If you raise your bid, what does it actually buy?
The search ad auction does not sell the top slot to the biggest bid. It ranks advertisers on bid times quality score, then charges each one just enough to beat the advertiser in the slot below. This model puts six advertisers in a single auction and shows what your money is really buying.
Marketing Intermediate Data Table free
After you install, this is the model to open.
Ad Auction Simulator
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
The answer
Run the data table and a staircase appears. Your cost per click jumps only when you cross a rival's ad rank, and whole stretches of extra bid buy you nothing at all.
- Your ad position
- 4 of 6 slots
- Your cost per click
- $4.51 on a $6.00 bid
- Position 1 by bidding $9.00
- $7.01 per click
- Position 1 by quality 8
- $3.51 per click, same $6.00 bid
At a $6.00 bid and a quality score of 4 you land in position 4 and pay $4.51 per click. Pushing the bid to $9.00 does buy position 1, but at $7.01 per click. Raising your quality score from 4 to 8 buys the very same position 1 at $3.51 per click on the unchanged $6.00 bid, and Rival D, holding the highest bid in the auction at $9.00, still sits in position 5 paying $6.31.
The model
Six advertisers bid on the same keyword. You set your own max bid and quality score, and the sheet computes every ad rank, sorts the six slots, and prices your click off the advertiser directly below you.
| Your max bid (cost per click) | $6.00 |
| Your quality score | 4 out of 10 |
| Rival A | $2.80 bid at quality 10 |
| Rival B | $3.40 bid at quality 8 |
| Rival C | $4.20 bid at quality 6 |
| Rival D | $9.00 bid at quality 2 |
| Rival E | $1.80 bid at quality 7 |
| Bid sweep tested | $3.50 – $6.00 – $12.00 (8 steps) |
| Improved quality score to test | 8 out of 10 |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- Is that jump in your conversion rate real, or just luck?Is That Rate Real, or Just Luck?
- How big is your serviceable market, really?Serviceable Market Size (SAM) Range
- What are your customer segments, actually?Find Your Real Customer Segments
- The remodel looks better. Would you bet the chain on it?Which Store Layout Sells More?
- Which step of your funnel moves least reliably?Spend, Visits, Sales: What Moves Together?
- Is that channel better, or just one big customer?Which Channel Brings the Big Spenders?
Every model like this one, and the method behind them: What-if analysis in Google Sheets.