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paying high cpc for low ad position

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

In an experiment, i was able to see that for a particular niche, the ad position 1 advertiser is paying around 1$ per click and the 2nd position advertiser is paying 2$ per click, now since the 2nd advertiser is paying more then why his ad position is on 2nd number?

1 ACCEPTED SOLUTION

Accepted Solutions
Marked as Best Answer.
Solution
Accepted by MosheTLV (Top Contributor)
September 2015

Re: paying high cpc for low ad position

Collaborator ✭ ✭ ✭
# 2
Collaborator ✭ ✭ ✭

Hello,

 

It is because of the Ad Rank formula MaxBid x QS. The advertiser who pays more but ends up on position 2 needs to increase the relevancy of his/her Ad texts.

 

Learn about how the auction works from this video :

http://www.youtube.com/watch?v=qwuUe5kq_O8

 

The situation described by you is explained at minute 5 second 26 

 

auction-example.png

View solution in original post

Marked as Best Answer.
Solution
Accepted by MosheTLV (Top Contributor)
September 2015

Re: paying high cpc for low ad position

Collaborator ✭ ✭ ✭
# 2
Collaborator ✭ ✭ ✭

Hello,

 

It is because of the Ad Rank formula MaxBid x QS. The advertiser who pays more but ends up on position 2 needs to increase the relevancy of his/her Ad texts.

 

Learn about how the auction works from this video :

http://www.youtube.com/watch?v=qwuUe5kq_O8

 

The situation described by you is explained at minute 5 second 26 

 

auction-example.png