Hello Friends, I need urgently help: I want to know if I given $0.60 bid on one keyword. How much cost adword cut? Its cut $0.60 or less then my bid? Please replay me urgently
If you bid $0.60 on a keyword, Google will factor that into your position when you display for the relevant queries. You will then pay the minimum CPC that it takes to put you in that position, which is usually less than $0.60, but can vary depending on the amount of competition for the keywords, your QS, and the historical CTR if that keyword (for determining minimum bids).
What you pay depends on your QS and the bid and QS of the advertiser below you. The basic formula is: cost = QS(b) x bid(b) / QS(a) where QS(b) is the QS of the advertiser below you, bid(b) their bid and QS(a) your QS. Since you don't know the bid and QS of competitors, this doesn't really help but that's how they calculate it. Note that QS is not just an integer number you see in your account. It has many decimal points. But let's use an integer in this example. Your bid is $0.60 and QS is 7. The advertiser below you bids $0.30 with a QS of 10. The formula says you'll pay $0.43. If your QS was 10, you'd pay $0.30. If your competitor was bidding $0.50, you'd pay $0.71 but since that's higher than your bid, you'd pay $0.60, your maximum bid. As you see, there is no telling what you'd pay because you don't know what competitors are doing. And it changes all the time, nothing is static. But it's all based on QS. Improve it and your costs go down. QS is also used for ranking. Improve it and your position goes up (towards the first) for the same bid.