Ever wondered why certain results appear first when you search online?

Dive into the world of search ads, where sponsored entries vie for your attention at the top of your search results. From Google's auction system to the intricate factors behind Ad Rank, uncover how these ads shape your browsing experience.

Ready to explore the mechanics behind what you see on your screen? Read on for an insightful journey into the realm of search advertising. Discover how it works, who offers it, and why it matters.

Key Points

• Search ads are sponsored entries that appear at the top or bottom of search engine results pages (SERPs). These ads are paid for by advertisers and are marked with a small green "Ad" symbol to differentiate them from organic results.

• Google, the most widely used search engine, employs a modified second-price auction system to determine the ranking of ads on SERPs. Advertisers bid on keywords, but ad placement is also influenced by factors like expected click-through rate, landing page experience, ad relevance, and ad formats.

• Ad Rank is Google's method for deciding how prominently ads appear in sponsored results and how much advertisers pay. It considers factors like expected click-through rate, landing page experience, ad relevance, and ad formats. This ensures that only relevant ads are displayed to users, enhancing the overall search experience.

• While Google dominates the search ad market, other search engines like Bing, Yahoo, Baidu, and Yandex also offer platforms for advertisers. Crafting a global search advertising strategy involves considering the preferences and market shares of different search providers to reach the widest audience possible.

What Are Search Ads?

When you search for something online, like a product or service, Google (or any other search engine) shows you a page with different types of results. These results can be either organic or sponsored. Sponsored results are paid for by advertisers to be shown at the top or bottom of the page.

Google search ads

Sponsored entries are usually the first few results you see when going through Google Search results, and sometimes they're at the bottom too. To let you know they're paid ads and not organic, Google marks them with a small green "Ad" symbol.

In the past, Google used different methods to show sponsored results, like using yellow or blue backgrounds or yellow "Ad" icons. Ginny Marvin's post on Search Engine Land offers more detailed information about these changes.

Evolution of Google search ads

How Search Ads Work?

The operational principles behind search advertisements are quite similar across various well-known search engines, albeit with minor variations. Since Google stands as the most widely used search engine, let's take it as our prime example to illustrate how its search ads function.

Google employs a modified second-price auction system to arrange the advertisements displayed on its search engine results pages (SERPs). This system determines both the ranking of ads and the cost advertisers must pay to secure a prominent position atop the results page.

Ad Rank score

In essence, Google's second-price auction model entails that advertisers need only pay the amount required to surpass their closest competitor, based on their Ad Rank (further elaborated below).

However, the system isn't solely driven by bidding. If Google were to allocate ads solely to the highest bidders, the SERP would be inundated with low-quality paid advertisements leading to entirely unrelated landing pages. This scenario would undermine the trustworthiness of the search engine. To enhance the experience for both users and advertisers alike, Google also considers an advertiser's Ad Rank.

What is Ad Rank?

Ad Rank functions similarly to Google's PageRank but for search ads. It's a method Google uses to decide how prominently ads appear in the sponsored results and how much advertisers pay when someone clicks on their ad.

Google openly advises advertisers on ways to boost their Ad Rank and secure higher positions in paid search results. On the other hand, achieving top positions in organic search results (akin to the traditional PageRank) remains a cherished goal in online advertising. However, the algorithms governing organic search rankings are less transparent and subject to frequent changes.

The Ad Rank formula involves several factors:

• Expected click-through rate: This is Google's estimate of how likely an ad is to be clicked. It's like a self-learning system where Google observes the click-through rates of displayed ads and adjusts future estimations accordingly.

• Landing-page experience: A relevant and user-friendly landing page receives a higher Ad Rank. This includes having original and pertinent content, easy navigation, and transparent information.

• Ad relevance: Google evaluates how well an ad matches the user's query to ensure only relevant ads are displayed.

• Ad formats: Google also considers how different ad formats might impact the user experience. These formats can include extra information like ratings, prices, directions, and phone numbers, which enhance the standard search ad.

The factors mentioned above make it highly improbable for advertisers to simply pay their way to the top of search engine results and display irrelevant ads to users. Simply bidding high doesn't guarantee a spot in the paid search results.

In this regard, Google search ads appear to operate as a well-regulated system. Users prefer seeing only relevant ads, while advertisers aim to display ads that are likely to be clicked on by users.

You can find more information about the bidding and ranking process in the video below, which is from Google's official YouTube channel:

Who Offers Search Ads?

Many search engines offer platforms for advertisers to showcase ads in their search results. Google uses AdWords, Bing uses Bing Ads, and so forth. This allows search providers to make the most of their large user base and their users' intentions.

While Google dominates the search ad market, a comprehensive search marketing strategy should also consider advertising on engines like Bing and Yahoo. Additionally, certain markets show a preference for specific search providers.

For instance, Baidu is a major internet player in China, while Yandex holds the top spot in Russia with a 65% market share. These figures cannot be overlooked when crafting a global search advertising strategy.

Although Google holds a staggering 77% of the global search-engine market, other search engines like Baidu, Bing, Yahoo, and Ask still gather significant audiences:

• Google (77.43%)
• Baidu (8.13%)
• Microsoft Bing (7.31%)
• Yahoo (5.6%)
• Ask (0.13%)