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exact formula or method of CPC and CPM ads compete in ad auction ?

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

Hello,  may i know how exactly ad auction takes place and ad rank is decided for GDN when two ads participate in the auction - one is having CPC and another one is having CPM bid. 

Marked as Best Answer.
Solution
Accepted by topic author Ghori Ameer H
September 2015

Re: exact formula or method of CPC and CPM ads compete in ad auction ?

Explorer ✭ ☆ ☆
# 2
Explorer ✭ ☆ ☆
Hi Ghori,

When a CPC ad and a CPM ad are competing against each other, Google comes up with an estimated CPM bid for the CPC ad, so that the two ads are bidding in the same way. For example, say Google expects a CPC ad to get 10 clicks per 1000 impressions: the ad's max CPC bid would then be multiplied by 10 to approximate what the CPM would be.

Here's where this is discussed in the AdWords support documentation: https://support.google.com/adwords/answer/2630842?hl=en (under the heading How CPC and CPM Bids Compete).

Re: exact formula or method of CPC and CPM ads compete in ad auction ?

Visitor ✭ ✭ ✭
# 3
Visitor ✭ ✭ ✭

Hi Meg ,

 

I beleive your answer is correct, However on similar question I got different Answer by Hannaha that CPM bids are converted inequevelent CPC bid based on historical data. This solution was accepted by Expert CassieH and also marked as Best Answer.

 

In AdWords exam I marked based on answer given by Hannaha and I got that question as WRONG (May be my  understaning to her answer is wrong)