Google Explains How Search Ads Rank & Cost

Mar 12, 2009 at 9:31am ET by Barry Schwartz

The Inside AdWords Blog posted a video from Google’s Chef Economist, Hal Varian. The video shows how Google prices and ranks search ads in the AdWords system based on quality and bid. This is a really basic overview of the AdWords model, but I personally find the video to be incredibly easy to understand and great for beginners or for SEMs to show clients who are beginners.

Here is the video:

Related Topics: Google: AdWords

About The Author: Barry Schwartz is Search Engine Land's News Editor and owns RustyBrick, a NY based web consulting firm. He also runs Search Engine Roundtable, a popular search blog on very advanced SEM topics. Barry's personal blog is named Cartoon Barry and he can be followed on Twitter here. For more background information on Barry, see his full bio over here. See more articles by Barry Schwartz

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One Comment on Google Explains How Search Ads Rank & Cost

PPCPROZ, March 13th, 2009 at 3:02 am ET:

Relevancy of the landing page is only a small part of the landing page formula, did you catch that? We don’t know exactly how much power this carries, but my guess is 30%.

If that is true…

Then landing page relevancy is really only:

30% x 10% = 3% of the quality score?!!

That can’t be, can it? Google prides itself on Relevancy so, how can this possibly be I ask you? I hope I’m wrong on this.

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