Google’s Hal Varian Explains How Adwords Works
05.28.2009
Forget about NSFW videos starring Playboy playmates and a Quiznos sub. This what passes for porn here at ChasNote headquarters: Hal Varian, Google’s Chief Economist, explains how Google’s ad auction creates relevant and high-quality advertising results by multiplying bid price (the maximum CPC the advertiser is willing to pay) with a quality score that takes into account click-through rate, relevance of the message and quality of the advertiser’s landing page.
Google quality score (QS) is one of the most important metrics in AdWords and can be the most difficult to grasp since the big G never reveals the algorithm behind it. Google can ’slap’ you with a low quality score without even knowing why.