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.