How Google AdWords Determines How Much You Pay Per Click!

by admin on June 17, 2009

Remember when the higher you bid per click, the higher your position was? Seems like forever ago, and some PPC networks still work on this design. Not AdWords.

Nowadays, what is important when advertising via Google AdWords? The answer is your Quality Score, as Google no longer operates on the “highest bid wins” system and has moved to a new Quality based bidding system.

To help you understand exactly how your Quality Score effects bid prices and ultimately your ROI, check out this great video posted by Google’s Chief Economist Hal Varian.

After viewing, you can clearly see how important it is to improve your quality score by bumping up your click through rate and re-evaluating your landing page relevancy. Doing so will reduce your overall costs as well.

Video highly recommended!

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