If we assume an unrealistic scenario where 3 bidders are bidding on the same term with the same quality score and bids as follows:
Advertiser 1: $2.00
Advertiser 2: $1.99
Advertiser 3: $1.00
I understand that the actual cpc will depend on the quality score but I'm interested to find out how the system behaves in a ceteris paribus state. In other words does it discount from bottom to top ie:
Advertiser 1: $1.02
Advertiser 2: $1.01
Advertiser 3: $1.00
or does it go from top to bottom:
Advertiser 1: $2.00
Advertiser 2: $1.01
Advertiser 3: $1.00
In the latter case advertiser 1 has to pay $2.00 because this is 1 cent above the competitor from below, while advertiser 2 pays only $1.01 utilising a big gap.
Many thanks,
Zealot
[webmasterworld.com...]
Doubt it'll answer your question (not sure a Google outsider would know?), but some interesting perspectives...
Zealot
Hope this helps.
[services.google.com...]
Hope that helps.
I replaced the advertisers bids with 2.00, 1.99, 1.00 respectively and fixed the quality score to 1.5 for all advertisers which naturally suggests an equal min. bid of 0.04 for all. Then applying the formulas used in the table, I ended up with Rank # 3.00, 2.99, 1.50, and actual cpc of 2.00, 1.01, 0.04 respectively.
Am I correct in assuming that this is the default behaviour of the bidding engine given an equal quality score?
If we remove the impact of their individual quality scores and just assign them all a QS of 1, with the advertisers bids set at:
Advertiser 1: $2.00
Advertiser 2: $1.99
Advertiser 3: $1.00
The actual CPC for each advertiser would be:
Advertiser 1: $2.00
Advertiser 2: $1.01
Advertiser 3: $0.05
This is a very simplified scenario, but the basic principle remains the same when the quality scores start to diverge. I am also assuming here that the minimum CPC for that term is $0.05, which is not always true.
AWA2
[webmasterworld.com...]
