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Working in a dealership, you have a million more important things to worry about than how Google’s Paid Search Auction works. But your dealership is probably spending thousands of dollars a year on paid search because it’s a proven, high ROI marketing channel for your dealership. Google’s Chief Economist, Hal Varian, just put out a quick, new video updating how the Paid Search Auction works.

This new video does a great job of explaining updates to the ad auction (including items like Ad Format Impact), presenting why Google uses the different factors that they incorporate into their auctions. Among the concepts he addresses are:

1. The (updated) 5 Ad Rank Factors
   
   1. Bid Price – Your Keyword’s Cost Per Click
   2. Expected Clickthrough Rate – Google’s measure of how often Google has determined someone using that Keyword Search Query will click on your ad
   3. Landing Page Experience – Highly Relevant (to the Keywords and the Ad Copy) Landing Pages are best; specifically a High Quality Landing Page is:
      • Relevant and Original Content
      • Easy to Navigate
      • Transparent – about the nature of your business, how your site interacts with the user’s computer, and what you will do with the user’s information if you collect it
   4. Ad Relevance – Google uses your ad copy to make sure that it is relevant to the Keywords in the Search Query; they don’t want to serve ads that have no relation to a search
   5. Ad Formats – Enhancements to your Ad.  All of these add more information and more reasons to click on an ad.  This information would include:
      • Phone Number
      • Site Links
      • Website’s Domain in Ad Headline
      • Ratings
2. Quality – It appears that Hal is suggesting that “Quality Score” is an aggregate of Bid Price, Expected Click Through Rate, Landing Page Experience, and Ad Relevance (these have traditionally been the components of Quality Score).  Hal’s video suggests that Google actually looks at “Ad Format Impact” as a separate factor from Quality Score.
3. Ad Rank – Ad Rank is the number that Google assigns to each eligible ad to determine which ads and in what order to show them for any auction.  Ad Rank is based on a formula of Quality Score x “Ad Format Impact” x Bid Price.  The higher your ad’s Ad Rank, the higher up it will show for a particular Search.
4. Second Price Auction – this is how Google’s Adwords system actually determines the price that you pay when someone clicks on your ad.  Advertisers don’t actually pay their bid amount.  Once Google determines that an Advertiser’s ad is going to show, they charge the price that the advertiser would need to pay to beat the next highest Advertiser’s bid.  So, if you bid $4 for an ad, but based on your ad’s Quality Score AND Ad Format Impact, you might only need to pay $2.50 to beat the next Advertiser’s ad, so you are only charged $2.50 for a click on your ad.

The video is not even 9 minutes long, and if you use this outline while you watch it, you will probably be able to understand how Google’s Paid Search ad auction works in less than 30 minutes.

When you’re looking for a local business on your phone, how often are you in a position to write down a phone number, and then call?   It’s much easier to click the number of the business and have your phone call automatically – it seems obvious.  Did you know that less than 40% of car dealer’s PPC ads use this click-to-call functionality?

Using Click-to-Call in your PPC ads is especially important because it gives a clear call to action for consumers, and also allows your dealership’s ads to use the full text space. Since Google uses the click and call through performance of your ad when determining your Quality Score and cost per click, allowing viewers to convert from the search results page can provide your dealership with a huge boost in your PPC ROI.  Also, Google doesn’t allow phone numbers in the PPC ad copy, so using the Click to Call ad extensions they offer will add a “Call” button in your ad.

According to Google Think Insights, over half of auto searchers would be “very likely” to use click to call for parts/services or vehicles if the option were available.  Your dealership should be using click to call on your dealership mobile website (regardless of whether you use adaptive or responsive design).

Once your dealership has set up to click to call on your site (or in your PPC ads), make sure they are configured properly and are defined as goals in your Google Analytics.  If your website is not set up this way, and you’d like to have a website that automatically tracks all of your mobile calls via Google Analytics, we can provide you with a website that has that capability.  This will also help your dealership to more accurately track phone calls and the ROI of your online marketing efforts.  Your dealership website provider should be able to help you set this up.  Lastly, make sure you regularly test your click-to-call links across multiple devices to make sure they work on all devices and ensure your dealership isn’t missing leads.