-Bid based Model- In the bid-based model, each advertiser makes a bid with a maximum amount of money they are willing to pay for an advertising spot. Then, a publisher undertakes an auction using automated tools. An auction is run whenever a visitor triggers the ad spot. Winner of the bid is determined in a ranking way. The rank is not only determined by amount but also the quality of content offered.
Cost-per-click (CPC) Cost-per-click (CPC) bidding means that you pay for each click on your ads. For CPC bidding campaigns, you set a maximum cost-per-click bid - or simply max CPC - that is the highest amount that you are willing to pay for a click on your ad . Your max CPC is the most you will typically be charged for a click, but you will often be charged less -- sometimes much less. That final amount you will charged for a click is called your actual CPC. If you enter a max. CPC bid and someone clicks your ad, that click won't cost you more than the maximum CPC bid amount that you set. You will choose between manual bidding (you choose your bid amounts) and automatic bidding (let Google set bids to try to get the most clicks within your budget).CPC pricing is sometimes known as pay-per-click (PPC). How CPC is measured:- CPC= Total amount spent / Total measured cost.