In SEM, how are ads ranked?

• A. The engine ranks ads based on color and design
• B. The engine ranks ads randomly
• C. The engine ranks advertisers based on their bid and relevance to the search
• D. The engine ranks ads by the advertiser's budget alone

Answer: (C)

Ads are ranked through an auction where the system weighs how relevant the ad is to the user's query and how much the advertiser is bidding. This ranking, called Ad Rank, combines the bid amount with quality factors such as expected click-through rate, ad relevance, and landing page experience, along with the impact of any extensions. The higher the Ad Rank, the better the ad’s position. Budget alone doesn’t determine the rank, and factors like color or design don’t drive ranking. A highly relevant, well-constructed ad can outrank a higher-bidding, less relevant one.