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CPC Vs CPM

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# 1
Visitor ✭ ✭ ✭

What is CPM..?

 

3 Expert replyverified_user

Re: CPC Vs CPM

Top Contributor
# 2
Top Contributor

Hello Abdul,

 

CPM is a bidding method which involves Cost per Thousand impression concept. It can only be used for Google Display Network.

 

Generally advertisers uses this bidding method for their Branding campaigns, where they are not much concerned about ROI but about how their brand can be popularized. Find more details here:

 

https://support.google.com/adwords/answer/6310?hl=en

 

Pankaj

Re: CPC Vs CPM

Top Contributor
# 3
Top Contributor
Just a further piece of random info for you... I've always known what it meant in a marketing sense, but I originally thought CPM was an abbreviation of Cost Per Mille, with 'Mille' being french for 'thousand'.

But on further research I found out that the M part of CPM is actually the Roman Numeral for one thousand. So the term literally means Cost Per One Thousand, and then this is taken in the context of AdWords as Pankaj has already stated.

You learn something new every day!
Jack Porter-Smith
Jack's G+

Re: CPC Vs CPM

[ Edited ]
Collaborator ✭ ✭ ✭
# 4
Collaborator ✭ ✭ ✭

The formula that links them is CPM = CTR x CPC x 1000 , meaning that only when you have a CTR lower than 0.1% (or 1 click for more than 1000 impressions) the ratio CPM / CPC is lower than 1 , and CPM becomes cheaper than CPC. This rarely happens in the Display campaign, so chose CPC .

 

Re: CPC Vs CPM

Visitor ✭ ✭ ✭
# 5
Visitor ✭ ✭ ✭
Thanks Jack Smiley Happy

Re: CPC Vs CPM

Top Contributor
# 6
Top Contributor
Actually, this all depends on how many clicks you get... I know that sounds obvious, but let me explain....

When you run a campaign on the CPC model you pay each time there is a click - that's simple, right?

OK - with CPM you pay every time your ad is served 1,000 times. And it doesn't matter how many clicks are triggered by those 1,000 impressions.

So it a case of testing to see if Adrian B's formula makes it cheaper to run your ads on CPC or CPM.

But here's the thing - you have to consider both clicks and impressions. Because, as mentioned above, there is a branding value to ad impressions.

I run campaigns for a car dealership, for example. I have display ads that announce the new models. The dealership is pretty well know and the ads feature a photo of the new model and a caption to let people know that they have been launched. This is like seeing an ad in a magazine. Actually, what I wanted people to know is in the ad. They actually don't need to visit the website to know what I am telling them. If they do visit the site this is a bonus, and shows a deeper level of interest, but the main message - that the new models are out - is conveyed through the ad.

In this particular case I have tested and find that it is cheaper to run my ads on CPC - but NOT because the clicks work out cheaper - but because the effective CPM is lower than I would have to pay if I were on a CPM - for the same number of impressions. Since in this case it is the impressions I am most interested in there would be a natural tendency to pick CPM bidding, but in reality this is a mistake.

Test and check for yourself before electing one or the other.