Tuesday, June 17, 2014

What are CPC, CPM, CPA and CPV in Adwords?

If you are using Adwords then you need to use any one of the models given below in order to run your ads on Google search network or the Google display network:

CPC (Cost Per Click)- The commonest of all bidding options available in Adwords. Cost Per Click means the amount you pay for each click on your ad. Suppose, you wish to pay to Google every time someone clicks om your ad then that value is defined by the name cost per click. 

There is a difference between actual CPC and Max. CPC. You can define maximum cost per click but you cannot define the actual cost per click because the actual CPC is decided by Google automatically based on your closest competitor bid.

Suppose I set my maximum CPC to $2 per day then my CPC for a specific campaign can be $1.5, $1.9, $1.82 etc. It can vary depending on the search queries and other bids but in no case it will exceed $2. 

CPC is the preferred mode of advertisement if your aim is to generate traffic or clicks.




CPM (Cost Per Impressions)- This is the amount you pay each time your ad is displayed on Google Search network or Display network. You pay for impressions for your ad as opposed to clicks as in CPC.  

Suppose I wish to inform my customers about a recent event I am planning to launch in my city then I will choose the CPM model that will help my ad to reach a wide variety of audience without paying for every clicks.

CPM is useful if you want to promote your brand and display it to as many people as you can without necessarily getting traffic to your main site.



CPA (Cost Per Acquisition) - This is the amount you pay after a successful conversion. This form of model is great is your main business objective is to get conversions. 



CPV (Cost Per View) - This is the amount you are willing to pay after someone watches your video ad. This form of bidding option is helpful for video ads when you only agree to pay after every video view.



Also See:

101 Free Resources for Learning Adwords
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