All other things being equal, if you’ve set a maximum cost–per–click (max. CPC) bid of USD $1 for your ads, and if the next most competitive bid is USD $0.50 for the same ad position, what is the actual amount you’d pay for that click?
A) $0.51
B) $1
C) $1.01
D) $0.5
Explanation:
If you keyword in the planner gives you no minimum bid, it implies that Google has not yet received enough searches (as per their internal criteria) to suggest a bid to you.
So when you say, you will set a minimum bid for such a keyword (whatever the figure), you will not be charged that bid amount. The Cost per Click (CPC), is always calculated basis the cpc incurred by the ad copy above you (in terms of ad position) on the SERP.
You are actually charged just 1 cent lesser as compared to the CPC bid for the ad above you. You can understand this by looking at the CPC, Clicks & Cost columns in the Interface. You should ideally see that the CPC’s your keywords have incurred are lower or almost the same as the Bid you have set for them.
Setting your bids it’s important to understand that your bid and actual cost-per-click you pay are two different things. Your actual cost-per-click (actual CPC) is the final amount you’re charged for a click. It’s usual lower and sometimes significantly lower than your bid.
With the AdWords auction, the most you’ll pay is what’s minimally required to hold your ad position and any ad formats shown with your ad, such as sitelinks.
In this case, the next highest bid is $0.50 for the same ad position. So, the minimum required amount to hold your ad position is $0.51.
Note that sometimes depending on your bidding startegy (ECPC for example) the amount you are charged per click could be even higher than you max CPC bid.
