Understanding Bidding Basics

AdWords gives you several ways to bid for your ads, depending on what matters most to you and your business. Having a perception of what you would like your ads to do will help you decide how to bid. Most advertisers focus on clicks, impressions, or conversions. 

Focus on Clicks 

If your main goal consists of having people visit your website, clicks are a great place to begin. By utilizing cost-per-click (CPC) bidding, you will only be required to pay when someone actually clicks on your ad and visits your site. CPC bidding is made up of two specific choices:

• Automatic bidding:
• This is known to be the easiest way to bid. By setting a daily budget, you will be allowing AdWords to adjust your CPC bids in order to bring you the most attainable bids within that specific budget. 

• Manual bidding:
•  With manual bidding, you will be in full control of you CPC bids. This type of bidding gives you the ability to set your bids at the ad group level. This confirms that you are bidding just what you want for the clicks that hold the most importance for you.

Focus on Impressions 
In opposition to the cost per click method, Impressions focus on paying by the number of times your ad is shown, if your campaign is targeting just the display network. This is refered to as cost-per-thousand impressions (CPM) bidding because you are paying for every 1,000 times your ad appears. It is important to remember that CMP bidding is only applicable for the following campaign types:

• "Display Network Only - All features"
• "Display Network Only - Remarketing"

Focus on Conversions
Conversions are the most advanced bidding method. With this method, you specify the amount you're willing to pay for a conversion, or cost-per-acquisition (CPA). A conversion (also refereed to as acquisition) is a particular action you want to see on your website. You will still be paying for each click but ad words will assist in setting your bids up for you to try and obtain as many conversions as possible regarding the cost-per-acquisition you previously specified. This type of bidding is primarily for more advanced AdWords users.