Sometimes it makes sense to go straight to the horse’s mouth if you want something explained clearly and correctly, and today, we’re going straight to one of the top horses in Google’s stable. Hal Varian is Google’s chief economist, and unlike what you might expect from someone with the title of “chief economist,” Hal’s presentations are very accessible and easy to understand (they do get more complicated later on, but we’ll cross that bridge when we come to it).
In this video, Hal explains in very basic terms how the Google Adwords auction system works. It’s short, but it covers bidding, Quality Scores, Adrank and cost-per-click (CPC), and how those last three are determined.
