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CPC vs. CPM

Fahad Farid

Online ads are sold through different pricing models – Google Ads is one of the most common ad sellers. Two common types of bidding are Cost Per Click (CPC) and Cost Per Thousand Impressions (CPM).

1. Cost Per Click (CPC) bidding

In CPC, ads are more tailored to the user’s interests, and you only pay if someone clicks on one of your ads.

In most cases, people prefer CPC bidding because it’s designed for the Search Network, effectively drives traffic to your webpage, and you only have to pay as much as you are willing.

In Google Ads, within CPC bidding, there are two separate bidding options available:

a. Automatic bidding

In automatic bidding, a daily budget is set, and Google Ads will attempt to bring as many clicks as possible within the set budget. You can also set a limit to the maximum amount you want to spend.

b. Manual bidding

Manual bidding allows you to control your maximum bids by letting you set the maximum amount you are willing to pay per click. You can set bids at the Ad Group level, keyword-level, or placement level. This gives you more control over what you spend per click.

2. Cost Per Thousand Impressions (CPM) bidding

CPM bidding is the most common option, if you are targeting the Display Network, to increase or improve brand visibility.

In CPM you only pay according to the number of times your ad is shown. Since you pay for visibility and not per click, you may spend a large amount of money without receiving any traffic on your webpage.

However, a benefit is that the display network is solely judged on price. So, if your ad has the highest bid, it will be placed in a visible spot, which will increase brand visibility.

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Fahad Farid
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