listing order based on cost?

[danbot]

I'm trying to get my head around how adwords works in relation to quality score etc.

I'm almost certain that the woman in the google uni forum mentioned that ads are displayed in order of cost. Meaning that the ad listed mine will be paying google more than what mine will if clicked.

Can anyone confirm this is fact? Or is it possible that an ad that is bidding for the same keywords as mine but with a better quality score can be paying half of what i am to be listed at number 1 position when i am number 8?

[ronmcd]

Theres a kind of inverse relationship between quality score and cost per click: as your quality score increases your cost per click will decrease (to maintain the same position), equally if your quality score decreases your cost will have to increase to maintain that position.

So it is very possible for someone to be in position 1 and be paying less than you in position 8. In many cases that is why the person in position 1 can afford to be there, and why when you first attempt to compete with long-running ads for a particular keyword it can be difficult to see how they can be turning a profit. You wont have their good clickthrough history to help achieve a lower cpc.

In many cases though the advertiser in position 1 WILL be paying more, perhaps a larger company with a sizeable advertising budget, someone for whom position 1 is more about branding and prestige than profit margin.

[briggidere]

yep, that is possible.

they could have an excellent ctr and the scores go something like this

max cpc x ctr x unknown variables (not sure about this, but i would be surprised if they didn't have something else in there, being google) = quality score

hope this helps, but anyone else, feel free to correct me if you think i've got it wrong.

cheers

briggidere