Knowing how AdWords operates requires knowing about keywords, placements, bids, Quality Score and AdRank.
How your ads are triggered to appear
Keywords are phrases and words you select that can trigger your ad to show up in search and on other sites. If you deliver fresh fish, you could use “fresh fish delivery” for your ad to appear in Google search results. Your ad can also appear on other websites, in the Google Network, that are related to fresh fish delivery. List of keywords that are relevant to your service or product show your ad to the people interested in your service or product.
Advertising on no-search websites are “Placements”
Keywords can also trigger your ads to show on other sites across the internet, sites like YouTube and Google partner sites, such as NYTimes.com. These ads are referred to as “Placements.” A placement can be an entire site or part of a site, a text ad or an image ad, all referred to as the Display Network. Google automatically chooses where your ads appear by matching keywords to websites in the Google Display Network. You may also select specific sites (or placements) that your ads are eligible to appear in.
How Google determines which ads appear in which positions.
If multiple advertisers use or “bid” on the same keyword to trigger ads, how does Google determine whose ads will appear and in what order will they appear in? It is an automatic process, known as “Ad Rank.”
Ad Rank is based on a combination of bid, Quality Score (measure of the quality of your site, ad and keywords). The formula for Ad Rank can vary, but always uses bid and Quality Score. You will always pay the lowest amount for the best position available depending on bid and Quality Score. To determine this amount, Google looks at the Ad Rank of the ad in the next position, regardless of your bid, you’ll only pay the minimum needed to beat the advertiser below you.
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