How Does the AdWords Auction Work?

Yesterday WordStream released another of their really useful infographics, this time explaining How the AdWords Auction Works.

It can be tricky explain exactly what Google AdWords is, let alone trying to explain the technicalities of how it works. You can explain that AdWords is an auction, but it is not as simple as the highest bidder gets the highest position.  There is a calculation that determines the position that your ad will be displayed. One element of this calculation is your cost-per-click bid, this other is Quality Score which is determined by numerous factors, some of which Google do not disclose.

This infographic from WordStream provides a clear illustration of how the AdWords auction works including, when your keywords will be entered into the auction, the position in which your advert will be displayed on the Google search results page and how Google determine how much you pay for a click. Remember you do not always pay the maximum CPC you have bid for a click and the unique nature of the AdWords auction means that it is possible to pay less than your competing ads to gain a higher position.

Please follow this link for a larger version of the image – How the AdWords Auction Works.