What is Google Ad Auction & How it Works ?

As we already know that Google Adsense displays Ads from Google Adwords program. An Ad auction is conducted by Google to select what kind of Ads will be displayed on publishers site. As in traditional auction bidders states their maximum price to buy the specific item.

Similarly Google Ad auction allows the advertisers to set the price they are going to pay for clicks or impression generated on ad pages.

How this auction really works ?

Google first narrow down the Adword ads to find which ones are suitable for your website or blog . Here the ways how Google does that :-

Ad Targeting :-

This is the process in which Google select what types of Ads will be displayed on publishers site.

Niche Ads :-

Google displays the ads according to the content or the niche of your website. Adsense considers the ads of advertisers which matches the content of site.

History based Ads :-

I Have you wondered when you visited E-commercial sites like Amzon, Askme Bazar , Snapdeal and search for specific product after closing the site when you visit some other sites and Google Adsense starts showing same product in Ads Section these are history based ad, so why this happen in real time Google keep track on us what we are surfing.

Once Google Determines which type of Ads will be displayed on pages and how much advertisers will pay. For each Ad Adrank is calculated by combining the CPC Bid and Ad's quality score. Let's have a example :-

Advertiser	CPC Bid	Quality Score	Status
Stugburg	$10	10	Shown
Ram	$7	10	Not Shown
Sneha	$5	10	Not Shown

In this example there are three advertisers with same quality score competing for an ad unit that can show only one ad . Stugburg wins the auction because he is bidding the highest among all of three on the combination of CPC Bid and quality score.

How the Ad quality score is measured ?

Quality score is measured on how useful will be the ad to the people who will see it. Quality score is calculated on the following factors :-

-> The ads are predicted through click-through rate and past performance of ad on your site and similar site.

-> Relevancy of the keywords selected by Advertisers and your site keywords.

Factors that impact the Ad Auction

Because Google Ad auction is dynamic, the outcome of each individual auction and your earnings can change on a number of factors.

Seasonal Campaigns :-

Advertisers can set up campaigns to run during specific times of year such as "Holiday Off" or "New year off" .

Geo-targeting :-

Advertisers can also target their ads to specific regions and choose to bid based on time of the day.

Bottom Line :-

All these factors means that the same ads are not always competing for your ad space , so your earning may vary as a result.

What is Google Ad Auction & How it Works ? | Lafandar.org