Cost per click (CPC)
From The Yaffe Center
It is a type of pricing model where the search engine provider gets paid every time a user clicks on the advertisement. Google uses CPC pricing model where CPC is calculated as:
Google’s CPC = Ad rank of keyword below yours divide by keyword’s quality score + $0.01
In the above example, adv A CPC = adv B ad rank / adv. A quality score + 0.01 = 0.24/1.7 + 0.01 = $0.15 Since there are no ads below advertiser C for the particular keyword they are charged with the minimum bid price of $0.01 to place their ad.
