Google adwords are positioned by a value they call quality score. We have a list of factors influencing position of pay per click ads.
Quality Score Variables
- Max CPC – amount you are willing to spend per click
- CTR – click through rate
- Keyword to Ad copy relevance – does your ad match the search term?
- Keyword to Search relevance – similar to keyword matching, influences long tail keyword searches
- Bounce Rate (amount of people who immediately click back from your site)
Variables that set minimum CPC
- Keyword relevance to your landing page
- Keyword relevance to ad copy
- Bounce Rate
Minimum cost per click is also set by trademark terms. If you try to bid on any company name, the CPC is likely to be over $1. Google will allow you to bid on company names and trademarks, but forbids them in your ad text.
Old campaigns with a poor quality score is a tough situation to be in. If the account has a very bad history and low quality scores, it may be better to close that account and start from scratch rather than spend an exorbitant amount of time reviving an old account.
In this instance, Google uses your account history against you.
Read more on the SE Roundtable.