CPM & CPC: What’s the difference?

I know you’ve heard a lot about CPM and CPC and it sounds very technical but it’s very simple.

Do you want to know what’s the difference, when it’s best to use CPC / CPM and how to choose between them? You’ve come to the right place.

Today, I will briefly explain everything that you need to know about CPM and CPC. So what are they? Both CPM and CPC are types of bidding strategies used in Google Ads they define how much money you’re going to spend and what’s the return.

Let us first define what CPM and CPC stand for, CPM is the cost you pay per thousand impressions whereas CPC is the cost per click.

Cost Per Click Bidding (CPC)

CPC is when you pay every time someone clicks on your ad. If you know how much you’re willing to spend on ads and your goal is to drive traffic to your website, CPC is for you.  Within CPC there are two bidding options, and I will discuss them now.

Automated Bidding

Automatic Bidding is exactly what it sounds like… it’s automatic! All you have to do is set a daily budget and Google Ads will do the work for you. It will try to bring you as many clicks as possible for your budget. If you’re short on money and you want to make sure that Google doesn’t spend more than you would, you can set a maximum cost per click.  

Manual Bidding

Now for manual bidding, you’re the one in control of everything. In manual bidding, you only pay when someone clicks on your ad, but this will allow you to control your maximum bids.

This option allows you. To have more control over what you spend per click. You get to set bids either at the Ad group level, keyword level, or placement level.

Cost Per Thousand Impressions Bidding (CPM)

Unlike CPC, the CPM of impressions your ad receives rather than the number of clicks is calculated in thousands of impressions. If your goal is to increase or improve your brand’s visibility, CPM is the best option. But it can get a bit risky, you could end up paying for thousands of impressions except that you won’t be guaranteed visitors to your websites. This usually happens when ads are not creative nor engaging. CPM can also make you pay for bots, a % of your impressions could be from bot traffic, therefore you could end up being charged for an ad that no one even viewed. However, you can be sure to rank number 1 if you make the highest bit. Whereas if you’re going to use CPC the bids will depend on the click-through rate, the quality score and other factors.

To know which type of bidding strategy to choose, you should make sure that your campaign goals are set. If you want to increase visitors to your site, you should go for CPC. If you’re concerned about your brand image and want to increase awareness, CPM is the one!