smallcompany - 5:35 am on May 28, 2013 (gmt 0)
I believe Google predetermines the price for each query based on the history, and we all know that Google has all the search history of this World by now.
How Google calculate the CPC is there aren't other advertises?
Its algorithm says that the market value of "so and so" keyword is i.e. $0.80 and it goes from there. If there's some or a lot of competition, it gets calculated in. And who knows what else gets calculated in...
Since Google has sooooo much data that it can predict the number of searches for any given term on any given day, it can basically set the stage for how much it will earn in a given month, quarter, year, etc. Great money making machine.
BTW, this video might help a bit about how Google explains the auction: [youtube.com...]
If you're sure you're getting the maximum of possible impressions, you may just keep it that way.
My question is: why I'm getting this warning if my ads are shown? Why ad preview doesn't show ads to me but yes to the users?
For the preview tool, try deleting browser history, and use it while logged out from Google. At the end, you can try with AdWords support, but you may be better with leaving as it is.
And don't waste your time about that +$0.01 as there are so many factors in the calculation. Just switching the searcher's IP from x.x.x.23 to .24 may affect the click price. Run hourly report and you'll see some fluctuations that you won't be able to explain.
I was recently comparing CPC between 3 years ago and now, and while the product prices are absolutely the same, CPC went up to double. Competition is also more or less the same. With letting G have Analytics and Conversion tracker implemented, it knows how much it can squeeze out from advertisers, yet still let them earn something, just enough so they don't think about stopping using AdWords.