: I thing that information on how exactly and precisely Google determines cost of any particular click is basically their proprietary algorithm. But general factors that are affecting your ad

@Steve110

I thing that information on how exactly and precisely Google determines cost of any particular click is basically their proprietary algorithm.

But general factors that are affecting your ad position and your actual cost per click are:


CTR
Landing Page Experience (this also consist of the following:
a) Relevant & Original Content;
b) Easy to Navigate (User friendly);
c) Transparent (Privacy Policies, Terms etc)
Ad Relevance
Ad Formats (sitelinks, phone extensions, callouts etc)


These 4 basically form your Ad Rank

Then your Bid + Ad Rank will determine your ad position, thus your actual Cost-Per-Click (since even you bidding higher the actual cost will be just enough to overbid your following competitor)

Here how it is explained by Google's Chief Economist

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