Ad Rank and Quality Score
Bid $3 with quality 9 (27) and you beat a $6 bid with quality 2 (12).
You pay per click, but money alone does not win the auction. Expected CTR is Google's prediction from your copy and the industry; relevance asks whether the ad matches the search (a hospital bidding "top neurosurgeon in Bangalore" with "best hospital" copy fails); landing page experience asks whether the page delivers the exact thing promised (not a whole catalogue). Each shows as good / average / below average; below 8 overall, "expect that your CPCs will be shooting up." Optimisation score is a different number.
The cheapest way to lower CPC is to raise quality.
