The Online Marketing Blueprint: How to Create an Online Strategy that Works for You by Moubax Thierry

Author:Moubax, Thierry [Moubax, Thierry]
Language: eng
Format: mobi
Publisher: Blue Compass Press
Published: 2014-10-16T16:00:00+00:00

You see that for this example even if Advertiser 1 is bidding the most—five times what Advertiser 4 is bidding—his ads might not even appear.

Important to note is that often the actual cost per click and the max bid per click will not be the same. You may in fact bid $6 but usually in the end pay less. Google will discount your CPC down just to appear above your competitor with $0.01 more. The actual formula to determine this is: actual CPC = Ad Rank to Beat / (your quality score +$0.01)

For Advertiser 2 this is: 20/ (8 + 0.01) = $2,5

For Advertiser 3 this is: 10/ (3 + 0,01) = $3,3

In our example you see that Advertiser 2 is paying less than Advertiser 3 and has 2 positions higher even though he is bidding $6 compared to $4 for Advertiser 3.

It might seem a bit complicated but I wanted to explain this to stress the importance of the Quality Score, hence the CTR. Because improving your CTR you’ll end up paying less—while getting more clicks!

How do you achieve this?

Therefore two key factors are crucial:

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