Google uses a composite methodology to overall rank the ads and determine its position. Google´s methodology is not solely driven by financial bid but also factors like Ad quality and Ad formats contributes to determine an overall score. It is this composite score known as Ad Rank that governs the position of relevant ads related to a query search.

To understand this a little bit better let’s use a simple equation,

Ad Rank = Financial Bid (1) + Quality of Ad (2) + Ad Format (3)

1. Financial Bid:

It is the price that is bid by a provider, to place its ad when a user search for a query relevant to his business or offering.

2. Quality of Ad:

It includes three components

a. Landing page experience:

Landing page is the first interaction of user with provider. It provides a valuable experience to the user and helps in improving conversion rate. It is one of the crucial factors to improve position of advertisement.  Google also suggested some points to enhance user experience by incorporating following:

  • Relevant and original content:

Relevant advertise with respect to keyword search and original content direct traffic to provider.

  • Easy to navigate:

The ease to navigate provider’s website and making sure the user obtains the necessary information with minimal clicks helps to develop credibility and improves conversion rate. A three click rule can be established to improve user experience.  Under this rule the provider makes sure that the user can acquire necessary information in maximum three clicks.

  • Transparency:

it helps the user to understand clearly the provider’s nature of business. How provider´s site interact with visitor´s computer and how user´s information will be intended to be used.

 

b. Ad Relevance:

Relevance is determined by analyzing the language of advertisement and the language of search query. Key words play a vital role in analyzing the language and establishing relevance with the search query. Google ensures that only relevant ads are displayed to the search by using this strategy.

 

c. Expected click through rate:

It is a prediction that Google does to consider the expected click rates which are based on user driven feedback.

 

3. Ad Formats:

Ad formats are the enhancements which more prominently displays information about providers like contact details, ratings, directions etc.

So, referring to the equation above we can conclude that to increase Ad Rank we must either increase 1 or 2 or 3 to overall increase Ad Rank score. Now if we don’t want to pay more overall rank can still be increased by improving either quality of Ad (2) or Ad format (3), thereby improving overall Ad Rank score.