How do cost-per-click (cpc) ads compete with cost-per-thousand-impressions (cpm) ads on the google display network?

To compete, cost-per-thousand-impressions ads are converted with the click-through-rate into a cost-per-click number. These cost-per-click equivalents are submitted to the Google Display Network auction and bid on automatically by client's budgets and algorithms to be displayed on the ad network.

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