Google AdWords Placements

The Search Engine Roundtable has a good post about Google AdWords giving some details about the placement mechanism, which were partly new to me. Most people already know that the placement for Google AdWords is based on _Click-through-Rate x Cost-per-Click_. This gives Google most money for every link really. What was new to me is that on the right side of the search results, the position is decided based on _Maximum CPC x CTR_ , which means that if you bid 2 EUR for a search term but only pay 25 cents as the next bidder is paying 24 cents, you will likely be above them even if your CTR is lower. This makes monitoring certain terms even more important. To end up at the top of the search results, you need to have very good CTRs and the other thing that will count, to a lesser extent though, is your real CPC.