You can win a higher ad position in the auction with a lower cost-per-click (CPC) bid by:
Correct Answer
creating high-quality ads and landing page/ creating relevant keywords and ads, and using ad extensions
Why is this the correct answer?
You can win a higher ad position with a lower CPC bid by creating high-quality ads and landing pages, using relevant keywords and ads, and using ad extensions. Ad Rank determines position and is calculated as CPC bid multiplied by Quality Score plus the expected impact of ad extensions. A higher Quality Score — earned through relevant keywords, compelling ad copy, and a strong landing page experience — means your Ad Rank can exceed a competitor's even with a lower bid. Ad extensions further boost Ad Rank by improving expected CTR, allowing advertisers who invest in quality to outrank higher bidders.
Why are the other options incorrect?
creating ads that include terms or phrases people are searching for
Including search terms in ads improves relevance and CTR, which helps Quality Score, but this alone is incomplete — without ad extensions and a strong landing page, the full Ad Rank benefit is not achieved.
creating relevant ads and keywords, but not using ad extensions
Creating relevant ads and keywords without using ad extensions misses a key component of Ad Rank — extensions directly contribute to Ad Rank calculation and excluding them leaves position improvement on the table.
creating ads that link to a generic landing page
Linking to a generic landing page would hurt Quality Score by reducing landing page experience scores, which would lower Ad Rank and worsen position despite any bid level.
Real-World Example
A solicitor firm improves their ad Quality Score from 5 to 9 by rewriting ad copy to match keyword intent and adding sitelink extensions. Their average position improves from 3.2 to 1.4 while average CPC drops from £4.20 to £2.90 — winning more auctions at a lower cost per click.