What drives the cost of a click for a particular keyword? Why can the cost of a click for a keyword fluctuate over time? Is it due to bids from others who want to use the same keyword?

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There are several factors that affect a keywords CPC cost. The cost
per click will vary across industries, because some are more popular
than others for searchers and advertisers. Consumer electronics
shopping is very popular online so many people are searching for these
products and many sellers are advertising for them, resulting in high
CPCs. The CPC can also fluctuate at during different times of year
because of holidays etc. for example, keywords that relate to
chocolates or flowers become more competitive and more expensive
around Valentine's day. What also affects your minimum CPC is your
Quality Score. Link: How is my keyword's Quality Score used?
http://adwords.google.com/support/bin/answer.py?answer=49174&query=qu...