Help! Adwords Noob being slaughtered by Google =(

The formula's correct (though the formatting isn't helping!!)

The first advert has a bid of $0.40, and a QS of 1.8
The second advert has a bid of $0.65, and a QS of 1.0
The third advert has a bid of $0.25, and a QS of 1.5

The bid is multiplied by the QS to get the adjusted bid.

So Advert 1 has an adjusted bid of 0.72
Advert 2 has an adjusted bid of 0.65
Advert 3 has an adjusted bid of 0.375

Hence Advert 1 appears first, followed by Advert 2, followed by Advert 3.

But to appear top, Advert 1 only needs an adjusted bid of 0.66. Since it has a QS of 1.8, this is an actual CPC of $0.3666, which Google rounds up to $0.37.

To appear second, Advert 2 needs an adjusted bid of 0.38, which equates to a CPC of $0.38 (there was a slight rounding error in the initial post).

To appear third, Advert 3 needs to bid their minimum bid, whatever that is (in the example, this was taken as $0.01).


If you're interested in the implications of this, I've blogged on it in more details here:

http://www.epiphanysolutions.co.uk/...e-adwords-quality-score/ranking-quality-score



One more point on this - your minimum bid is in no way detemined by your competitors' bids. It's based on another version of your Quality Score. So if you're minimum bid is more than about $0.05, your QS is probably seriously damaging your campaign - other people are probably appearing above you, and paying less than you to do so...