Introduction to the Google Ad Auction

[MendiolaJacob]

Eat my oreos



[kwong37photography]

A great PPC site from only .1 cents.... get lots of traffic and visibility at

healthbull. com ---- official health and fitness site used by many celebs and among others!

[hjifgraa]

My favourite bit is 4:15 :)

[standoutuk]

Regarding the final scenario, what happens if people are not all bidding the same amount? Does their ranking change retrospectively and with that, the cost?

[sacramentocab]

Sir you are excellent for explain things i am using Adwords from last 5 years and it was always complicated for me so finely i got my answer thank you

[johnnydoggs]

How do they figure the Quality score?? Is it a difficult math formula?

[jobiegler]

Thank you for this Video! It is a really simple explanation of how adwords is working, i learned a lot from it!

[jmwwd]

Sorry can't get past the "we have three sluts" part. :-) "Each slut", "three positions". Sorry. I'll get through the vids, just need some time to recover from that, Hal, :-)

Papito

[glacierdigital]

Fantastic, straightforward look at the AdWords system.

[eva4tinto]

Great video - but still I miss something: There is the happy user, the happy advertiser and happy Google - but where is the publisher (me!) who uses Google Adsense to monetize his valuable content?

[MrSimon2158]

is any one here intrested in managing a google adwords campane if u r please let me know u can E-mail me at simon2158@yahoo.com im looking for some one who know's what hes doing

[DeafTuber]

THANK YOU FOR THE CLOSED CAPTIONS!!!! Great video, thanks so much for making it watchable for the Deaf as well. Means a lot.

[busyleavemsg]

hv an exam tmr~~~hope it is useful haha ^^

[malginskas]

Thanks for a brilliant video. Now it is absolutely clear for me!

[rDmarsden]

Thanks for this it is easer to let you explain this than explaining this continuous auction to my family

[rDmarsden]

Thanks for this I just used this to explain to my father about the new auction every time there is a search.

[DeafTuber]

@rDmarsden It's not every time there is a search. These are Adwords which only show on either the top of the search engine page or the right sides, only. You also see them sometimes on other folks websites. But he's only talking about the Sponsored Ads, and not the results that come up in the middle of the page when you do a search. Hope this makes sense. :-)

[Edelkane]

I cannot believe that every time a query is run on Google that an auction takes place. I can only imagine how many thousand times per day auctions are happening everywhere around the world or the software which is used to back it up. Truly eye opening

[DeafTuber]

@Edelkane No, not every time a query is run. He is only discussing Sponsored advertisements which you only see at the very top of the Google's results page and on the right sides. The content in the middle is not paid for, it comes up 'naturally' on its own without the webmasters paying for that. It's free traffic in that case. Hope that made sense ok. :-)

[cakeeter]

I want to sell or lease my home in Las Vegas - would this system work for me? Or would I be out weighted in this calculation by the large real estate companies?

[gladysbailey]

@cakeeter This system will work for you. Since you will be able to target specific audience to receive your message. You can out perform large companies using keyword selections that larger companies ignore because of low traffic. Low traffic tends to be identified as below a certain threshold. In many cases, less than 50,000 monthly searches. Good luck.

[joepr1987]

leer alles wat je moet weten van google adwords

paypro.nl/producten/De_Geheime­_Adwords_Code/772/10889

[avnermiz]

I am confused by the ranking system. Let's say you have 3 people with the following characteristics

A = bid price of $1, quality score of 9, Ad Rank of 9

B = bid price of $1, quality score of 5, Ad Rank of 5

C = bid price of $1 quality score of 3, Ad Rank of 3.

A is #1 rank and pays 5 (B's Ad Rank) divided by 9 (A's quality score) or $.56

B is #2 rank and pays 3 (C's Ad Rank) divided by 5 (B's quality score) or $.60

So A is higher but B pays less??

[CharterBusLinesBC]

@avnermiz yes!



[romkyns]

Every time he says "Google wants better experience" I just hear "Google wants to make money". Come on, it's common sense, it's obvious, it's fair, why not just say it out loud!

[jagodag]

@romkyns

but they need better experience in order to increase profits..

[creamnblack]

Really really interesting.

[altasmarketing]

Did any one notice that the lowest quality score in this example got the lowest CPC?

[jimjim]

@altasmarketing

Yes but this was just for illustration. It doesn't happen in a real auction or if it does that spot would be pushed so low that it doesn't get any clicks.

[MrRobertAReynolds]

@altasmarketing - but they also received a lower ad position which likely resulted in less clicks, which meant less opportunity for that business to get a new customer.

[RedBullEdit]

Anyone else notice the stain on the guys shirt?

[activecx]

Very helpful, thank you.

[oriol1986]

Really, really clear. Thanks for the vid :)

[aworden]

First, why on earth would they multiple the bid by the quality score? That's just plain dumb. If a customer agrees to pay x per click, then charge that! Stop confusing your customers with a 'black box' payment model.

Secondly - it can't be this simple or new ads (with no click thru coz they're new) would never get displayed because their quality score would be so low.

[uhohlookwhoshere]

@aworden Read about "Vickrey Auctions" on Wikipedia. It will explain why the bidder does not pay the exact amount they agreed to. About the ad ranking algorithm, I'm sure it's extremely complex and uses many more variables then the ones mentioned.

[BPLMarketing]

Nice straight-forward explanation - thank you.

[casanovamit]

Very well explained. I am a newbie in this field and this tutorial is really helpful.

[mdwebcon]

What can I say. He is the best. I have read his books „Intermediate Microeconomics“ and „Microeconomic Analysis“. Thank you for sharing the information. I have one question concerning the quality score. Are you using 60% for CTR, 30% for Relevancy and 10% for Landing Page to calculate the Quality Score?

[creep276]

Nice improvement. I just won a new laptop on BozBids.com yesterday. Will be trying out the new improved software as soon as it arrives.

[pavkey88]

Explained PERFECTLY. Well done

[BlueCrabMedia]

This is a great straight forward approach to ad auction..

[stephroberts85]

This is a brilliant introduction to ad words and makes it so clear and easy to understand. This tutorial really helped, and is really useful in explaining how it all works, especially in relation to cost. The only thing i would say is that it would be helpful if it explained how to increase your quality score.

[mbw82ag]

@Nasdaq7 Google Business has another video where they repeat that QS is not affected by Match??? Go figure

[IKingMegaman]

2:33 for quality score

[SamediaMarketing]

Great Upload - Thanks For Sharing

[SolarControlLLC]

Mr. Varian does a great job explaining the basics of Google's Ad Auction.

[MTT2RC]

日本語でもこんな詳しい説明があればいいのになぁ。

[AnalynBucabal]

Since everybody is keen in articulating their particular non-sense, I just want to say that this is probably the simplest and best explanation about how cost-per-click (CPC) bid and Quality Score work.

I know that because of the readers' comments, not because I had actually watched the video.

But I will. Soon. Now.

I also want to say that this a (temporarily) hacked account, so don't bother to reply.

[simonruderman]

Yes, yes, yes I offer $10 per click, my competitor $3 with a great content and I am sure the $3 will go firs, and that the way the make billions. Give me a break

[leonardow3]

Great Explanation, I would like to make a Spanish version for the people that doesn´t understand it in English, The Latin American market needs Google AdWords a lot!

Great Job Mr. Hal Varian!

[C351F806]

MarcBoers Why does Hal Varian of Google use another Quality Score (for example 24) than Adwords (7/10)?

[C351F806]

@corax99 Thank You! You are right. And yes I once got 10/10. I had to remove it though because the keyword was the name of a competitor of my client. The competitor complained and my client did not want to cause to much trouble. I also have many keywords with quality score lower than 7/10!

[jspats232323]

One of the simplist videos ever on Ad Words

[MrAdrianKey]

This video is probably the simplest and best explanation of Quality Score that I have seen. A must watch for every AdWords advertiser.

Adrian Key

Editor of AdWords Adviser, making AdWords more profitable for you

[aprimic]

So adverts like Runescape are likely to give less money cos they're more well known thus have a high ad rank and quality ads

[MrVIDEOPUSH]

i belive every seo marketer should see it. but i am not sure they are intrested

[sheiwahtan]

This is an excellent video, it does help to explain quality score too!

[nawixi]

ho not only writtes amazing boooks for students, he is really good at game theory, this system gives an incentive to bid high and have relevant content, just brilliant from the economics point of view

[OKREDHOT]

thanks for your book "intermediate microeconomics", as student in management, it helped me a lot for my studies.

[TubeVentures]

very interesting

[carrefour340]

Dommage ne ne comprends bien l'anglais , regardez le concept victory telecom sur ma vidéo

[wiseye61]

hal looks like bill gates.

[Stuff2ResellonEbay]

very good tips

[brunocelidonio]

That is just an amazing video...helped me a lot to understand the tool!

[litnight]

This was a great video. Saved me from reading 30 pages. (I'll read them anyway, but now I'm going in with at least some knowledge about how this works).

[Kibutztv]

lol 04:11

[ekasbury]

Awesome video. Very informative. And I was thanked for giving my attention at the end - nice touch. :)

[zactheprick]

excellent video very informative and hope these tips will help my marketing.Used a company called dotcomchrome who have proved to be a scam only wish i had looked on youtube first once again thankyou i will be adding you to my favourites

[strive4impact]

I think the video is a great explanation. Unfortunately, I've been really disappointed by the quality score issue because no matter how much I'm serving relevant content, Google seems to think my ads are somehow less useful than others who are writing spammy ads and even spammier landing pages.

[almsfsdjgx]

Nah, I don't trust this video, it is all a deception.

Google uses MAGIC :D

[lg123xyz]

I like the way Google makes the presentation with pictograms...just like how they train dolphins at the zoo.

[always366]

I'm interested in more information

[wolfkatt]

it's amazing how many ppl make comments about something they have no clue about and/or doesn't apply/affect them. This is the best and simplest explanation I've seen yet and I have spent years in the SEO/SEM/SEMM field. What's more amazing is the comments from people here who have no interest actually WATCHED it. Jeez, get a life.

[reppinNW]

Pie chart placement fail 3:10

[theycallmestevee]

LOL

[Mortgageman2006]

Just shows how they screw us all. Where is the info on how they rate your content? Just more gobbygup

[KnowYourTeam]

they screw us out of what exactly? i can't recall every paying Google any money for anything

[linquish88]

seriously.i no nothing about bidding in adword before watching this video.

thanks Hal Varian

[trik66666]

mega

[bulliethepirate]

How is the min price for a particular keyword is determent ?

[JFBelisle1983]

Well-explained and straight-to-the-point, now I can understand the utility of the microeconomics courses I've done.

[acconytube]

I find your comment offensive, but perhaps that's not surprising considering your username.

[acconytube]

Einstein said there are two measures of infinity: the universe & the extent of human stupidity. You've proved him correct. But then again he was a jew so I suppose he was just part of your paranoid global conspiracy.

[ZionismIsRacism]

Wow! You ARE an anti-Semite!

[Promopti]

Very well explained. Simplicity at its best !

[2bethewinner]

I have to give it to him....

Nice explanation. Helped quite a bit. THX!

[u0tube0video0critic]

why is this guy wearing a bill gates uniform? lol

[DirtyMidgetStudios]

Bill gates is awesome, his company sucks tho. Lawl :P

[mistertuber]

wow i bet this guy is one rich mofo. BE warned people google adwords makes alot of money for google. You will make zero to none.

[smallbizonlinecoach]

Brilliant explanation on how Adwords ranking and pricing works. Simply brilliant!

[Philjleo]

Quality score is heavily determined by CTR., so guess what happens if your CTR diminishes?

[spoold1]

Thanks for this great video!! It will help me explain to my clients even better how the auction works! Great work!

[Shawnch]

great video. very well explained!

[tuexitoenlared]

excelente explicacion. thanks!

[opensourcefilms]

The major problem with this model is that it favors well-known, established, recognizable brands. Because CTR is over 60% of Quality Score and because famous brands have higher CTR's due to brand recognition and established trust (not ad relevance) they are given an unfair advantage over other less-known advertisers.

[westsideeh]

opensourcefilms,

That is not a problem at all, given users are more interested in results from big brands they know of than unknown brands..

[GloballyLocally]

Great Instructional video!

[MakeaWebsiteNow]

Quality Score is indeed a crucial parameter for advertising on AdWords. Getting a high Quality Score may seem difficult, but it's doable by having the right mindset which is providing relevant ad to the end user.

This video was quite informative and explains the basics of different terms on AdWords. Thanks a lot Hal Varian and the Google Business Team. Just keep up the great work!

Sincerely,

Hooshmand Moslemi

[aviener]

The one thing I would have liked to have seen him explain is the Pre-Auction where Google looks at ads with the same display URL to determine which one of those ads will get to compete in the auction.

[emillax]

yeah thats what Miami Beach thinks.

[emillax]

Hal, please come to Miami Beach we want to party with you:)

[JPPT1974]

That guy at the beginning kind of looks like, Bill Gates. What do you all think?

[petercarvell]

haha! Definately a microsoft type of guy. Should be in those ads for Mac.

[svtuition]

Most Informative and Educative tutorial by Hal Varian . The way of Instruction is very Simple and I understood the system of Google Ad Auction

Thanks for making Video

[Roblearnguitar621]

lol. Google is still not evil. Whew!

[alpharithm]

This increased visibility into Quality Score has changes the PPC game. Adwords has jumped out of traditional marketing and has leaped head first into the science of PPC. Now that QS is out of the black box, one can learn what influences it and optimize to improve it per KW.

[Guerriero4]

What happens if two advertisers have the same max bid and quality score?

[EdenEdits]

I have learned allot from this video, such an excellent video for a noob like myself just stepping out into the world of internet advertising, thankyou for sharing it.

[OP409]

maybe i'm stupid but i can't get anything in this video

[konno1]

Excellent Video ... Google is not sinister after all

[jnferree]

Confirms that 'Direct Linking" to CB hoplinks will only be good for 2-3 days until you validate the CTR is good enuff to build a LP and get a decent QS with relevant / new content, or am I missing something counter to GCD type programs?

[nwfilmschool]

The content of your video is excellent. I can't help but suggest you get your subject to stand in the light. Or better yet, aim the light at the subject instead of at the white wall.

[elpresidio]

Very clear, straightforward, and informative. This high level of transparency demystifies  CPC ad auction bidding.

[Chick6517]

I like them and this made me feel really happy. I want to make some of these little lovlies and think of Julie and what's her name. This project fills me with love and holiday joy. i will support the home made things! I LIKE THEM

[Isdaron]

Excellent video, thank you for pointing out the basic system behind adwords in such a concise way.

[redflymarketing]

Brilliant video. Well done. Nice to see Google explain the 101's.

Hal, we need more videos by you!

[anneahira]

Absolutely Brilliant!

[guanxk]

oh~~~~~~ I get the picture of it now!! Thank you so much superaffilato. I can't catch that when I first watched the video and thanks for enlightening me.

[WealthSecretsOnline]

Brilliant video - shows you how and why quality of your ads is so important

Thanks

[guanxk]

I don't understand why the advertiser with a lower quality score of 6 ends up paying $2 compared to the personn who is having a quality score of 10 who pays $2.40.

The 1st advertiser doesn't seems to be awarded for his good quality score in this case

[superaffiliato]

@guanxk

The advertiser is paying $2.00 but his ads is showing under the advertiser who is paying $2.40.

In the example he shows how an increased Quality score can lower your CPC so you end paying less while your ads is still in first spot.

Hope this helps

[dennisgorelik]

What if advertiser 4 doesn't agree to pay more than $1/click -- what would be her ad position then?

[hdcont]

Great information thank you so much

[sitecreations]

Brilliantly Done - Now I have a video to refer my clients to when this question comes up. As a Google Adwords Professional sometimes it's great to have these tools to give potential clients independent verification that what I'm telling them is in fact true! More more more!

[gputland]

Absolutely brilliant information!

[superaffiliato]

this was excellent!

[meminho]

Super !!! Tks a lot Mr.

[aray232323]

sooo very helpful!

[dctrex]

Thank you so much for this discussion. Every PPC advertiser needs to see this!