Yesterday, Google announced they’ve updated their AdWords auction explanatory video after almost five years. Both videos, the original and the new one, are by Hal Varian, Google’s chief economist and both are over 8 minutes long.

Here is the new video:

Here is the old video from 2009:

The new video covers:

The key factors behind Ad Rank
How Ad Rank is calculated
Things to consider for maximizing Ad Rank

Google also released a detailed white paper on the model that explains:

How to use Quality Score as a diagnostic tool
Tips for optimizing the components of Quality Score
Key insights about what does and doesn’t matter in terms of the quality of your ads

Forum discussion at Google+ and Google AdWords Community.