A common question that Onimod Global experts are asked frequently, “How should I bid? CPM or CPC?”
Google Ads are definitely the backbone of PPC. Within Google Ads and social media advertising, there are two main types of bidding – Cost Per Click (CPC) and Cost Per Thousand Impressions (CPM). Cost Per Thousand Impressions (CPM) differs from CPC as your bidding is focused and paid for on the number of impressions of your advert receives instead of the number of clicks.
So which is the right type of bidding style for you and your campaign? Read more from Onimod Global experts below.
Cost Per Click (CPC) Bidding
CPC bidding is where you only pay if someone clicks on one of your ads.
Most cases, people will use CPC bidding as it is designed for the Search Network. It’s also the recommended bidding strategy when trying to drive traffic to your website and you know how much you are willing to pay on your campaign.
Cost Per Thousand Impressions (CPM) Bidding
CPM bidding is the most common option for advertisers that are looking for the best option to try to increase or improve your brand visibility. There is one downside that this bidding strategy brings which is the fact that you could pay for a thousand impressions but potentially receive no clicks to your website.
However, a benefit of CPM ads are that the display network is solely judged on price so if it has the highest bid it will rank at number 1, whereas CPC bids are judged on CTR, Quality Score and other relevance factors.
Where you are going wrong
Often times you may read that if your goal is brand awareness, bid for impressions (CPM). If your goal is direct response, bid for clicks (CPC).
It doesn’t matter what your goals are; your job is to generate traffic/impression/leads/sales at lower costs and higher volumes.
Even if you’re only concerned with exposing your brand to a large audience, wouldn’t you want to get that exposure for the lowest cost possible? Along that same thought, if you’re concerned with traffic, obviously you want to secure that traffic for the lowest cost possible. You have use your bid type as a lever to effect that efficiency.
There will be times when CPM bidding is the most cost-efficient bid type to drive impressions. There will also be times that CPC bidding is the most cost-efficient bid type to drive impressions, too (although this is traditionally a bad sign about the engagement rates of your ads. Check out our blog post on improving your relevance score here).
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