How Does Ad Rank Impact Cost-Per-Click?

Google assigns you an AdRank based on three criteria: the amount of your CPC bid, the site’s Quality Score, and the Ad Extensions, which are now required. The higher your Quality Score, the lower you have to pay in CPC to rank at the top of the SERP. Quality Score depends on your click through rate (CTR) along with subjective metrics, especially the user experience of your landing page and how relevant your page is to the keywords you’ve chosen.
 
Ad Rank is the equivalent of the mysterious algorithm that ranks sites in Google's organic search results. The difference between Ad Rank and that algorithm is that Ad Rank determines where ads appear in the sponsored results as well as how much the advertiser pays when someone clicks the ad.
 
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