How do Bing and Adwords decide which ads rank higher?

[ngenme]

What would stop an advertiser from bidding the same ads 10 times instead of bidding higher?

 

[enlytend]

Google ranks ads based on bid amt * your quality score (which includes your account history, CTR and relevancy for search ads. Display "content network" ad quality score doesn't use CTR.)

Here's the long version: http://www.youtube.com/watch?v=K7l0a2PVhPQ Bing is similar.

As for trying to hog all the ad spots, they don't allow multiple ads. If you try to game them you'll eventually lose your account. http://adwords.google.com/support/aw/bin/static.py?hl=en&topic=28442&guide=28439&page=guide.cs

 

[Winleet]

What would stop an advertiser from bidding the same ads 10 times instead of bidding higher?

They all have algorithms to incorporate 2nd and 3rd place bidders. For example, 2nd place will show up 20% of the time, 3rd will show up 10%, etc. But like the post above, quality score is very important, as well as CTR. That is why they lower your CPC if you have high CTR, because they will make more from 10 people clicking your .20 cpc ad then they will 3 people clicking a .30 cpc ad.

 

[searchsouth]

On Google, you can only have a single ad pointing to a website, which would be the main restriction in this case.

 

[enlytend]

For example, 2nd place will show up 20% of the time, 3rd will show up 10%, etc.

Sorry, but that's not how it works. Your ads can show 100% of the time in ANY position (as long as your budget is sufficient.)

In many cases, the top position isn't the optimal place to run an ad.

 

[Winleet]

Sorry, but that's not how it works. Your ads can show 100% of the time in ANY position (as long as your budget is sufficient.)

In many cases, the top position isn't the optimal place to run an ad.

That is how it works.
Why do you think if you bid lower than the suggested CPC your ads will still get impressions?

 

[enlytend]

Because I'm Adwords Certified and manage campaigns for my clients. I frequently aim for mid-page placements because they produce a better ROI - the first slot is great for branding, but if your goal is direct response, sometimes not the best place for it.

First of all, "suggested CPC" is just an estimate. In real life, CPC gets modified by your quality score (on the keyword level) and by what the competing advertisers are doing. And whether your ad shows 100% of the time, 75% of the time, 50% of the time is more related to your daily budget than your CPC.

If you want your ad to be shown 100% of the time in let's say 3rd position for a particular keyword, all you need to do is bid so that your (bid * quality score) for that keyword edges out that of the ad in 4th position and set your daily budget high enough to to cover all the potential clicks.

Likewise, if you're in top position and DON'T have a high enough daily budget, your ad WON'T receive the maximum possible impressions. It will either show 100% and stop when your budget runs out, or be throttled back and shown once every x number of times throughout the day (depending on the option you choose.)

(These examples are for the Search network. Display is a little different because it doesn't look at individual keywords and has options like managed placements and CPM bids, but its similar in how placements are determined.)