January 28, 2023


There is a significant difference between “billing technique” and “bidding strategy,” which refers to how the platform’s bidding mechanism operates (how the platform charges you).

The platform must be paid for using the billing mechanism. For instance, CPM charging refers to the cost per 1000 impressions they assist you in producing. The same is true for views and clicks for CPC. Adword management services and facebook ads management agency is there to help you with all these.

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The bidding strategy outlines the objectives that the platform’s AI will aim to achieve through optimization. For instance, CPM bidding entails aiming for the lowest cost per thousand impressions, as do CPC and CPV bidding for clicks and views, respectively.

Billing procedures have been discussed extensively, thus in this post I’d want to explain how “bidding” (or how the platform’s bidding model operates) functions:

How you want your campaign or ad set to behave determines the difference between CPM, CPC, and CPV bidding.

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Which type of bidding to choose will depend on the objectives of the campaign. What then is your purpose?

How the bid model operates: The “bidding model” of the platform is what most advertising platforms use to help users decide who to bid for and how much to bid (eg. Facebook, Google, etc). This model’s primary purpose is to determine whether or not I should put a bid whenever I observe a new user (incoming traffic), given my campaign’s budget and objective. What should my starting bid be?

Now, each of these “models” behaves slightly differently, which is why you can select CPM, CPC, and CPV bidding on Facebook and Google (meaning they will choose different users and bid differently).

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CPM bidding 

If you want users to view your advertisement and increase mindshare without taking an immediate action from the user, you should employ this type of bidding. Consider branding or movie commercials. In order to make an impression using CPM bidding, the model must decide how much it is ready to offer for this user.The difficulty for the model is to balance its budget with how much this impression will cost and decide how much it is willing to bid because this is the easiest bidding type among all bidding models because most of the time with a high enough price the bid will be won and ads will be broadcast.

CPC bidding 

If you want consumers to click your ad and go to a landing page or product page, you should use CPC bidding. This is appropriate for lead generation or EC marketers. With this bidding, the users who are most likely to click are selected by the bidding model.As you can expect, this is more difficult than CPM bidding because it must also take into account the likelihood that the user will click the advertisement. Based on the likelihood that the user would click the advertisement, this bidding model must determine the best price it is willing to pay.You only pay when someone clicks on one of your advertisements when you use CPC bidding. Every time a person views a video, you receive payment. These bidding strategies operate by calculating the cost per click everytime someone clicks on your advertisement.

Because CPC bidding is optimised for the Search Network, the majority of people use it. When you are aware of the price you are prepared to spend to increase website traffic, it is also the suggested bidding approach.

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CPV bidding 

If you want people to watch your video advertising, go with CPV bidding. This is appropriate if your advertising creative is in the form of a video and you want users to watch it entirely or to a certain extent.This type of bidding requires the bidding model to predict whether or not the user will watch the video ad. This type of bidding is more challenging than CPM bidding because it requires the model to predict the likelihood that the user will complete the view. Again, based on the likelihood that the user would finish the view, the model will choose the optimal price to offer for this user.

conclusion

Since the bidding technique you select will have a significant impact on how the AI of the advertising platform operates, be sensible and have a clear understanding of your objectives before you begin.Because it enables them to target ads to a relevant audience, online advertising is frequently chosen by both small businesses and large corporations. For instance, a loan company may decide to only display ads on personal finance blogs and websites. Determine your goals before launching an online advertising campaign. CPC marketing may be the best choice if you want website visitors to click on a link to acquire a brochure. CPV or CPM ads might be more effective if your marketing message is intended to increase customer knowledge of your brand or if it is a component of a consumer education programme.

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