The Google AdWords system charges advertisers every time someone clicks on one of the sponsored listings within google or Google network search results. One of the factors that is used in determining ad position is what is known as "click-through-rate" or CTR. Theoretically, if you have a higher CTR (more people click on your ad per impression), you will be able to bid less in order to appear in a high position. Conversely, a lower CTR requires an advertiser to bid more in order to keep a high position. This is not the only factor involved in ranking sponsored listings - bid amount and quality of the landing page also are very important.
Last month, there was an interesting question at the Search Engine Watch forums about the CTR and how it may be adversely affected if your ad is seen on more than one results page and not clicked on. The question was:
I've noticed that when you dig deep into the often unchartered territory of pages 2 onwards of Google search results, eventually you start seeing adverts from the same advertisers as on earlier pages...So, when this occurs are you registering two impressions (or more) from that one set of search results?
This seemed like a plausible concern, since in some cases the CTR might be the only factor that differentiates one advertiser from another. Fortunately, Google's official "AdWordsRep" came in and clarified everyone's questions. The bottom line, it turns out, is that the additional impressions do count. However, the other advertisers are also subject to the same impressions; therefore the issue should be mute.
What do you think? Read the thread at Search Engine Watch Forums.