Google Ads: How Google Decides Which Ads Show at the Top (Ad Auction Explained)
Understanding how Google decides which ads appear at the top is essential for anyone running Google Ads. Many advertisers believe that higher bids automatically win top positions—but that’s not how Google Ads works.
Instead, Google uses a smart, real-time system called the Ad Auction. This guide explains the concept clearly and then walks you through how to create high-performing Google Ads that stand out in competitive markets like Dubai.
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What Is the Google Ads Ad Auction?
Every time someone searches on Google, an instant auction takes place. This auction decides:
- Which ads are shown
- In what order they appear
- How much each advertiser pays
It happens in milliseconds—and it happens every single time someone searches.
Step-by-Step: How the Google Ads Auction Works
1. The Search Happens
Jose searches for “pizza delivery” while feeling hungry.
2. Ads Are Matched to the Search
Google scans all advertisers bidding on keywords related to pizza delivery.
Only ads that closely match the search intent are considered.
3. Ineligible Ads Are Removed
Google removes ads that:
- Target a different country
- Are disapproved
- Have budget or policy limitations
4. Ads Are Ranked (Ad Rank)
Eligible ads are ranked using a formula called Ad Rank, which considers:
- Your bid amount
- Ad quality
- Keyword relevance
- Landing page experience
- Expected click-through rate (CTR)
5. Ads Appear on the Page
Jose now sees relevant ads at the top of the page—and orders the pizza he wants.
6. The Auction Repeats
The entire process repeats for every search, meaning:
- Results can change each time
- Ad position fluctuations are normal
Why the Google Ads Auction Matters
The key takeaway:
👉 Higher bids don’t always win. Better quality does.
Even if a competitor bids more, you can still outrank them—and pay less—by having:
- Highly relevant keywords
- Strong ad copy
- Optimized landing pages
Google rewards relevance, not just spending power.
How Google Determines Ad Position (Ad Rank)
Your Ad Rank decides whether your ad appears and where it shows.
Main Ad Rank Factors
- Bid amount
- Ad relevance
- Quality Score
- Landing page experience
- Ad extensions
To improve your position, you must improve quality, bidding strategy, or both.
Creating a Perfect Google Ads Campaign
Once you understand how ads are ranked, the next step is making your ad stand out.
In competitive industries, placement alone is not enough. Your message is what drives clicks and conversions.
Why Perfect Google Ads Matter
Almost every industry today is highly competitive. Many businesses offer similar services—but only a few communicate their value clearly.
A perfect Google Ad:
- Highlights your USP
- Connects emotionally with users
- Solves a specific problem
- Encourages immediate action
Perfect Google Ads are not a myth. When done right, they accelerate business growth.
What Makes a High-Performing Google Ad?
Marketing expert Al Lautenslager outlines key principles of strong ad messaging:
- Focus on benefits, not features
- Speak directly to your target audience
- Use catchy headlines
- Keep the message simple and clear
- Offer urgency or incentives
- Build trust and credibility
- Answer: “What’s in it for me?”
- Include a strong call-to-action
- Highlight why you’re better than competitors
- Test and optimize continuously
You don’t need all elements at once—but the right combination matters.
5 Tips for Writing Better Google Ads
1. Write Headlines Worth Clicking
- Think from the customer’s perspective
- Include your main keyword in the headline
- Use questions where relevant
- Make it instantly clear what you offer
2. Keep Your Message Crystal Clear
Avoid confusing or vague messaging. If your headline asks a question, your description must answer it.
Relevance between search term → ad → landing page is critical.
3. Test Different Ad Formats
Use a mix of:
- Search text ads
- Display image ads
- YouTube video ads
- Remarketing ads
Users are everywhere—your brand should be too.
4. Use Remarketing Strategically
Remarketing helps you re-engage users who didn’t convert the first time.
Effective remarketing strategies include:
- Second-touch messaging
- Video sequences on YouTube
- 6-second bumper ads
Done right, remarketing delivers high conversions at lower costs.
5. Test, Measure, Repeat
There is no single winning formula. Constant testing is what separates average advertisers from high performers.
Why Google Ads Extensions Are Important
What Are Google Ads Extensions?
Google Ads Extensions offer a variety of options, some of the popular extensions include call extensions, location extensions, site link extensions, promotion extensions, and many more. Therefore, Using Google Ads Extensions can also improve the quality score of your ads and can make you stand out from the competition and drive more clicks and conversions.
Google Ads Extensions enhance your ads by adding extra information, making them more visible and clickable.
Benefits include:
- Higher CTR
- Lower CPC
- Improved Quality Score
Extensions allow you to add more value to your ads without extra cost.
Common Google Ads Extensions
- Sitelinks
- Callout extensions
- Structured snippets
- Call extensions
- Lead form extensions
- Location extensions
- Affiliate location extensions
- Price extensions
- App extensions
- Promotion extensions
Using extensions makes your ads more informative and competitive.
Location-Based Google Ads for Local Businesses
A lot of google searches are based on locations. example ___ in Dubai, ___ in UAE, ____ in Dubai marina. etc. It is important that you include your location in the ad copies and also on your pages to help find more relevance for users looking for you.
With more and more users connected online, a mobile-optimized website will help you stand out and the user to browse through with a breeze. Else it’s just like watching water boil and in today’s time, few have the patience to wait and watch the content load. So fast looking site makes all the difference.
With Adwords Tools, there are some good new location-based tools
- Location extensions. Make sure to link your google my business page
- Call extensions – make sure to add the call button in your ad and website right on top to connect with the user on phone.
- Bid modifier with radius targeting where you can bid high and low.
- See our location-based client case study to understand this
Many searches include location intent such as:
- “restaurant in Dubai”
- “gym near Marina”
For location-based businesses, location targeting is essential.
How to Optimize Google Ads for Location Targeting
Businesses with local stores or service areas
Closer customers are often more likely to buy from you and less costly to serve. So if your business has local stores or service areas, you should consider optimizing your bids based on customer proximity. For example, you can easily set one location target for customers within 2 miles of your business locations, and a second target for customers within 20 miles of your business locations. Then use the approach described above to calculate your optimum bid adjustment for your two location extension targets.
Best Practices
- Include location keywords in ad copy
- Use location extensions (linked to Google Business Profile)
- Enable call extensions
- Apply radius-based bid adjustments
Mobile-optimized websites are critical, as most local searches happen on mobile devices.
Location Bid Adjustments: Smart Tips
- Keep location targeting broad initially
- Use overlapping targets carefully
- Avoid bid changes with low data volume
- Review performance every 30–90 days
- Adjust bids gradually based on conversions
Closer customers usually convert better and cost less.
Tips and reminders
- Maintain a broad location target to cover your entire potential market. Targeting too narrowly can limit your reach, clicks and conversions.
- It’s OK to set overlapping location targets with bid adjustments. We’ll only apply the most specific location bid adjustment. For example, say you have a +10% bid adjustment for Canada and a +20% bid adjustment for Montreal. When someone searches in Dubai, your bid will be increased by 20%.
- Be careful when you don’t have much data. Otherwise, your calculated bid adjustments could end up being too high or too low, and you could end up with worse results instead of better. If you don’t have statistical expertise on hand, we recommend not adjusting bids in locations with fewer than 1000 clicks and 30 conversions, as a general rule of thumb. Lengthening the date range for your reports to the past 90 days or more can help.
- Periodically check performance and increment your bid adjustments. From time to time, check your performance for each location target on the Locations subtab. Incrementally raise your bid adjustment where your performance is above your goal, and lower your bid adjustment where your performance is below your goal. This will allow you to optimize your bids over time and adjust to changing consumer behaviour.
- More here – https://adwords.blogspot.ae/2013/05/location-bid-adjustment-best-practices.html
Leads Dubai is a Certified Google Partner in UAE. We help in getting your business more footfalls and calls. Contact us to book a free consultation.
Final Thoughts: Winning with Google Ads
Google Ads success is not about spending more—it’s about:
- Understanding the Ad Auction
- Improving Quality Score
- Writing compelling ads
- Using extensions and location targeting
- Constant optimization
Why Choose Leads Dubai?
Leads Dubai is a Certified Google Partner in the UAE, specializing in:
- Google Ads & PPC Management
- Lead Generation Campaigns
- Local & location-based advertising
We help businesses drive more calls, footfalls, and qualified leads.
We are a leading Google Ads & PPC marketing agency in Dubai, executing customized campaigns for top brands to boost the website’s traffic within a given budget.
Now that we understand how Google determines which ads show up at the top, the next thing is ensuring your ad gets noticed. In a competitive marketplace, your message is everything. A flawless Google Ads campaign isn’t merely about placement—it’s about creating engaging, relevant copy that grabs attention and delivers results. With guidance from a seasoned Google marketing consultant, you can optimize your approach for improved performance and ROI.
📞 Contact us today to book a free Google Ads consultation and start turning clicks into customers.
Why Google Ads Extensions are Important in your Campaign?
