Promoted Videos allow you to choose the maximum amount you're willing to pay each time a user clicks on your promotion. This is called your maximum cost-per-click (or max CPC) bid.
We won't necessarily charge you the full maximum you set for a given click. The AdWords system is built around an auction where others like yourself set their pricing and bid on keywords so that their promotions will appear on a given page for those keywords. Prices are defined by how much someone is willing to pay for their promotions. To ensure you pay the least amount possible for a click in the auction, Promoted Videos uses the AdWords Discounter to automatically reduce your costs. This discounter will charge you only 1 cent more than the next advertiser on the page competing for the same or similar keywords.
By setting a higher CPC bid, you can help keep your promotion above competing promotions on the page.
For example, if your maximum CPC is $0.20 but to be first above other similar promotions you only need to pay $0.15 above a competing promotion with a $0.14 maximum CPC, we'll place your promotion at the top on the page. We'll charge you $0.15 per click to place you there. By setting a higher CPC bid, you can help your promotion show in a higher position on the page.