Google AdWords works on the bidding principle as a huge advertising auction. Every advertiser submits their bid for displaying their ad. An automatic system monitors, distributes and displays the ads of different advertisers through an operation based on many factors.
One of these factors is Cost. Based on it you can choose two types of bidding:
Cost Per Click (CPC) bidding
Within CPC bidding payment takes place only after a click on an ad unit has been realized. Many advertisers prefer this way of bidding because it gives control over the objectives, set by a certain advertising campaign. On the downside, many people fear ‘false’ clicks done by competitor or a software. But they shouldn’t. As a serious and distinguished company Google has been taking all measures to prevent false clicks with the assistance of special software and even by employing real people to monitor the process. There have been many occasions in which Google has refunded money for registered and charged clicks.
There are two modes for Cost Per Click bidding in a single AdWords advertising campaign:
- Automatic CPC mode - Automatic system that bids aiming a maximum number of clicks until the daily budget is realized. This mode provides a possibility for input of a price limit, which prevents exceeding of the set maximum Cost Per Clik.
- Manual CPC mode – the maximum cost is input manually for every key word and/or advertisement group. This mode is rather intensive and time-consuming; however it allows of AdWords advertising campaign fine tuning.
Cost Per 1000 Impressions (CPM)
Withing CPM your bid and payment is based on every 1000 impressions your ad. This type of bid is often used for advertising campaigns, targeted at branding and increasing the popularity of brands or companies and is possible when the Google AdWords advertising campaign is directed to the so called Google Display Network.
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