CPA, CPC, and CPM: Which is the best AdWords bidding solution?

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CPA, CPC, and CPM: Which is the best AdWords bidding solution?

Google AdWords offers multiple bidding solutions for businesses depending on the network they advertise on, the marketing objectives, and the overall strategy that each business has in place. Before choosing an AdWords bidding solution, marketers should keep in mind the type of campaign, the cost of their keywords, and the success of their keywords. As they choose the best way to share their ads, marketers think of clicks, conversions, views, or impressions.

These factors are crucial for each marketer; depending on the way they select to manage their ads, they will have to use a particular bidding strategy. The main AdWords bidding strategies can be summarized in three main groups: CPC, CPM, and CPA bidding.

 

CPC (Cost-Per-Click)

CPC (cost-per-click) bidding is a great way to focus on traffic volume or campaigns with little conversions. CPC bidding also gives you the most control over bids. This means that you will be able to increase and decrease bids based on the success of your keywords.

As you bid for your specific keywords, you have the option of determining how much you would like to bid. For example, when someone clicks your ad, the cost of your bid will be determined by the amount you set it to be. CPC bidding is also a recommended long-term strategy if you prefer control to automation.

If you want to manage your bids day by day, CPC is recommended as you have the option of manual bidding. At the same time, if you already have a set amount of money you would like to pay for each ad, you can choose to have automated control. With this option, Google makes sure to not surpass the dollar amount you have already established.

 

CPA (Cost-Per-Acquisition)

If you prefer automation, CPA (cost-per-acquisition) bidding is the way to go–as soon as you have enough conversion data to determine what a good cost per acquisition could be. CPA bidding takes advantage of historical conversion data to determine when to show the ads, which ad to show, and which bid to use to maximize the overall conversions.

This benefits marketers because the CPA bidding solution has already analyzed the data and will show the ads that create more conversions while saving time in choosing which ad to bid. In comparison with CPC, CPA uses an automated metric where marketers only pay for each conversion, not for every click on the ad.

When using CPA, remember that while you can’t make your bids according to cost per acquisition, you can track the cost of your conversions.

 

CPM (Cost-Per-Thousand Viewable Impressions)

CPM (cost-per-thousand viewable impressions) bidding is the only bid type that doesn’t run on the search network, and it is best choice if you focus on impressions rather than clicks. The main metrics to focus on while pursuing a CPM strategy are reach and frequency because the advertiser is more interested in awareness than just generating traffic to the site.

It’s crucial to always remember the difference between looking at impressions and views. Impressions refer to those ads that may be at the bottom of a page but don’t have to be viewed to be counted. When counting by views, the number of people who see the ad does matter. This bidding option is also beneficial for those advertiser whose main goal is to get the company’s name and logo out there to create a larger brand and create more awareness.

Most direct response campaigns start with CPC bidding and then switch to CPA bidding as soon as they have enough conversions. This applies both to search and display network campaigns. There are very few advertisers using CPM bidding because you can generate reach and frequency while generating a good amount of clicks using CPC or CPA bidding.

Ultimately, choose your Google AdWords bidding strategy according to what you want to get out of each of your campaigns and how you would like to manage it.  Yael Consulting can help you make the right decisions for your campaign. Partner with an AdWords expert who can get the job done.

 

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