Welcome to another Adwords PPC Basics blog. In this blog I will be discussing the benefits and drawbacks of the two main bidding options in Google Adwords.
The two main types are Cost per Click (CPC), which is where you pay only if someone clicks on your advert and, Cost per Thousand Impressions (CPM) where you focus your bidding on impressions your advert gets on the display network and pay every thousand impressions your ad receives (similar to display advertising).
Cost per Click (CPC) Bidding
In most cases people will generally use CPC bidding, because it is designed for the search network and you only pay for the advert if someone clicks on it. It is recommended when trying to drive traffic to your website. You have two options for CPC bidding:
• Automatic bidding, which is where you set a daily budget and Google Adwords will attempt to bring you as many clicks as they can for your set budget. You can also set a maximum cost per click to make sure Google doesn’t spend more than you would. If you use automatic bidding I would highly recommend doing this!
• Manual bidding, again you only pay when someone clicks on your advert but this option allows you to control your maximum bids. You can set bids at Ad Group level, individual keywords or placements. I personally like this option as I feel it gives you more control.
Cost per Thousand Impressions (CPM)
The second option is CPM (cost per thousand impressions) bidding, you can choose this option if you are targeting the display network. This type of bidding is designed to target impressions instead of bidding and paying for clicks, you can now choose to bid for impressions on your ad and only pay for every thousand times your ad appears. This type of bidding is best if you’re trying to improve brand visibility. The downside to this type of bidding is that you could potentially pay for a thousand impressions but receive no traffic to your website. However if you have a particularly good advert that has a high CTR it might be worth trying CPM bidding as you could receive more traffic for less! Obviously this only applies in the display network. Another benefit of CPM ads are that whereas a CPC bid is judged on CTR, quality score ( insert link and title for eg read more about quality score here) and other relevance factors a CPM bid in the display network is solely judged on price so if it has the highest bid it will rank number 1.
My personal opinion is that I prefer to use CPC bidding throughout the search network and the display network. I appreciate that in some cases CPM bidding can be useful but I prefer not to gamble my client’s money on whether they are going to drive as much traffic from a thousand impressions as they would have done from paying for each click individually. Another benefit is that if you pay for a thousand impressions and after a few clicks you realise that a specific advert is not converting well and you want to turn it off then you have wasted money, whereas if you use CPC bidding then you could just turn the advert off and not waste any money. I just feel that I have more accountability and control over the account with CPC bidding and therefore for me it is the obvious choice.