CPA vs CPC vs CPM Adwords Bidding

Posted on by in Adwords

AdWords offer you some different tools and techniques to assist you in defining the bid amount and presenting the ads prior to others in search results. To be informed about the tools, you must know the bidding options available in your hand.

 

There are different bidding methods, namely cost-per-click (CPC) bidding, cost-per-acquisition (CPA) bidding, cost-per-impression (CPM) bidding etc. While choosing among the bidding techniques, carefully consider the cost-benefit relationship for each of the options available. This will ensure a positive return on investment for the campaigns.

 

AdWords has designed some tools that you can use to bring out the most from your bids regarding your goals. The goals will be discussed shortly. For now, let’s have a look at the goal attaining tools -

 

  • Calculate the marginal benefit of raising your bid. That is, find out the number of impressions, clicks, or acquisition may increase for increase one unit of cost (bidding expenditure). AdWords provides you with the Bid Simulator to resolve this dilemma. When you have the answer, increase your bid according to your desired level of benefit.
  • First-page bid estimates is another tool available for the AdWords users. This will let you know the figure that can take your ad to the first page of the search result.
  • Use conversion tracking, a tool that tracks and informs you about the number of clicks that has been converted to performing one.
  • Traffic estimator will let you know how much traffic you are getting as well as how much traffic you can get for a different keyword. It’s able to create a list of keywords with the quantity of how often they are searched by a customer.
  • You can get overall idea of bidding and maintaining goals through the CPC bid ideas.

 

Goals of bidding

 

Not all the advertisers have same goals or objectives in their mind. For different objectives, the system suggests different bidding methods. An advertiser may have these goals individually or collectively -

 

Advertising Goal

Bidding Method

Impressions CPM
Clicks CPC
Clicks on Adwords video ads CPV
Conversion or acquisition CPA

 

Consider while determining the bid

 

As said earlier, don’t forget the cost-benefit relation. Calculate the return from each of the clicks keeping in mind the cost of each of the clicks. Try to make a list of cost and return for all the keywords. This will demonstrate a complete picture of the ad campaigns. Now, analyze the keywords considering their performance. Increase bids for the performing keywords by decreasing the same for the non-performing keywords to maximize the return on investment. You can also set automatic bidding and let the system manage where to increase and where to decrease.

 

Be careful with the first time biddings for the Display Network campaigns. Lower the bid and wait to see the result. Change the bids to see the change in outcome. Hit the optimal combination after finding the right Display Network bid.

 

Now think in a different manner. Suppose you have used multiple targeting methods for any single ad group. Question might arise in your mind about how AdWords charges you and if it is charging you for all the targets. AdWords don’t charge you multiple times for a single ad. It follows single charging method for ads shown in the search as a result of multiple targets.

 

There are diverse targeting manners, for example – placement targeting, keyword targeting, topic targeting etc. Suppose your ad, having a placement and topic targeting, was shown in a search result. The system will mark the exact targeting for what the ad was shown and will charge as per that targeting bid.

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