Google Introduces Click Through Rate CTR

Google changed the ad ranking equation by including your ad's click-through rate (CTR) as a variable. So instead of being able to bid your way to the top, your ad needed to have a good click-through rate too. Google calls this your quality score.

Google Ad Position = cost per click X quality score (relative to the competition)

Google did this for two reasons: 1) to make more money and 2) to show more relevant ads at the top. Their reasoning was that if an ad has a higher click-through rate, it must be more relevant to what the user is searching for.

In essence, your ad is rewarded for having good and relevant ad copy.

In addition to your maximum cost per click and click-through rate, Google also measures the relevance of your landing page to help determine your ads position. This change was announced May 2006.

For more information please visit: AdWords Discounter

With Google you set a maximum bid price or cost per click. This ensures that you will never pay more for a click than your maximum bid. However, that doesn't necessarily mean that you will have to pay the maximum price every time. In many cases, you actually pay less per click because of Google's built-in AdWords Discounter.

With the AdWords Discounter, you only pay one cent above your competitor's maximum bid price. For example, if you're bidding $0.50 on a keyword and your next closest competitor is only bidding $0.25, you only pay $0.26, or one cent above their max bid price. This can save you a lot of money.

Unfortunately, there is no way of knowing what your competitor's maximum bid price is as Google does not display bid prices. So that means there is no way to accurately predict how much you may pay for a click. The only thing that is guaranteed is that you will never exceed your maximum bid price.

Destroying Adwords

Destroying Adwords

Adwords or Pay Per Click advertising is essentially the 21st century equivalent of direct marketing, allowing advertisers to test ideas in hours rather than months. Learn more about Google Adwords and PPC advertising.

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