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Lessons Catalog
Lesson 1c: Pricing and Ranking
Paying for AdWords
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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 you'll pay.
AdWords doesn't 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 pay only 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 you're willing to spend on a specific campaign each day. We'll show ads within a campaign as often as possible to meet your daily budget.
To help you set a daily budget that maximizes 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 show all the time. Should this happen, we'll display your ads intermittently throughout the day so they won't stop showing altogether (per standard delivery settings.)
Setting your daily budget to the amount we recommend is optional — you're 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, visit 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 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 you're willing to pay each 1000 times your ad appears on one of Google's partner sites. That means 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. Additionally, 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 amount you'll pay when someone clicks your
keyword-targeted ad. The higher your Quality Score, the less you pay for a given ad position, and vice versa. To improve your Quality Score and lower your cost-per-clicks (CPCs), try optimizing your account. Learn more at our Optimization lesson.
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