Fundamental economics of the Adwords ad auction

Published on Aug 04 2010 under Online advertising & PPC, SEO/SEM

If you’re starting with Adwords, it won’t be long before you wonder how the nuts and bolts of the pay per click (PPC) pricing mechanism fit together. What this video lacks in pizzaz, it makes up for in content. It’s 9 minutes of your life but if you’re a client using PPC advertising (or need to explain the Adwords fundamentals to a client) it’s a must watch.

The only small comment I would make is that I believe the price paid is actually 1p (or $0.01 in the US) higher than the bid that’s been beaten rather than exactly the beaten bid price as Hal says. See more detailed info on the Google Help page about what you pay on Adwords.

You must be logged in to post a comment.

Adwords advice