# How does Google's Traffic Estimator calculate the “Estimated Avg. CPC”?

I use Google's Traffic Estimator to calculate the Estimated Average Cost Per Click.

I use the following filters:

``````Locations: Australia
Languages: English
``````

and the following phrase `air conditioner melbourne`.

When I use `Max CPC = \$100`, the result is: `AU\$6.08`.

But, when I use `Max CPC = \$10`, the result is: `AU\$3.87`.

Why is this difference?

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The "Max CPC" field is the maximum you wish to pay per click. If you enter a Max CPC of \$100 then you will never pay more than \$100 per click, so the average will always be less than \$100 - in this case \$6.08.

However, restricting it to \$10 Max CPC means you're cutting out all the clicks from \$10 to \$100, therefore the average CPC will be less.

Quick example: two companies by ads at \$20 per click and \$2 per click respectively. The Average CPC here is \$11. Now, if your Max CPC was \$10 then the \$20 ad is ignored, meaning the new average is just \$2.

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Is there any way to know the number of ads that participate in the average calculation (e.g. 2 ads in your example)? – Misha Moroshko Nov 21 '11 at 21:28
Not that I know of, sorry. – DisgruntledGoat Nov 22 '11 at 0:24
Regarding your example: If put `Max CPC = \$10`, and I get `Estimated Avg. CPC = \$2`, should I assume that if I pay \$2 per click Google will place my ad in the first position? I thought that if someone pays more than me (like \$20 in the example), its ad will be above mine. What am I missing? – Misha Moroshko Nov 22 '11 at 10:35
Maybe you could also help me with this related question: webmasters.stackexchange.com/questions/22378 – Misha Moroshko Nov 22 '11 at 11:27

Basically you can use the formula for calculating the average cpc average cpc= (ad rank/quality score)+ estimated first page bid max cpc=\$100 you find the quality score of that keyword estimated first page bid =\$.01 then you can calculate average cpc of that keyword

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