🧱 1. Component Directives Technically, components are directives with a template. They control a section of the screen (UI) and encapsulate logi c. ✅ Example: @Component ({ selector : 'app-user-card' , template : `<h2>{{ name }}</h2>` }) export class UserCardComponent { name = 'Alice' ; } 📌 Real-World Use: A ProductCardComponent showing product details on an e-commerce site. A ChatMessageComponent displaying individual messages in a chat app. ⚙️ 2. Structural Directives These change the DOM layout by adding or removing elements. ✅ Built-in Examples: *ngIf : Conditionally includes a template. *ngFor : Iterates over a list and renders template for each item. *ngSwitch : Switches views based on a condition. 📌 Real-World Use: < div * ngIf = "user.isLoggedIn...
Read more