What would be my Adwords CPC if no other advertisers are bidding that EXACT keywords?

Hi shimul0011,

Unfortunately, it isn't quite that simple.

Google AdWords has standards that apply to search ads. When you create an ad group in your campaign both the ad and the keyword will be graded for quality and relevance, and compared to other advertisers' quality scores.

Your max CPC bid is multiplied by your quality score to arrive at an ad rank score. Your Ad Rank score must meet a minimum standard for your ad to display. This is done to prevent your ad from reducing the potential earnings for the search result page. It is better for Google to exclude ads that would reduce the overall revenue generated from the page, so they do.



The following goes into a more detailed explanation:

Well, in theory, your scenario of four advertisers, you would show up in fourth place. It is the logical answer. But it's never as simple as that.

I think you are assuming that because you bid one cent, you would be the last ad shown. You don't seem to know about Quality Score. As explained, ad ranks are based on bid times QS.

Further, what you actually pay is based on the formula of the next ad's adrank (your competitor's bid times his QS) divided by your QS. Since you are the last ad, what do you use as the QS and bid of the "next" advertiser?

Also, Google is under no obligation to show ads. As dburk said, there are standards and maybe your ad doesn't meet that standard. Google is there to maximize revenues so if it feels your ad would not add to their revenues, they simply don't show it. Simple economics.

There may be other reasons too. As it happens in your scenario, you would be the first and only ad on the right side of the screen, assuming the other three qualify to be on top. Maybe they have a rule so that you can't have a lone ad on the right. There could be of course many other reasons for not serving ads.

Your real question however is what you would pay if you were the only one bidding on a certain keyword.

You said EXACT which I take it to mean a keyword such as "find a store selling round plastic red widgets". You may indeed be the only one using that keyword. But there's a lot of stop words in there. For all we know, Google may treat this no different than the keyword "round plastic widget". My guess is that they probably do treat them the same.

So basically, unique keywords probably never happen. But even if they did, the calculations are the same. Remember the question I asked, how is your CPC calculated for the last ad? If you were indeed the only advertiser, you are both the first and last ad.

So what numbers to use for the phantom last ad to satisfy the CPC calculation? The way I would do it is simple. The average QS is 5 so use five. Then, calculate the average bid for all advertisers of this keyword. This then becomes the phantom ad's adrank. If you truly are the only advertiser using this keyword, you are competing against yourself. By definition your QS should be five and hence you will be paying your bid. That's the theory anyway. Other considerations like having a minimum adrank may factor into this if your ad even shows.

Don't forget too that historical numbers are very likely used. You may say you don't see ads and think you're the first advertiser ever for a keyword but that is probably not true. All this to say, chances are you are not meeting one or more requirements for your ad to even show at one cent and there's more to the basic formulas, which are used to explain in simple terms, than meets the eye.