How the new AdWords ad auction works
Google launched last week an overview of the Quality Score factors as well as the video below with updates on the AdWords auction and Ad Rank, the system that determines the order in which the AdWords ads appear.
Google’s chief economist Hal Varian provides an in-depth and insightful overview of how the ad auction works. Hal describes how the auction system works so that consumers always see the most relevant ads and advertisers get the most value. He also provides insight into the key components of ad rank: bid, quality and formats, and the way all of this works together to determine your ad’s position and cost.