How the AdWords auction works
AdWords determines which ads should show with a lightning-fast ad auction, which takes place every time someone searches on Google or visits a site that shows AdWords ads.
There are 3 main factors in the ad auction that determine which ads appear, and in what order:
- Your bid - When you set your bid, you're telling AdWords the maximum amount you're willing to pay for a click on your ad. How much you actually end up paying is often less, and you can change your bid at any time.
- The quality of your ads - AdWords also looks at how relevant and useful your ad and the website it links to are to the person who'll see it. Our assessment of the quality of your ad is summarized in your Quality Score, which you can monitor—and work to improve—in your AdWords account.
- The expected impact from your ad extensions and other ad formats - When you create your ad, you have the option to add additional information to your ad, such as a phone number, or more links to specific pages on your site. These are called ad extensions. AdWords estimates how extensions and other ad formats you use will impact your ad's performance. So even if your competition has higher bids than yours, you can still win a higher position at a lower price by using highly relevant keywords, ads, and extensions.
Together, these 3 factors determine when and if your ad will appear to potential customers.
Learn more about how bidding on keywords can help you create a cost-effective campaign.
Sign up for an AdWords account today and follow along with this guide.