Google Adwords Bidding Process Explained

Way back in the early days of the Internet around 1998-2000, you would just simply setup a Pay Per Clickthe days of the Wild Wild West and anyone back then could make a small fortune.

When Google came on the scene in 2003, it was sort of like this at first. Then over time the costs per click started rising, then other factors came into play like the Google Quality Score. Most amateurs wanting to enter the Pay Per Click Game are doing it all wrong.

2 of the Biggest Google Adwords Misconceptions: Account at Overture, manually load your keywords or use a Spreadsheet and start a bidding war. You could start bidding as low as a penny per click, and you would actually show up close to the top on a lot of keywords. Those were

1. Google AdWords is not an auction where the person who pays the most per click automatically wins. This game is much more complicated than this.
2. The person holding the #1 Position does get the most clicks, however, this is hardly the most profitable position to be in. Right now it's paramount to understand the balance between the best positioning, the number of clicks you want to receive and the price you are willing to pay for each click to ensure maximum profitability.

Google Quality Score Explained
It's possible for someone to bid $.75 per click and get their ad showing higher than someone who is paying $7.50 per click. And if you are just starting out with Google Adwords and don't have some serious mentoring, as well as the ability to understand somewhat abstract concepts, it will be next to impossible for the average person to figure all of this out by themselves.

What Determines Your Google Quality Score?

Your Quality Score is defined by 3 main factors.

1. Click Through Rate - This is how often people click on your ad. This is defined as a percentage of number of total impressions verses ad clicks. The higher your Click Through Rate or CTR the better your ad is and the better score Google assigns it. This dynamic alone makes up 60 Percent of your Google Quality Score.
2. Ad Relevancy - Google will look at your ad, and their Search Engine Spiders will follow the URL at the bottom of your ad to your Landing Page or Squeeze Page. They will check the relevancy of this page, by determining if your target keyword is placed on your landing page, how often it is placed and if it is placed in all of the right places. This dynamic accounts for 20 Percent of your Google Quality Score.
3. Landing Page or Squeeze Page Quality - This process is done not only through the Google Search Engine Spiders but by a manual review as well. The automated part of this process is when the Google Spiders check certain elements of your destination page such as the Privacy Policy, Terms & Conditions and Contact Us page to see if they are present  These pages define a quality website someone would like to visit.

Checking For Bouncebacks

The Google Spiders also check for Bouncebacks. Bouncebacks are basically when a visitor lands on your page and leaves instantly or within a few seconds. Sometimes this is known as the "Bounce Rate". They usually leave by hitting the back button on their browser or just closing their browser. This usually happens because they think your websites stinks or it is not relevant to the Ad Keyword the visitor just clicked on.

When developing your Squeeze Page or Website its imperative that it be totally relevant to the keyword you are bidding on. This will keep them on the site, in addition to capturing leads and making sales for your business. Landing Page and Squeeze Page Quality count for the final 20 Percent of your Google Quality Score.

How to Determine Exactly Where Google Places Your Ad

Yes there is an actual process Google has for doing this. They do this by a process of calculating Ad Rank. Ad Rank is your Quality Score x your Bid Price. The higher your Ad Rank the higher your placement. So as you can see a higher Quality Score will largely determine how high your ad will show up.

How Your Cost Per Click is Determined

Your Cost Per Click is measured by the Ad Rank of the person below you divided by your Quality Score. This is done for all the advertisers on the page except the advertiser in the bottom position. They bid one penny less than the advertiser directly above them.

This explanation might be too technical for many people to grasp at first, however if you follow the logic it makes perfect sense. But the good thing is that you don't really need to understand this. All you really need to understand are two things to get started.

1. As your Quality Score rises, your ad position will rise and your cost will go down.
2. Since Optimizing your Google AdWords Ads counts for 60 Percent of your Quality Score, this method is by far the best single action you can take to move your Pay Per Click Ads higher up in the Search Listings. This can only be done by split testing ads and seeing which ones pull the best. And you can't just look at an ad and tell this. What's not obvious at a glance is definitive upon real testing.

The process of Optimizing Google AdWords Ads can take from a couple weeks to a few months depending on the niche you're in, how much traffic you can get to those ads, etc..