Description:
Ads on Google Adwords work on auction. You select certain keywords to display the ad on, quote a bid price for the keywords, an auction is done and whoever quotes the highest bid wins the place for the keywords. Others too win a place if their price bids were closer to the winner. This price is the cost people pay each time someone clicks on the ad. While setting a bid strategy you must remember 1) How much you expect to earn from each click that was made (what is the probability that the customer who clicked will also buy from you) 2) Which keywords are best for your business and 3) if your ad is high quality and will bring in more clicks or not.