Google AdWords Select

Since February 2002 the whole there happened a revolution in PPC world.

Before that the higher your bid was, the more traffic you got.

Google introduced the concept of “relevance”.

It both increased relevance for a searcher, and profit for Google.

Google decided to use CTR (click-through rates).

From now on ad position equalled maximum CPC (cost per click) multiplied by CTR. Exact algorythm of course was kept secret. But logic was that the more clickable ad is the most relevant to the keyword.

It was logical: why should Google dedicate the highest place to the highest bidder if anyway nobody clicks it.

Google decided that it is more correct to give the best opportunity to the most relevant ad, with the result that it maximized Google’s revenue altogether. A search engine makes more money if they show the lower bid ads that are clicked.

It was very important. From that time on a small company could have their ads displayed higher than a big corporation’s ones if thay managed to prepare a more tempting offer. Investing more money did not guarantee more clicks. Advertisers had to select keywords carefully, compose ads relevant to them, and create landing pages with a relevant offer.

To conclude, the keypoint of Google Adword Select was: a higher CTR let you ocupy a position at a lower CPC (cost-per-click). Before that, your position always depended upon your bid.

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