Google AdWords Ad Auction

September 25, 2012
3-4 minutes
  • Visualize how Google Ad Auction works
  • Learn how Ad Rank and Ad Position are calculated
  • Role of Max CPC and Quality Score in determining Ad Rank
  • Learn how Actual CPC and Avg. CPC are calculated

Every time users make query in Google, Ad Auction runs in AdWords. Millions of advertisers are bidding every single time to appear in front of potential customers with their offer. All this happens automatically and transparently to users and advertisers within milliseconds. Such powerful machine brought Google around $36 billion revenue in 2011.

For advertisers important to know, that the way how Ad Auction works influences their:

  1. Ad Eligibility
  2. Ad Position
  3. Cost per Click

Google AdWords Ad Auction

In the calculator below you can quickly taste the influence of your Max. CPC and Quality Score to your Ad Rank, Ad Position and Actual CPC. Just try to change yours and competitor’s values to see the impact:

Also, you might want to watch the presentation about Ad Auction by Hal Varian (Chief Economist is AdWords):

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