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AdWords CPC calculation

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# 1
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Accepted by MosheTLV (Top Contributor)
February 2017

Re: AdWords CPC calculation

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# 2
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Hi @Olli P the best explanation of the Ad Rank system is a video by Hal Varian and it should cover all your questions.  It's embedded in this page:

 

https://support.google.com/adwords/answer/2464960?hl=en-GB

 

This video itself is quite old now, but I believe nothing has changed in terms of how the auction actually works, so it's still relevant.

 

Jon

AdWords Top Contributor Google+ Profile | Partner Profile | AdWords Audits

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Accepted by MosheTLV (Top Contributor)
February 2017

Re: AdWords CPC calculation

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# 2
Top Contributor

Hi @Olli P the best explanation of the Ad Rank system is a video by Hal Varian and it should cover all your questions.  It's embedded in this page:

 

https://support.google.com/adwords/answer/2464960?hl=en-GB

 

This video itself is quite old now, but I believe nothing has changed in terms of how the auction actually works, so it's still relevant.

 

Jon

AdWords Top Contributor Google+ Profile | Partner Profile | AdWords Audits

AdWords CPC calculation

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# 3
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Thank you for the reply @Jon_Gritton.

 

I've seen the video, read the support articles and I know how the Ad Rank calculation works in theory, yet it does not tell us what the actual CPC would be for the advertiser that comes last in the auction.

 

Could you tell me what the CPC for advertiser D would be in my exact example or is this a question where nobody knows the real answer?

 

Best,

Olli

AdWords CPC calculation

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# 4
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Hi Olli,

Not enough data given to answer the question. In most cases, there are more than 4 advertisers bidding on the keyword. That means CPC for advertiser D depends on the ad rank of advertiser E, not shown here.

If there is indeed no advertiser E, There is a minimum ad rank required to show your ad. I don't know what that minimum is, I'm not sure any of us know for certain.

Best of Luck!

 

Pete

 

petebardo -- Deadhead doing AdWords

AdWords CPC calculation

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# 5
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Unfortunately, unlike in the first video and formula calculation, it's no longer that simple (ad rank of the advertiser below, divided by your QS + 0.01) even for the other ads. Hal Varian now says it's "say X, and it would still be enough to outrank the advertiser below". Since the "format impact" appeared in the formula one can no longer calculate it, even by looking at all accounts participating in an auction (assuming that anything like that would be possible).

Calin Sandici, AdWords Top Contributor | Find me on: Google+ | Twitter | LinkedIn | myBlog
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