Google Ads Bidding & Auction: How Does It Work?

Home > Giant Wednesday > Google Ads Bidding & Auction: How Does It Work?


You’re ready to take the plunge into your money bags and have a go at Pay Per Click advertising. Great!

Whether you’ve only just started, or you’re not quite getting the results you hoped for, I bet the mystical black box that is PPC bidding and the “auction” is a real frustration. 

Well, fear not, it’s time for me to debunk the PPC bidding mechanism and share my top tips for efficiency.

Get your auction cards ready, because Wednesdays are about to get GIANT.


Hello, my name is Ant and welcome to Giant Wednesday, the only place to be to discover the wonderful world of digital marketing. Don’t forget to subscribe to our channel and post your comments below.

So, PPC. Pay Per Click. The act of only paying for your advert, when someone clicks on it. Exactly what it says on the tin.

But if you’re here, you know that already and you’re onto the bidding stage.

Well, you’ve got your keywords tightly themed into logical, relevant and match type-specific ad groups. You’ve also written some great adcopy that’s relevant and informative.

Your landing pages are ready [cutaway: checklist all these], all your extension best practices have been followed and you know how much you have to spend on your campaigns.

So, all you have left to do is decide on the bid, the maximum cost per click you are willing to pay.

But where do you start?

Well, first things first… let’s work out how it works.

Some context for you, when a user goes to Google, types in a search query and hits enter, the huger games *ahem* the auction… begins!

Imagine you’re on eBay. There’s a pair of shoes you’re desperate for. You have £10 to spend but you go in low with a starting bid of a fiver. 

It’s pretty much that, but on Google.

Anyway, back to Google where the auction has just kicked off.

Google reviews all the advertisers that are eligible to appear for that search term and compares the amount they’re willing to pay for a click.

It then works out an order for them to appear based on this and hey presto, you have your results.

If you’re willing to pay more, you’re more likely going to grab the limelight. But that’s not fair for those with not-so-deep pockets, is it? 

To guarantee everyone has their fair chance of appearing at the top, Google balances the bid with user experiences, reviewing each advertiser for Quality score which is made up of three core components:


  1. Expected click-through rate, so the likelihood a user will click on your ad.


  1. Ad relevance to the query itself. This is where the ad copy should always ALWAYS be clear and relate to what the user’s searching for.


  1. And of course, the landing page experience. Are the users directed to a page that reflects the intent of the query? Does it provide a good user experience?


Make sure you’re ticking these boxes and then, alongside your bid, Google will calculate AdRank, delivering the ranking order. 

Clever, right? We’ll cover AdRank in another episode of Giant Wednesday, so make sure you subscribe to be notified.

The great thing about the Google Ads auction is that you won’t necessarily pay what you bid either. Just like with eBay, you might get lucky and get those shoes for a little less than you were willing to spend.

Google will only charge you the minimum amount you need to appear in the position you qualify for. How polite!

So now you should have a better understanding of how bidding with PPC ads work and how you can rank your ads highly.

But, before you go, let me share my 3 top tips for winning a Google Ads auction:

Number 1: don’t bid your way to the top. Instead, optimises for quality score. Keyword inclusions in ad copy and landing pages can have a massive impact on what you pay.

Number 2: don’t aim for first position. It’s not about how high you can appear, it’s about getting the most clicks for your budget, so experiment with your bid and remember to be clever with your copy.

Number 3: Never forget the importance of search query management. Search query reports are key to PPC optimisation so you can regularly review and act accordingly so you don’t waste budget or let things ruin your quality score.

And that’s me done!

We’ve spoken about the auction being Google’s mechanism for ranking advertisers that want to appear for a particular search term.

And I’ve hopefully imparted enough knowledge for you to remember that it isn’t all about the bid, but as with most things, it’s about the quality.

You can’t pay your way to success… in this instance anyway.

That’s it for today, go forth and comment your views on this and give us a like and subscribe to see more great digital and marketing content every week.

Thanks for watching, and we’ll see you next week for another GIANT Wednesday.

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