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How is the cost per click calculated?

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

Fairly high cost per click associate with a key word I'm looking for

Re: How is the cost per click calculated?

Explorer ✭ ✭ ✭
# 2
Explorer ✭ ✭ ✭

Google's chief economist Hal Varian explains it in a one-minute video. Basically, they multiply the bid and QS of the advertiser below you and divide by your QS. So, if

 

competitor bid = $0.30

competitor QS = 7

your QS = 6

 

your cost = 7 x 0.30 / 6 = $0.35 if you bid at least that much.

 

Note this is simplified. QS are actually many decimal places.