Overview: AdWords ad groups can have keywords, placements or both. The keyword and placements that you choose, along with your campaign settings, determine where on the content network your ad can appear.

This lesson will discuss how your keywords, placements and campaign settings interact with each other to find the right placements for your ad. Remember that only the content network is targeted by both keywords and placements. Search results are targeted by keywords only.

You'll begin any new AdWords ad group with either keywords or placements. Many people prefer to start with keywords, but the choice is always yours. After a new ad group is created, you can add more keywords or placements (or both) by clicking the appropriate tab on the ad group page. You can also remove keywords and placements at any time.

In other words, you have three possible ad group combinations:

• keywords only
• placements only
• both keywords and placements

The rule to remember is this: keywords always do their work first. When an ad group has keywords, the AdWords system always starts by looking through every possible page in the content network to find content that matches those keywords. Only then does the system check to see if any of those content pages match your placements.

This means that if a placement that you choose isn't a good match with your keywords, your ad won't appear there. (If you don't want keywords to be involved, create a separate ad group or campaign with placements only.)

This also means that when you combine keywords and placements, the main role of a placement is to let you change your bid when your keywords put your ad on that placement. If you know that your keyword-targeted ads perform well on a certain website, you might choose that site as a placement with an increased bid to give your ad a better chance to appear there. For a very advanced feature, you can also insert different destination URLs when your ad appears on your chosen placements.

If you choose 'Relevant pages across the entire network', your keywords will be used to place the ad anywhere on the content network, whether you've targeted those placements or not. If you choose 'Relevant pages only on the placements I target', your ad will appear only when keywords match your ad to a placement that you have selected in your ad group.

Here are how some combinations of keywords, placements and campaign settings will place your ads on the content network. (The search network, remember, is affected by keywords only.)

Keywords only + 'Relevant pages across the entire network'

• Your ads can appear on any content network page where the content matches your keywords.
• You've chosen no placements, so they don't affect this ad group.

Campaigns that target the content network can take cost-per-click (CPC) or cost-per-thousand-impressions (CPM) pricing. This is true whether keywords, placements or both are used to target your ads. However, CPM pricing can be used for the content network only. Campaigns that target Google search along with the content network can use CPC pricing only.

When a placement is targeted by both keywords and a placement, the placement bids will take priority. If an individual placement bid has been created, that will be used. If not, the ad group default placement bid will be used. If no placement bids have·been made, then the content network bid from your campaign settings page will be used. Finally, if none of the above apply, then your ad group default bid will be used. If you have made individual keyword bids, they will be combined with the ad group default bid as they normally are in determining pricing and ranking for contextually targeted placements.

To put it in order, from highest priority to lowest:

1. Individual placement bid
2. Ad group placement bid
3. Content network bid
4. Ad group default bid (combined with individual keyword bids, if applicable)