Friday, March 13, 2009 [Tweets] [Favorites]

Introduction to the Ad Auction

Google:

When people think of an auction, they often think of a prize being sold for the highest bid. But the AdWords auction works a little differently, where the winner only pays the minimum amount necessary to maintain their position on the page. That means you’ll only pay the minimum necessary to beat the person below you. In fact, our quality-based pricing system ensures that you’ll often pay less than your maximum bid.

On the other hand, one problem with AdWords “auctions” is that the nebulous Quality Score can force you to pay obscenely high rates for words that no one else is bidding on.

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