How does cpc bidding work

CPC is calculated using this formula:. The Ad Rank of the ad below is factored into the actual CPC that an advertiser will pay if someone clicks on their ad. The subsequent order in which eligible ads appear on the page. How much each advertiser will pay if their ad is clicked. What is Quality Score?

Google looks at three things when calculating Quality Score: Expected click-through rate CTR , which reflects the likelihood a user will click on an ad. Ad relevance to the query. You will have the option of selecting multiple audiences to make comparisons.

The tool will show you the percentage of overlapping Facebook users your audiences share. CPC rates change depending on the time of the year, because of increases and decreases in the number of people buying Facebook ads at any given time.

When the number of advertisers targeting a certain audience increases, CPC costs tend to follow suit. Advertisers flock to Facebook in droves during the holiday season , so be prepared to pay a premium per click at these times:. What about the day of the week? There were big fluctuations in which day of the lowest CPC throughout Do you want to discover all the findings shown by our analysis of million dollars of Facebook ad spend?

Download the full report in PDF. With more than 1 billion, highly engaged active users that attract over 2 million advertisers to its photo- and video-sharing social platform, Instagram has become a powerhouse of digital advertising. An indicator of its Facebook ownership, Instagram boasts a razor-sharp algorithm that instantaneously decides your cost per click.

All ads are set up and bid through Facebook Ads Manager. Your bid amount will determine not only if you get an ad spot, but it also determines your ad placement, which can mean the difference between success and failure.

Much like on Facebook, when your ad is more relevant to the audience, it enhances the user experience and Instagram has a vested interest in making sure that ads are as relevant as possible.

So, as a reward, they add your relevance score to your bid price to determine and also factor in the estimated action rate EAR to arrive at your top bid. Outside of the powers to be as Facebook and Instagram, little is known about precisely how they calculate your EAR.

What we do know is that if you under-perform their estimates, it lowers your relevance score. Meeting your ad objectives will increase your relevance and lower your Instagram ads CPC advertising cost. The more aligned your ad is with the audience viewing it, the better it will perform. That mean a better response rate and a lower cost per click.

Like its sister platform, Instagram lets you drill down deep into demographics of your audience by age, gender, relationship status, geographic location and more. That means you have the opportunity to target the most engagement-friendly, ready-to-act audience possible.

Although Instagram and Facebook share many of the same available options and tactics when it comes to CPC advertising, there are certain differences, X Factors if you will, that make Instagram a unique animal.

Something that few advertisers give thought to with CPC advertising is how targeting different age brackets on Instagram can have a significant impact on your overall ad costs. As an example, Instagram ad CPC costs for the teen-aged bracket 13 to 17 year olds are the lowest on the social platform, while the average CPC costs of targeting the sought-after to year-old range is the highest on Instagram.

On this platform, where people go to be inspired by what they see, that means being visually-oriented. Not surprisingly, lifestyle-focused ads perform well on Instagram. Rather than just using run-of-the-mill product imagery, show people what that can expect from your product or service with real-world-style photos and videos that speak to them and the experiences they crave. Instead of a simple picture of your grill, show a group of attractive, happy Millennials enjoying a barbecue party.

Rather than using a photo of a swimsuit laid out on poster board, try having a model wearing it on an enticing tropical beach scene, with sand and surf. That would the real money shot! Another often overlooked aspect or targeting and a surefire way to get more bang for your CPC advertising buck is retargeting, which focuses your ad spend on the audience that is already familiar with your brand and has shown an interest in your offerings.

This special target audience is ripe for remarketing your product and services to and are much more likely to click and convert than cold prospects. Retargeting is one of the most powerful ways to target Instagram users while increasing conversations rate and maximizing your CPC ad spend. Just as ad placement plays a big role on Facebook , using the right Instagram Ads format for your brand or business can optimize your CPC.

The CPC advertising model is the perfect option using a small budget to test your Instagram ad campaigns. As an advertiser, your cost per click will always be less than or equal to your maximum bid, as it is an average of bids against a series of competitors over a period of time. Because of how Google's ad auction works, your actual cost per click is heavily influenced by both you and your closest competitor's ad rank, maximum bid , and Quality Score.

Below you can find average CPC benchmarks for 20 common industries in both search and display on AdWords:. If your average cost per click is higher than these benchmarks, you're probably paying too much. Enter your CPC into the tool below to quickly see where you stand compared to other advertisers in your industry:. Could you be saving costs in Google Ads? Cost-per click is important because it is the number that is going to determine the financial success of your paid search campaigns, and how much Google Ads will cost for you.

Manual CPC bidding is when advertisers set the maximum CPC for each ad by hand in contrast to automated bidding strategies. Enhanced CPC is used if your goal is to maximize ad conversions. Send us an email.