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Auctions in Search Engine Marketing


Auctions in Search Engine Marketing: As we know, Google has to deal with a lot of websites. When I say lot, I mean like a literally lot of websites. So when Google was designing this entire monetization process of marketing, it had to make sure that it’s fair and just.

Search Engine Marketing
Source: Reliable Soft

You see there are all kinds of websites – good, bad and worse. And all of them want to be on top of Google’s ranking system. So it is very challenging for Google to make sure they have correct approach to this process. It was then when it came up with this process of Auctions.

So just like regular Auctions, you have various websites bidding for good positions for their ads on Google Ad Rank list. As mentioned previously, your ad rank depends majorly on the ‘Quality Score’ and also on ‘Ad Relevance’.

Example

For eg., there are 4 bidders bidding for the position of their ad A, B, C and D. Now, A is bidding at Rs. 5, B is bidding Rs. 10, C is bidding Rs. 15 and D is bidding Rs. 20. Here C who is bidding Rs. 15 has an average quality score which means the content of his page is pretty decent. But D who is bidding Rs. 20 has a terrible quality score and B who is bidding Rs. 10 has an exceptional quality score. Now who will win this auction?

While some of you might say D will win this auction because D is willing to give the highest amount to Google. Some of you might say Google will choose B because his quality score is the highest. But you know who will actually win this auction? The answer is C. C will win this auction because his bidding amount is the higher than B and quality score is higher than D. Thus forming a balance between the Quality Score and Bidding amount.

The reason why Google does this and doesn’t go for D or B is that neither does it want the customer to suffer and see bad advertisements nor does it want less profit. It wants to maintain a balance between monetary profits and customer satisfaction and that is why it the most loved search engine marketing today.

Also Read: Terms used in the digital marketing world

Google thus ensures from this auction process that you pay the right amount of money for your ad but also maintain the quality of your ad. But when you impress Google it makes sure it gives you the perks of winning the auction.

So when C wins the auction, Google tells him that “Hey, since you have good content and your giving me good money for your ad, I will give you a small concession for it”. So then C doesn’t pay Rs. 15 but the next lowest bidding amount claimed by the other bidder in the chain i.e. B’s Rs. 10.

Woah! Google’s the boss isn’t it? So this is how the auction process for the best position is carried out.

Author: Ankita Mundhra


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