Video: How Google Determines Max CPC

Posted on March 12th, 2009 in Expert Tips, PPC Management by Sarah

Are you brand new to Google AdWords? Did you know quality score was complex, but don’t remember exactly how it’s calculated? Think you know it all already? Get a refresher in the basics of Google pay per click (PPC) advertising with this Inside AdWords video. Google’s chief economist, Hal Varian, explains how the AdWords keyword auction is unique in that the top position doesn’t necessarily go to the highest bidder. Make sure you have the 3 ad quality score elements dialed in, and you’ll pay the minimum amount necessary for your ad’s position. After watching the video, let us know in the comments what the takeaway is for you!

~Sarah

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4 Responses to 'Video: How Google Determines Max CPC'

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  1. Dan PPCPROZ said,

    on March 13th, 2009 at 12:04 am

    Relevancy of the landing page is only a small part of the landing page formula, did you catch that? We don’t know exactly how much power this carries, but my guess is 30%.

    If that is true…

    Then landing page relevancy is really only:

    30% x 10% = 3% of the quality score?!!

    That can’t be, can it? Google prides itself on Relevancy so, how can this possibly be I ask you? I hope I’m wrong on this.

  2. Tarla said,

    on March 13th, 2009 at 8:10 am

    I’m having serious flash backs to high school algebra. Thanks for the reference to that video, I actually just about doubled my knowledge of PPC (I guess it wasn’t that strong to begin with). Good thing I do SEO

  3. Sarah said,

    on March 13th, 2009 at 12:36 pm

    Thanks for the comments! Tarla, glad you learned something.

    And Dan, I think “we don’t exactly know” is important to keep in mind here. CTR is clearly a much bigger piece of the pie than relevancy. And relevancy seems to be more weighted on the keyword to the ad, with the landing page playing a smaller role in the equation.

    After watching this video myself, I referred back to the AdWords Help Center. But clicking on the anchor text links to try to dig deeper led me around in a circle, not revealing much more (not surprisingly). For what it’s worth, check out the AdWords Help page on Quality Score.

  4. Dan PPCPROZ said,

    on March 13th, 2009 at 10:22 pm

    Sarah,

    Following you on twitter now, nice to meet you.

    @ppcproz

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