Min CPC, Max CPC and Avg CPC clarified

Recently we posted about a common misconception regarding Minimum CPC (cost-per-click) and how it is determined. Today we'd like to expand on the theme of CPC, and define the other CPC types that you'll see in your AdWords account.

Minimum CPC - also referred to as Min CPC or Minimum CPC bid:
As discussed in our previous post, a minimum cost-per-click (CPC) bid is assigned to each keyword in your account based on its quality (as measured by its Quality Score). The minimum bid is typically the least amount you can pay per click in order for your keyword to show ads. It is important to note that minimum CPC is set by the AdWords system, and not by the advertiser.

Maximum CPC - also referred to as Max CPC:
Maximum cost-per-click (CPC) is set by you, the advertiser, and is the highest amount that you are willing to pay for a click on your ad. You can set a maximum CPC at the keyword or ad group level. If you're interested in a deeper look at Max CPC, you'll find more information here.

Average CPC - also referred to as Avg. CPC:
This is literally the average amount you pay each time someone clicks your ad. The Avg. CPC you see in your account is determined by totalling the cost of all clicks and dividing that total by the number of clicks.

For example: if your ad receives three clicks, one costing $0.33, one costing $0.38, and the third costing $0.49, then your average CPC for those clicks is $1.20 divided by 3 clicks, or $0.40.

We hope this information will shed a little light on a topic that is sometimes unclear to advertisers, particularly those who have just started with us and are new to the somewhat specialized vocabulary of AdWords advertising.

Posted by Blake, Inside AdWords crew