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Decoding the Jargon

Ad auction

Also called auction

Performance marketingTerm

The process that runs each time an ad could be shown, deciding which ads appear and in what order. On Google and Meta it weighs your bid together with the ad's quality and relevance, not bid alone.

Example

When someone in Pune searches 'cotton kurtis near me', Google runs an auction among advertisers bidding on matching keywords. Meera's ad can win a higher spot than a bigger store's if it is more relevant, even with a lower bid.

How you'll hear it

“We're not losing the auction on price; our ad just isn't relevant enough to that search.”

Don't confuse it with

  • Ad Rank: the score each ad gets inside the auction.
  • Bid: only one input into the auction.

Related terms

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Sources

  1. Auction, Google Ads Help
  2. Ad Rank: Definition, Google Ads Help

Checked 1 October 2026. Examples use a fictional business; figures are illustrative.

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