How many clicks until CTR is valid?

when does AdWords stop using default?

[Steve6]

CTR is used by AdWords to determine in which position your ad will appear. As we know from the tutorial posted in this forum, the formula is something like:

pos parameter = Max CPC * CTR

The ad with the highest pos parameter gets to be #1.

It is not clear how Google does that calculation for a new keyword that has not had any impressions yet, but I gather that it is calculated somehow using the average of other advertiser's results.

My question is when does AdWords stop using this average and start using the actual CTR of the new keyword? Is it when the number of impressions hits a certain number, like 200? Does it gradually fade in the actual CTR and gradually fade out the "industry average"?

Also, what happens when you add a new ad to a group that has established keywords?

Does AdWords use a running average CTR, or does it use the "all time" value?

[mike_ppc]

I heard of a threshold of 1000 impressions, but I'm not sure it matches this case.