About Google AdWords

This video (CNBC - Inside the mind of Google, 2009) shows the success of a Google AdWords customer and the value of AdWords. Google makes 95% of its money here! This video also states that the placement of an ad in AdWords is more dependent on the quality scores than the price bid. Doing everything right in AdWords is extremely important from keyword to ads, to the quality of your website.

According to Wikipedia - The ordering of the paid-for listings depends on other advertisers' bids (PPC) and the "quality score" of all ads shown for a given search. The quality score is calculated by historical click-through rates, relevance of an advertiser's ad text and keywords, an advertiser's account history, and other relevance factors as determined by Google. The quality score is also used by Google to set the minimum bids for an advertiser's keywords. The minimum bid takes into consideration the quality of the landing page as well, which includes the relevancy and originality of content, navigability, and transparency into the nature of the business. Though Google has released a list of full guidelines for site, the precise formula and meaning of relevance and its definition is in part secret to Google and the parameters used can change dynamically.