One factor the AdWords system uses to calculate an ad’s actual cost-per-click (CPC) is the:
cost-per-thousand impressions (CPM) of the ad showing one position lower on the page
maximum CPC bid of the ad showing in the #1 position on the page
location targeting of the ad showing one position lower on the page
maximum CPC bid of the ad showing one position lower on the page
Your actual cost-per-click (actual CPC) is the final amount you’re charged for a click. You’re often charged less — sometimes much less — than your maximum cost-per-click (max. CPC) bid, which is the most you’ll typically be charged for a click. Actual CPC is often less than max. CPC because 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. Keep in mind that your actual CPC may exceed your max. CPC if, for example, you’ve enabled Enhanced CPC or if you’ve set a bid adjustment.