How Do Cost-Per-Click (CPC) Ads Compete With Cost-Per-Thousand Impressions (CPM) Ads On The Display Network?

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How Do Cost-Per-Click (CPC) Ads Compete With Cost-Per-Thousand Impressions (CPM) Ads On The Display Network?

  • Ads using CPC bids are not allowed to compete on the Display Network
  • CPM bids are effectively converted to CPC bids
  • CPC and CPM bids only compete against bids of the same type
  • CPC bids are effectively converted to CPM bids

Correct Answer: CPC bids are effectively converted to CPM bids

How Do Cost-Per-Click (CPC) Ads Compete With Cost-Per-Thousand Impressions (CPM) Ads On The Display Network?

Answer Explained in Details about CPC bids are effectively converted to CPM bids: When CPC and CPM ads compete for the same Display Network placement, adwords uses eCPM to compare ad rank. AdWords converts CPC to ECPM ( CPC equivalent bid) Google estimates how many clicks the ad might receive in 1000 impressions to get the comparison, the resulting figure is the ad’s eCPM, or effective cost per impressions.

To keep things fair, when CPC and vCPM ads compete for the same Display Network placement, the two types of ads are compared apples-to-apples on how much they’re effectively willing to pay for the impression. With a vCPM ad, the max viewable CPM bid represents how much the advertiser is willing to pay for each 1,000 viewable impressions; with a CPC ad, Google estimates how many clicks the ad might receive in 1,000 impressions to get the comparison.

if you have more query regarding this question, then please do visit the link for more details: https://support.google.com/adwords/answer/2630842?hl=en

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