Ad Rank Simulator

Adsense is the publisher side of Google's dynamic system that brokers advertisements between advertisers and publishers. The advertiser side is called Adwords, and the Adword Help pages contain some information of relevance to this online course for publishers. In particular, Google explain in detail how they broker ads.

In the Adwords Help section on pricing, Google describe how they determine the placement of advertisements on your page and the price that each advertiser pays per click (of which you, the publisher, receive a percentage). They use a worked example and, for the benefit of readers familiar with that page, I'll use the same example.

In summary, Google use a complicated formula called Ad Rank to decide which ads should appear on a page and in what order. And they use another complicated formula to decide how much each advertiser should pay for a click.

In Google's Adwords Help example, there are 5 ad slots on your page - let's suppose it is a 160 x 600 tower. There are five advertisers appearing in your tower: Kim's advert is at the top, then Sarah's, Brian's, Joe's and finally, at the bottom of the tower, Amber's.

However, the amounts they bid, which are in the top part of the Ad Rank Simulator (right), are not in descending order. Although Kim is at the top, she has made the third highest bid. Also, the amount that the advertisers actually pay is different from the bid.

You can experiment with different bid amounts by changing the bids and either pressing "Update" or clicking just outside the box you just changed.

The results may not seem logical, so in this course I'll explain what Google are doing. The first thing to look at is quality score, which along with the advertisers bid is an important part of how the Ad Rank calculation works.

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