Cost per Click (CPC) plays a crucial role in every PPC Campaign.
In a PPC campaign we choose a set of targetted keywords for our PPC campaign and assign a bid rate (CPC in other words) to each keyword depending upon the competition associated with that keyword in the advertising market.

In simple words if we have assign a Cost per Click (CPC) of $2 to a keyword in our campaign “ppc services india”, then for every click on an ad triggered through this keyword we have to pay $2 to Google as part of our PPC program. Higher the CPC associated with a keyword, more are the chances of PPC ad appearing high in the sponsored ads (ad position). But yes, as far as Google is concerned the ad position depends on several other factors as well besides just CPC. Google ranks an ad as per a formula which is:

Ad Rank = Keyword CPC X Keyword Quality Score

Now the question that comes to one’s mind is what is this Quality Score?
The different factors which determine the quality score for a keyword are:

a) Keyword’s Click Through Rate
b) Ad text relevance
c) Past performance of the keyword
d) Quality of the Landing Page

Here Click Through Rate (CTR) refers to the ratio of clicks to impressions expressed as a percentage.

CTR = Clicks/Impressions X 100

So if we are able to get a good CTR for a keyword we can easily reduce the bid rate for that keyword without compromising on the ad rank for an ad triggered through that keyword.