Adwords Pricing Model

Who decides the cost of keywords?

[richardvanhooijdonk]

Can anyone explain to me how Google 'decides' what a click cost on the keywords you enter?

[jbinbpt]

richardvanhooijdonk
"Your CPC is based on what your nearest competitors are willing to pay, so targeting your ads to your specific market ensures that you are competing in the right market and paying only what you need to pay."

You end up paying $0.01 more that the max some one else bids. It's interesting to see on a day by day how much that floats. I have what I thought would be a limited program, low max daily budget and low max bid cpc, but the traffic and position has been great.
jb

[Shak]

[adwords.google.com...]

nice read

Shak