Google AdWords: Learning Center

Maximum CPC refers to the maximum amount you are willing to pay for a click on your ad when the ad appears on Google or one of our partner sites. Your maximum CPC and Quality Score determine the position, or rank, of your ad on Google and the Google Network.

Google won't charge you more than your set maximum CPC per click. Additionally, we use an AdWords Discounter to ensure that you only pay the minimum amount necessary to maintain your ad's position relative to other ads on the search results page. Quality Score and the AdWords Discounter will be discussed in more detail in the next topic on ranking.

Quality is the most important factor in determining the cost you'll pay when someone clicks on your ad. Your Quality Score (which is determined by your keyword's CTR, relevance of ad text, historical keyword performance, and other relevancy factors) sets the minimum bid you'll need to pay in order for your keyword to trigger ads. If your maximum CPC is less than the minimum bid assigned to your keyword, you'll need to either raise the CPC to the minimum bid listed or optimize your campaign for quality. For more information on optimization, please visit our Keyword Optimization lesson.

It's important to remember that the higher the Quality Score, the lower the minimum bid and cost you'll pay when someone clicks on your ad. Therefore, the best way to drive your advertising costs down is to maintain high-quality keywords, ads, and campaigns.

Content clicks may be priced differently than search clicks. Using smart pricing, Google can automatically adjust the cost of clicks for ads that appear on content network pages. While you set one maximum CPC, if our data shows that a click from a content page is less likely to turn into actionable business results - such as online sales, registrations, phone calls, or newsletter signups - we reduce the price you pay for that click.

For example, let's assume you're running an AdWords ad for digital cameras. One of our content partner sites displays your ad. The first page of the site is an article about photography tips; the second page offers digital camera reviews. Because digital camera reviews is more product-specific than photography tips, a user who clicks your ad on this page is more likely to make a purchase than a user who clicks your ad on the photography tips page. In this example, Google will reduce the price of the click on the photography tips page because the estimated value is lower.

Your daily budget is the amount you're willing to spend on a specific campaign each day. We'll show the ad(s) within a campaign as often as possible to meet your daily budget.

It's important to determine your advertising goals when setting your daily budget, such as the amount you're willing to pay and your audience. To help you set a daily budget that will maximize your ad's visibility, Google provides daily budget recommendations. These recommendations are based on historical click data for the same or similar keywords that you choose for your ads, among other factors. If your daily budget is lower than the AdWords recommended amount, your ads may not show all the time. Should this happen, we'll display your ads intermittently throughout the day so they won't stop showing altogether.

Setting your daily budget to the amount we recommend is optional—you're always in full control of your AdWords account and can edit your campaign's daily budget as often as you like.

To view your recommended daily budget and/or change your current one, please follow these steps:

Log in to your AdWords account.
Click the campaign you'd like to edit on the Campaign Summary page.
Click the Edit Campaign Settings link at the top of the page.
Click the Recommended Budget link below your Daily budget field to check our recommendation. If your current budget is optimal, you will see the Budget is OK message. If the recommended amount is higher than your current budget, we'll recommend a new budget for you.
Change your daily budget in the Daily budget field, depending on your advertising needs.
Click Save All Changes.

Overdelivery occurs when one or more of your ads in a specific campaign receive more clicks than the campaign's daily budget allows. Google doesn't charge you for these extra clicks and will automatically issue an overdelivery credit on your invoice for additional clicks accrued.

Our system works to deliver enough ads to fully satisfy your daily budget over your billing period. Because page views fluctuate from day to day due to user behavior and system delays, we may overdeliver ads up to 20% more of your daily budget on any given day to make up for potential shortfalls that occur during your billing period.

For more information on overdelivery, please visit our Billing lesson.