Learning about Google AdWords isn't easy but it's worth it. Learn the facts that shows you the importance of bidding the correct bid in your correct niche market. Google AdWords is charging some people $10.00 per click, The bid is the amount you're willing to pay per click, per thousand impressions, and per acquisition. Every time your ad is eligible to appear, an auction takes place between different ads. Your bid is the key factor to whether or not your ad gets show and what position will it be shown.
Ranking on the Search Network:
Ads are ranked on search pages based on a combination of the matched keyword's CPC bid and Quality Score. Quality Score is determined by the keyword's click through rate (CTR) on Google, relevance of ad text, historical keyword performance, landing page, and other relevancy factors. Having relevant keywords and ad text, a high CPC bid, and a strong CTR will result in a higher position for your ad.
Ranking on the Content Network:
Ads are ranked on content pages based on the ad group default bid (when there aren't more specific bids that apply), the ad's past performance on this and similar sites, and the landing page quality. However, if you've set a Content bid or a bid for a specific placement, these will overrule the ad group default bid when your ad runs on the Content Network or the placement you've selected. These more specific bids affect your ad rank, so you might consider increasing bids for placements on which you'd like to rank higher.
Bidding Options
Depending on your advertising goals and how closely you want to monitor and manage your bids, you can choose one of several different bidding options.
Focus on clicks: Cost-per-click (CPC) bidding
In campaigns using this bidding option, you set a CPC bid for each ad group or keyword in your campaign. Your CPC bid refers to the amount you're willing to pay for a click on your ad when the ad appears on Google or one of our partner sites.
With CPC bidding, you pay only when someone clicks on your ad. CPC bidding is recommended if you're mostly interested in getting traffic on your site. You have two options for CPC bidding:
Automatic bidding: You set a daily budget, and AdWords works to bring you the most clicks possible within that budget. If you like, you can set a CPC bid limit to ensure the AdWords system doesn't bid more than a particular amount.
Manual bidding: As with automatic bidding, you pay only when someone clicks on your ad. However, this option lets you control your own maximum CPC bids. You can set bids at the ad group level, or for individual keywords or placements.
Focus on impressions: Cost-per-thousand impressions (CPM) bidding
In campaigns targeted to the Content Network, you may choose the CPM option. Instead of bidding and paying only for clicks, you can choose to bid for impressions on your ad, and pay for every thousand times your ad appears. If you're mostly interested in branding and getting ad visibility, we recommend choosing this option.
As with manual CPC bidding, you can set bids at the ad group level, or for individual placements. For example, if you find that a particular placement is more profitable, you can raise your bid for that placement.
Note that when CPC and CPM ads compete with each other in the same Content Network auction, the AdWords system uses a system of effective CPM, or eCPM, to compare and rank the ads. For cost-per-click (CPC) ads, the AdWords dynamic ranking system considers the bid, clickthrough rate (CTR), and other relevance factors. The resulting number is the ad's eCPM, or effective cost per 1000 impressions.
CPM ads are ranked for display according to their CPM bid, competing with other CPM ads and with CPC ads. A CPM ad always occupies the entire ad space, with either an image ad or other multimedia ad, or an expanded text ad. For this reason, you might wish to bid higher for CPM ads than you would for CPC ads.
Focus on conversions: Conversion Optimizer
This bidding option enables you to specify a maximum cost-per-acquisition (CPA) bid for each ad group in your campaign. The Conversion Optimizer uses your AdWords Conversion Tracking data to get you more conversions at a lower cost. It optimizes your placement in each ad auction to avoid unprofitable clicks and to get you as many profitable clicks as possible.
Using historical information about your campaign, the Conversion Optimizer automatically finds the optimal equivalent cost-per-click (CPC) bid for your ad each time it's eligible to appear. You still pay per click, but this feature can decrease the need to adjust your bids manually.
Your campaign must meet the following requirements in order to begin using the Conversion Optimizer:
AdWords Conversion Tracking must be enabled.
The campaign must have received at least 15 conversions in the last 30 days. The Conversion Optimizer requires this conversion history in order to make accurate predictions about your future conversion rate.
The campaign must have been receiving conversions at a similar rate for at least a few days.
Note: Since you set a maximum CPA with the Conversion Optimizer, it's normal for your actual average cost per conversion to be lower than the maximum CPA bid you set.
Impact of Bids on Ranking
Your bid helps determine your Ad Rank. Increasing your maximum CPC can improve the position of your ad.
You always pay the lowest amount possible for the highest position you can get given your Quality Score and CPC bid. To find this amount, we divide the Ad Rank of the ad showing beneath you by your Quality Score, then round up to the nearest cent (we show this part of the formula as "+ $0.01" to keep things simple).
For search pages, Ad Rank is calculated by multiplying the matched keyword's CPC bid by its Quality Score.
For content pages, Ad Rank is calculated by multiplying the ad group's content bid by its Quality Score.
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