Actual cost-per-click (CPC)

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.

How this works

We combine the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), the max. CPC bid, and the expected impact of extensions and other ad formats to determine Ad Rank. When estimating the expected impact of extensions and ad formats, we consider such factors as the relevance, expected clickthrough rates, and the prominence of the extensions or formats on the search results page. Each advertiser’s Ad Rank is then used to determine where the ad appears and what types of extensions and other ad formats will show with the ad (or whether the ad or ad format will appear at all).
For ads on the Search Network, the minimum Ad Rank required for ads above search results is generally greater than the minimum Ad Rank required for ads beside search results. As a result, the actual CPC when you appear above search results could be higher than the actual CPC if you appear beside search results, even if no other advertisers are immediately below you. Although you may pay more per click, top ads usually have higher clickthrough rates and may allow you to show certain ad extensions and other features available only in top ad positions. As always, you’re never charged more than your max. CPC. bid.

Examples

• If the advertiser immediately below you bids US$2.00, and if that advertiser's ad is the same quality as yours (and has equal-performing extensions and ad formats), you'd typically need to bid a penny more than US$2.00 to rank higher than that advertiser and still maintain your position and ad formats. With AdWords, that's the most you'll pay (about US$2.01), whether your bid is US$3.00, US$5.00, or more.
• If the advertiser immediately below you bids US$2.00 and has a higher quality ad than you, you'll pay about a penny more than what's required to match that advertiser's higher Ad Rank (and still maintain your position and ad formats), but never more than your max. CPC bid (unless you’re setting bid adjustments or using Enhanced CPC).

For certain ads on the Display Network, your actual CPC will be different than described. Learn more about the Display Network ad auction.
More about cost-per-click bidding
Understanding ad position
Watch this video to learn more about actual CPC and Ad Rank