What kind of auction does Google Adwords use?

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Just out of interest, if you ever wondered about Google’s very interestingly, but seemingly complicated, form of auction used to bid and charge for Google AdWords, it is a form of ‘Vickrey auction’. That’s where you bid one amount but end up paying an amount based on the bid below yours’ value. In Google’s case they use a quality score so the higher the Click Through Rates for your ads, the higher you rank and the less you pay – so it is well worth putting effort in to optimise your Google AdWords keywords and ads.

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About Gerald Thulbourn

Gerald Thulbourn setup WebSanity in 2004. He has a 1st class honours MEng in Microelectronics & Software Engineering (i.e. he's a techy), 5 A grades at A level (i.e. he works hard) and loves to communicate (i.e. odd for a techy). He hates tech speak, sloppy/badly tested code, and technology for the sake of technology's sake. He loves helping people understand marketing concepts and seeing how their application makes a real difference to their business. In particular he loves training; SEO, Website Analysis, WordPress etc. Read more about us on Google+