What exactly the FORMULAE used by adwords to rank my ads!

Ads Pleacements Adwords Formulae

[riyaz]

I have a confusion how my ads displayed by google in sponsored search placements.
According to google the new formulae is as such it considers Quality score & Maximum CPC bid. But often iam confused how exaclty they calculate the bids to charge for each position.
I have II different scenarios as explained below.
I scenario:
For example say i have x keyword which has Quality score as Good and minimum bid required to get activate is $0.05 am bidding $5.00 for the keyword and my ad is displayed at First position, the actual CPC charged by google is $0.08.
II scenario:
Say i have y keyword which has Quality score as Good and minimum bid required to get activate is $0.05, am bidding $5.00 for the keyword and my ad is displayed at second position, the actual CPC charged by google is $4.50.

If you look at both the scenarios where Google is charging different which has same sort of quality score & bids.

Please can you explain what exaclty google uses to charge the CPC's.

Regards,

[poster_boy]

Hello riyaz - Welcome to WebmasterWorld!

If you look at both the scenarios where Google is charging different which has same sort of quality score & bids.

The two bids and quality score ratings may be the same, but the keywords compete in entirely unique auctions against, what are likely, entirely unique competitors.

"Quality Score" also encompasses (supposedly) thousands of components - so the combination that may qualify one keyword as "Good" doesn't necessarily have any connection to what may qualify another keyword as "Good".

To be honest, how Google ranks their ads and price their CPCs is largely a mystery... but, you can feel fairly confident that Google wants to rank ads that resonate with consumers and that maximize their revenues higher - while pricing CPCs based on competitive bids and offering some sort of 'discount' the more an advertiser's keyword accomplishes those two goals, while docking some sort of 'penalty' the more it doesn't...