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Objective: Learn how much AdWords costs. Understand how your daily budget, CPC or CPM bid and Quality Score influence the amount that you will pay.
AdWords does not have a minimum spending requirement — just a nominal, one-time activation fee. You set your spending limits, depending on your advertising goals. In addition, you only pay for clicks or impressions that your ad receives. You control your costs through:
- Your daily budget
- Your CPC and CPM bids
- Your Quality Score
Your daily budget is the amount that you are willing to spend on a specific campaign each day. We will show ads within a campaign as often as possible to meet your daily budget.
To help you set a daily budget that maximises your ad's visibility, AdWords provides daily budget recommendations within your account. These recommendations are based on historical click data for the same or similar keywords that you choose for your ads, among other factors.
If your daily budget is lower than the AdWords recommended amount, your ads may not appear all the time. Should this happen, we will display your ads intermittently throughout the day so that they will not stop showing altogether (per standard delivery settings.)
Setting your daily budget to the amount that we recommend is optional — you are always in full control of your AdWords account and you can edit your campaign's daily budget as often as you like.
To learn more about setting your daily budget, see the Cost Control lesson.
In campaigns targeted to the search network, you set a cost-per-click (CPC) bid for each ad group or keyword in your campaign. Your CPC bid refers to the amount that you're willing to pay for a click on your ad when the ad appears on Google or one of our partner sites.
In campaigns targeted to the content network, you choose to make either a CPC bid or a cost-per-thousand impressions (CPM) bid for each ad group, keyword or placement in your campaign. A CPM bid refers to the amount that you're willing to pay each 1000 times your ad appears on one of Google's partner sites. That means that you pay when your ad shows, whether or not a user clicks the ad.
Placement targeting is covered in more detail in the Placement Targeting lesson. CPM bidding is not available for campaigns that target the search network. CPM bidding is available for campaigns that target only the content network.
With both CPC and CPM pricing, you're in control of your bids. In addition, AdWords helps keep your costs to a bare minimum with the AdWords Discounter and smart pricing. To learn more about these methods, visit the Cost Control lesson.
Quality is the most important factor in determining the cost that you will pay when someone clicks on your keyword-targeted ad. Your Quality Score (which is determined by your keyword's CTR, relevance of ad text, historical keyword performance and other relevancy factors) sets the minimum bid that you will need to pay in order for your keyword to trigger ads. If your CPC bid is less than the minimum bid assigned to your keyword, you will need to either raise the CPC to the minimum bid listed or optimise your campaign for quality. For more information on optimisation, please visit our Keyword Optimisation lesson.
It is important to remember that the higher the Quality Score, the lower the minimum bid and cost that you will pay when someone clicks on your ad. Therefore, the best way to drive your advertising costs down for keyword-targeted ads is to maintain high-quality keywords, ads and campaigns.
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Objective: Ad rank is your ad's position on a page. Learn how we rank your ads and help keep your costs down.
Shortform:
Ads are positioned on search and content pages based on their Ad Rank. The ad with the highest Ad Rank appears in the first position, and so on down the page.
The criteria that determine·Ad Rank differ for ads on search results pages (which are always targeted by keywords only) and ads targeted by keywords on content sites. There's also a third set of criteria that determines·if an ad targeted only by a placement will appear on that placement.
A keyword-targeted ad is ranked on a search result page based on the matched keyword's cost-per-click (CPC) bid and Quality Score, which is calculated from its click-through rate (CTR) on Google, the relevance of your ad and keyword to the search query and other relevance factors.
A keyword-targeted ad is ranked on a content page based on its content bid and Quality Score, which is calculated by the ad's past performance on that and similar sites, your landing page quality and other relevance factors. This is true even if you have also targeted placements in the ad group, and even if you have chosen 'Relevant pages only on the placements I target' as your content network setting. If a keyword helps target your ad on the content network, then the keyword-targeted Quality Score formula is used.
If an ad is targeted by placement only, without keywords, it will appear if its Ad Rank is higher than that of all the competing ads. It will appear as the only ad on that page. For an ad targeted by placement only with cost-per-thousand impressions(CPM) bidding, the Ad Rank is determined by its CPM bid and its Quality Score, which is derived from your landing page quality. For an ad targeted by placement only with CPC bidding, the click-through rate is also considered when creating the Quality Score.
Learn more about placement targeting.
Having high CPC and CPM bids, relevant ad text, a strong CTR and a quality landing page will result in a higher position for all your ads. Since this ranking system uses relevance to help determine your ad's position, your ad cannot be locked out of the top position based solely on price.
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