I was told........ When it comes to what adsense ads are shown in each block first: 'we go by quality and that is a combination of the bid price PLUS the click through rate which tells how much the ad interests people, and we want the ads displayed first that are most on target and interesting, not the highest paying, that would be a waste to the bidder.'
Absolutely, and so they should. If your $10 bid gets ctr of 10% they earn a dollar. If my better written ad bidding $5 gets a ctr of 40% they earn $2 . they would have to be stupid to show your ad more than my add wouldn't they!
Well it makes sense. We as publishers can't really complain. Heck if it wasn't for the advertisers then we wouldn't be making any money at all, so as long as I get paid for each click I'll be happy.
The OP has a point though, which is that there is a lot of disinfo going around from Google that they always show the highest paying ad, but it isnt always true.
They don't show the highest paying ad, they show the ad that will make the most money.... For Google.
For a long time it was thought and mentioned in this forum that the ad that had cost the adwords bidder the most, was the one that would always be showed first, this wasn't true at all. An ad that had a AdWords bid of $10.00 might pay the Adsense publisher 3 cents when clicked, this ad may be showed 1st, or an Ad that had a AdWords bid of 5 cents may pay out $1.00 to an AdSense publisher when it's clicked, and this ad may be shown first it depends upon a lot of factors, like conversion to sale ratios, the adsense publishers CTR, and many other factors. etc
I have a page that I actually singled out for adsense stats. Get few enough clicks to chart the earning per click. It fluctuates WILDLY, its definitely part CTR and maximum bid. Don't forget, people can set budgets, so its possible that the high paying ad budget finished up for the day, so lower cost clicks are those that are left. I used to do that. Buy 5 cent clicks on adwords. Your ads would only show up well around 9pm-midnight after all the high cost click budgets filled up, but it was worth it. I think google spaces the clicks out better now, so it doesn't work so well anymore.