How Google Adwords Ad Placement Works

Google AdwordsWe all have a vague idea of how Google Adwords works. You give them a list of keywords, create your ad and and set a maximum bid. But do you really know how the ad auction work? It’s all based on 3 simple criteria: your max bid, other advertisers max bid, and ad quality (CTR, relevance, landing page). Taking all these criteria into account, Google will then give you an ad rank, which will eventually determine your actual CPC. Sounds confusing? Then read on…

Watch this 9 min. video by Hal Varian, Google’s Chief Economist to learn more about the process and finally understand what you’re paying for.

5 thoughts on “How Google Adwords Ad Placement Works

  1. Adwords is a really great tool for promoting your website, forum or affiliate link. the ppc cost of adwords is even cheaper than Friendster or Facebook. before, i used to advertise on facebook but the ROI is so low. Adwords gives me a much better ROI compared to Facebook ads.

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