Google Display Advertising
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Google Display Advertising
Google AdWords is split into two networks, the Search Network and the Display Network. When advertising on the Search Network, businesses place text ads in the search engine results. On the Display Network, businesses instead place display ads on a huge network of sites across the internet.
Google display ads are served on the Google Display Network—a network of over two million websites and apps that reaches somewhere in the ballpark of 90% of internet users. Such an immense potential for reach is the definition of a double-edged sword. True—you have the power to introduce your brand to tons of relevant consumers. But you’re also liable to introduce your brand to tons of irrelevant consumers.
Broadly speaking, there are two types of Google display ads: uploaded and responsive. Whereas uploaded ads place the onus of creation and optimization (more on this below) entirely on you, responsive ads pass the reins to Google Ads.
the Google display network runs on a live auction system. When you’re eligible for a given ad unit—according to your targeting parameters—you’re entered into an instantaneous auction with the other advertisers who are eligible for that same unit. For the sake of simplicity, let’s assume you and your competitors are bidding on a cost per click (CPC) basis and competing for real estate on a standard blog page.
The auction is Google’s way of determining where each advertiser lands on the page and how much each advertiser pays for a click. Your ad position and CPC depend on your Ad Rank—a metric that, in turn, depends on your maximum CPC bid and Quality Score. The former, of course, is the maximum amount of money you’re willing to pay for a click on your ad. The latter is basically a measure of how relevant your ad is to the people you’re targeting.
The outcome of the auction determines how much you actually pay for a click—your actual CPC. Often, this is lower than your maximum CPC bid. When all is said and done, you pay the minimum amount of money required to outrank the advertiser in the position directly below yours—for incremental clicks, that is.
An incremental click is a click you wouldn’t have gotten if you were in a lower ad position. For example, while the ad in the first position may get five clicks, the ad in the second position may only get three clicks. In this case, two of the top ad’s five clicks are considered incremental. The CPC for those two clicks is just high enough to outrank the next advertiser. However, the CPC for the remaining three clicks is equal to what the next advertiser is paying for their clicks.
So, even if you win the best ad position on the page, a lot of the clicks you drive will be priced as if you’re in a lower position. The clicks you drive solely because your ad is more visible are slightly more expensive.
Updated February 2022