In this video, you will learn on how to work out the cost per click (CPC) bidding, how to interpret those values and how to use the data to maximize the profit from your marketing investment.

As per Google Official Blog:

Last month we launched a new feature of AdWords called Bid Simulator. Bid Simulator takes some of the guess work out of cost per click (CPC) bidding by estimating the number of clicks or impressions you could have received if you had used a different maximum CPC bid.

Today, I thought I would take the opportunity to help you make the most of this new feature by explaining how to use the data from Bid Simulator to maximize the profit from your marketing investment.
In general, when you increase your maximum CPC bid for keywords on search you are able to generate more clicks to your site. This may be because your new bid qualifies you to appear higher up in the Sponsored Links on the search results page, or because your higher bid qualifies your ad to appear in new, more expensive auctions. The goal for you as an advertiser is to decide whether or not these additional clicks come at a cost that is still profitable for you.

You can watch this video on YouTube: http://www.youtube.com/watch?v=jRx7AMb6rZ0