It refers to the minimum amount one has to pay to make an ad appear for a particular account.

Minimum bids are also referred to as minimum CPC by some section of online users. It represents the minimum amount of money that has to be paid for an ad to appear for a given keyword and for a given account. The minimum bid amount however is not related to the number of advertisers using the given keyword. It is interesting to note that post August, 2005 the minimum bid has been oriented more towards quality rather than quantity. By creating relevant keywords and ad texts that enable quality scores, mower minimum bids can easily be earned. Only the best combinations of texts and relevant keywords fetches minimum bid amount of $0.01.