How Does Google AdWords Bidding Work?
Learn how Google uses keywords, cost-per-click bids, and relevance to determine which paid search ads to show your potential customers.
Google AdWords allows companies to pay for a top spot on search results pages. You might have seen these ads yourself. The results show up at the top of the page with a small green “ad” icon.
But how does Google decide which ads to show? It’s all based on an online auction in which advertisers bid for certain keywords.
“In Google AdWords (or Bing Ads), an advertiser can bid on keywords. These selected keywords tell Google which search queries to look for and when to show the advertiser’s ads,” explained Kirk Williams, owner of Zato Marketing. “These bids are called max CPC (cost per click) bids, because they tell Google the maximum amount for each keyword that an advertiser is willing to pay.”
Max CPC isn’t the only factor Google uses to choose which ads to display—the quality of your ad matters, too. Williams added that Google looks at other factors that help determine ad relevance. Relevance is taken into account along with the max CPC an advertiser is willing to spend for each click to determine the final price for the advertiser.