What is CPC?
CPC stands for “Cost-per-Click”. It is the cost of an individual click on your ad; in other words, it is the amount you pay per click.
How Does CPC Bidding Work?
With this type of bidding, you will be setting the maximum amount you are willing to pay per click on your ad. This amount is known as your Max CPC.
Your Actual CPC, however, is the amount you actually pay for a click. It’s based on the ad auction, and will almost always be lower than your Max cost. It will definitely never be more than your Maximum, unless you’re using bid adjustments or Enhanced bidding.
(Competitor Ad Rank / Quality Score) + .01 = Actual CPC
Admittedly, this calculation is a bit confusing… and somewhat meaningless in the face of the estimated bid columns AdWords provides. These columns simplify this calculation for you, so all you really have to think about is the estimated bid for achieving top page position.
CPC bidding is often the default method of bidding for PPC campaigns. CPM, on the other hand, can be a better alternative for achieving high visibility when running media or social campaigns.