CPC vs bidding
So I have recently been using google AdWords, but I find something strange. My keyword bid is set to $5, but I am only being charged $0.89. I figured that my cost would be $5 per click. How does it actually work?!
The bid is the max amount that you are willing to pay for a click. The actual amount you are charged is typically lower, occasionally much lower. The reason is that the game is auction based and a lot depends on the number of your competitors and how heavily they bid against you. For more details, please visit the help page linked-to below.
*** Auction ***