Factors in Ad Position

How does Google factor CTR?

[pdivi]

My understanding is that when determining your Adwords position, Google factors your 1) max CPC bid, and 2) some measure of historical CTR. On what level do they factor CTR to determine ad placement? Is it...
- by keyword
- by campaign
- by account
...or some combination thereof?

[FromRocky]

There are two types of ad-placements: Search & Content.

Ad placement in search is based on the CTR and max. CPC. of each individual kw.

Ad placement in content is based on the CTR of the ad-group and the default max. CPC set for the ad-group.

[denof]

May I add the question over what time or number of impression the CTR is initially calculated? If I have two impressions and one click through that would give me a CTR of 50%... surely that ad wouldn't rank #1 just because it's new, no?

Thank you!

[pdivi]

Hey FromRocky...very thorough answer and exactly what I needed to know. Thanks!

[Mocksy]

I think you're right denof,

my first day was great so I thought hmmm i'll add a few more keywords, suddenly i'm nowhere to be seen and I've checked my budget etc..