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How the Google AdWords Auction Works

What is Google AdWords?

What is AdWords? Google AdWords is the Google advertising system in which advertisers bid on certain keywords so that their clickable ads appear in Google's search results. As advertisers have to pay for these clicks, this is how Google makes money from the search. This graphic will help you understand how AdWords works, by specifying the AdWords bidding process, and by explaining important factors such as quality and cost-per-click. If you ask "How does AdWords work?" This graphic is for you!

Does AdWords work?

Does Google AdWords work? Depending on the competitiveness of the keywords you offer and the relevance of this keyword to actual conversions for your business, AdWords may or may not work for your business. For the most part, we've found that Google AdWords is extremely effective for many types of businesses, as long as they do not waste their money on bad keywords, or write dubious and low-CTR ads.

How much does Google AdWords cost?

Many factors can affect the cost of AdWords advertising for your business. Learn more about these costs, bids, and the average cost per click for advertisers in our guide on "How much does AdWords cost?"

How to Advertise with Google AdWords?

Companies can advertise on Google by opening a Google AdWords account. Learn more about how to get the most out of Google AdWords here. Or follow the proven path to AdWords success in our "How to Use Google AdWords" graphic design.

How do AdWords bids work?

The current position of your ad is determined by your Maximum Bid times Quality Score. The highest public ranking will be the 1st advertising item. Your actual CPC will be determined by the ranking of the next highest ad below, divided by your quality level. The only exception to this rule is when you are the only bidder or lowest bid in the AdWords auction; Then you pay your maximum bid per click! The AdWords auction severely penalizes advertisers who offer poor quality scores. Conversely, those with high-quality scores get higher ad rankings and a lower CPC.

How many times does a Google auction run?

The auction is put billions of times each month of execution. The results are such that users find what they are looking for ads that are relevant to advertisers connecting with potential customers at the lowest possible prices and Google rakes in billions of dollars in revenue.

How does the Google auction work?

Once a query is made in Google, the searcher processes the request and runs the auction then determines the positions of the ads and each CPC advertiser.

How do I enter a Google auction?

Your ads are eligible to be entered into an auction as long as you make bids on keywords relevant to the user search query. Your offerings, Quality Score and relevancy will come into play in determining if your ad qualifies to show up on the SERP.

What is introduced in a Google auction?

Once advertisers identify keywords they want to bid on, Google enters the keyword of your account that you consider most relevant to the auction with the maximum bid you've specified, as well as the associated ad.

What is CPC?

CPC, or cost-per-click, is the amount an advertiser pays each time someone clicks on your AdWords ad.

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