The position of the paid search result in google is determined by Quality Score.  A high Quality Score brings your advertisement  in a higher position and at a lower cost-per-click (CPC).   Quality Score is used in several different ways, including:

• influencing each keyphrase cost-per-clicks 
• measuring the first page bids that you see in your account
• determining if a keyword is eligible to enter the ad auction that occurs when a user enters a search query.  The system will display first 10 results with higher Quality Score
• affecting position you ranked in search engine

In general, the higher your Quality Score, the lower your costs and the better your ad position.

Written by Eugene Wong on March 9, 2009.