Adwords Click-Pricing Algorithm

Or any PPC that offers auto-bid feature for that matter

[dmorison]

Pay the low minimum price for any keyword. Or pay more to get more exposure. Either way, Google's Discounter ensures you pay the lowest amount possible to keep your position.

Let's say there are just 3 advertisers competing for "widgets".

A's max bid is $2.00
B's max bid is $1.00
C's max bid is $0.05

If somebody searches for "widgets", and all 3 ads are selected to be displayed, who pays what for a click?

Theoretically it can be worked out as:

A: $0.07
B: $0.06
C: $0.05

...but I don't think it happens like that, so what's the deal?

[dmorison]

I'd assumed this was an easy one! Nobody?

[bcc1234]

I'd assumed this was an easy one! Nobody?

Hehe. That's a good one :)

[dead_duckie]

I thought you were to pay one cent more than your direct competitor. I assume it should be as follows then:

A: 1.01$
B: 0.06$
C: 0.05$

[killroy]

Yeah, that makes sense too me, would also explain the high threshold to move to a clean 1.0 ranking.

SN

[Smiley]

Sorry don't know the answer, but if you have multiple accounts (many do) then it should be an easy exercise, choose a keyword with no bids and off you go.

[mrutkowski]

Many have multiple accounts?!

I thought that was against Google policy, to prevent someone from having more than one ad displayed on a page?

Mike

[Smiley]

Multiple clients = multiple accounts, I think thats fine.