The CPC depends on keyword competition with other advertisers. It is important to understand that there is a «position price» (the price of entering your ad at a certain place to get an impression) and a «cost per click» (the cost of the actual click / click on the ad).

If your ad is selected for display in one of the positions, then in most cases you will pay the deductible price specified for the position per click on the ad. The debited price changes dynamically: the cost per click on an ad may differ from the specified price, but it will never exceed the maximum CPC you set.

The price of the impression position is affected by:

  • CTR;
  • quality factor;
  • indicators of all competing ads (including Yandex.Market product offers) for the same keyword: CTR, quality factor, and bids.

Since your competitors ad metrics are an «environment» that you can’t directly influence, we exclude them from the equation. As a result, the ad rating calculation form for determining its position in search results will look like this:

bid × CTR × quality factor = rating

But we are interested in the bid, which means we need to expand the formula:

bid = rating/(CTR × quality factor)

Some simple math

Let’s say we want to keep the ad position unchanged (rating). For example, assign abstract values to parameters:

  • rating = 100
  • CTR × quality factor = 50
  • bid = 2

Visualizing it:

2 = 100/50

What if you had a small product CTR x quality factor? You would have had to pay a lot more to keep your ad position:

  • rating = 100
  • CTR × Quality factor = 2
  • bid = 50

Visualizing it:

50 = 100/2

The conclusion is also obvious — to reduce the CPC, you need to increase the CTR and quality factor.

Other forums and the weight of the impact of calculating the quality factor Yandex help.Yandex.Direct doesn’t provide it yet. You can see Yandex’s general recommendations for increasing efficiency on this page —