We’ll try to keep this as simple as possible. When a consumer enters a search, the search engines pull all the ads whose keywords match that particular search. Based on a complex algorithm, these search engines prioritize ads based on quality score, bid settings, campaign settings, searcher intent, and many other factors. The cost for these ads is based largely on these factors and the actual ad position. The higher the ad is on the page (position 1 vs. 3), the more expensive the cost per click. This is where the bid settings come into play. Business 1 may set their program with a maximum bid per keyword at $1, where business 2 might set theirs at $2 because they need more business or want to be more competitive. The most a business will end up paying is the minimum amount required to hold their ad position. So business 2 may end up paying a $1.10 for the 1st position and business 1 may spend $1 for position 2. Again, this is a very crude example. For more information, give us a call at (623) 226-7950.